Rice Farmers Struggling With Market Conditions
US RICE PRODUCERS
KATY, TEXAS
The government is back to work, but we are still awaiting updated export data. Shipments appear steady for both paddy and milled rice, though it will be helpful to quantify actual numbers to see how this year truly compares to last. The situation unfortunately appears to be, however, that despite declining prices, we are still losing export demand year over year. We are well behind USDA’s forecast, and we should be able to provide exactly how much (several million cwt at least) once official numbers are updated. Price remains a major pain point, and without clear guidance on actual disappearance, forecasting any kind of relief remains difficult.
Unfortunately, the relief so desperately needed appears more likely to come from government intervention in the near term rather than from the market itself. USRPA Senior Advisors Dennis DeLaughter and Dwight Roberts recently quantified the subsidy rates the U.S. is competing against – particularly with India – and the results are troubling. While the new Farm Bill represents a significant victory for rice producers and the agricultural industry at large, it alone is not enough to keep farms solvent in the short term.
According to DeLaughter and Roberts, with the government price guarantee at $14/cwt, a U.S. long grain farmer is still projected to lose $6.50/cwt. Current production costs are estimated at $16.55/cwt, with a support price of $14.00/cwt and a market price of $10.05/cwt. This equates to losses of roughly $143 per metric ton or $494 per acre – levels that are simply unsustainable.
By contrast, India’s support price of $12.50/cwt, combined with an almost fully subsidized cost of $10.68/cwt, results in a profit of $1.82/cwt, or $40 per metric ton ($58 per acre). Thailand fares even better, with a support price of $13.75/cwt, cost of $9.15/ cwt, and market price of $13.75/cwt, yielding a profit of $4.60/cwt, or $101 per metric ton ($124 per acre). The fact that it costs nearly 150% more to produce a crop in the United States than in India or Thailand is problematic enough – but when the U.S. market price remains below competitors’, the situation becomes untenable. While India’s policies have certainly distorted the global rice market, not all of our quality or pricing challenges can be attributed solely to them.
Looking ahead to the holiday season and into the new year, the key storyline will be the acreage planted for the 2026/27 marketing year – or potentially, the lack thereof. With banks increasingly hesitant to finance rice operations and ARC/PLC payments arriving too late to assist, the industry is bracing for a significant acreage reduction. Early estimates suggest a 20–30% decline, though the final number could be even greater.
In Asia, prices appear to have stabilized somewhat. After bottoming out around $350/mt in Thailand and Vietnam, both origins are now reporting closer to $370/mt. India continues to indicate prices near $350/mt, but the upward movement from Thailand and Vietnam could signal a shift from a downward trend to a more sideways market. ∆
US RICE PRODUCERS