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Long-grain rice prices expected to fall

News Release Distributed 07/22/14

BATON ROUGE, La. – Prices for long-grain rice, which makes up 85 percent of Louisiana's rice crop, are projected to drop this year, said LSU AgCenter economist Mike Salassi.

The price of long-grain rice was $15.40 per hundredweight in 2013, but that could decrease to $13.30 per hundredweight this year.

A 46 percent increase in rice acreage in Arkansas, the No. 1 rice-producing state, is likely to blame. The price of corn is down, so some Arkansas farmers switched to rice this year, Salassi said.

"Because that's such a large increase in long-grain acres, we're going to have more production, and that will push prices down," Salassi said.

Last year, nearly 2.5 million acres of rice were harvested in the United States. That is the lowest since 1987, and down significantly from 2010, when 3.61 million acres were harvested.

Although nationwide rice acreage has dropped, that is not the case in Southern states like Arkansas, Mississippi and Louisiana. There are about 455,000 acres of rice planted in Louisiana right now — a 9 percent increase from last year's 418,000 acres.

While long-grain rice prices are expected to decline, the market price of medium-grain is expected to increase. Rice acreage in California, which is the No. 2 producer of rice in the United States, has decreased significantly because of extreme drought conditions. Most of the rice grown in California is short- and medium-grain, which are used in products such as cereals.

"What California does affects the medium-grain price," Salassi said. "Their acreage is down about 12 percent from last year because they're having one of their worst droughts in history, and rice is an irrigated crop. The limited availability of water is going to decrease the amount of rice they can produce and increase prices."

If medium-grain prices stay up and drought in the West continues, "we may see a little more medium-grain rice grown in Louisiana, but traditionally we're a long-grain state," Salassi said.

Olivia McClure

Last Updated: 7/22/2014 12:34:17 PM

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