Rice On The Move

Changes In China Expected To Impact U.S. Rice Markets

(Last Of A 2 Part Series)

MidAmerica Farmer Grower

   China has become a very important issue for the US Rice Producers. Back in 2006, the Foreign Agricultural Service granted the USRPA some funding under the Emerging Market Program to do consumer surveys in Chinese supermarkets.
   “We do not have a protocol. We’re not able to ship rice to China even if the Chinese were here to buy because we have no  phytosanitary protocol,” said Dwight Roberts,  US Rice Producers Association (USRPA) President & CEO, “But the USDA liked the idea of us going to China to let consumers taste U.S. rice. We did it in the upscale supermarkets, of Shanghi and Guangzhou where the upper class shop.”
   Somewhere between two and four million tons of rice in 2013 made China the largest rice importing country in the world. This is bulk rice for the masses, it’s not a specialty, high quality rice, a lot of which comes from Vietnam and their southern neighbors; however it contributes to the fact that China is angling more to the needs of protein, to produce protein. It’s what the consumer wants, and to produce animal protein you need diesel, corn and soybeans.
   Water demands are a growing challenge in China. Many articles have been written about the water situation, the way the rivers are flowing, and the water levels. Water problems are a focus in a lot of places, not just in China, but it’s worldwide. The old saying of Mark Twain that whiskey is for drinking and water is for fighting is becoming truer every day.
   “California has a water problem and that’s going to stimulate an increase in medium grain acres here in the Delta this spring,” Roberts said. “However in China we’re very enthused. We hosted the Chinese government and their quarantine officials, their inspectors. We’ve had potential buyers come here anxious to  buy U.S. rice. We drafted the American Plant Health Inspection Service (APHIS) in Washington, DC and the Chinese officials jointly drafted a protocol; a copy of that protocol has gone back and forth as each side edits it. Recently, the current edition of that was sent back to the Chinese in what we’re hoping is one of the final steps.”
   Bureaucracy is bureaucracy, especially when you’re dealing with two governments such as the United States and China. However, all indications are that this protocol is in the final step of the process.
   “We’re not going to overtake the Chinese market but in a market such as China, we calculate that the high quality market for packaged rice could be a 220- 250,000 ton market of high quality packaged rice,” he suggested. “Growth in the economic scale in China, the consumer, the higher middle class in China are increasingly demanding quality so we think this is a big win for U.S. rice, but we’re keeping our fingers crossed that we’re in this last chapter of this protocol.
   “We have a number of Chinese companies very anxious to offer U.S. packaged rice on the supermarket shelves so this is an issue to watch,” Roberts added. “We were told we were crazy back six, seven years ago. The idea of rice into China, especially back when they weren’t even importing large amounts seemed obscure; however, we could see what was going on internally in the country with the consumer habits and the change in demographics in China, so that’s obviously what spurred the Foreign Agriculture Service and the USDA to agree to do those initial studies. So we like the direction that’s heading.”

Dwight Roberts, US Rice Producers Association (USRPA) President & CEO, discusses the rice
needs and industry in China, one of the largest rice importing countries in the world.
Photo by John LaRose, Jr.

   In the future, the U.S. rice industry will be largely dictated to the rice farmer by their competition which is corn and soybeans. What happens in the corn market, the soybean market will determine an increase in acres.
   “A month or two ago we were talking about an increase in rice acres of 10 to 15 percent, which will put us back into a different aspect of the market if we have abundant supply,” Roberts predicted. “As long as corn prices stay where they are, it’s definitely going to be more attractive to grow more rice, the early and medium grain.
   “The problems in California, while unfortunate for them, is going to provide some opportunity in the grain market here,” he continued. “I understand seed is in short supply for medium grain, so right there is an indication of intentions to grow more medium grain rice. It’s going to be an interesting year, no two years are alike in the rice world. It’s going to be interesting to see what they do. Of course, in this area of the country you have an advantage to see what they planted down along the Gulf Coast and as the plantings make their way north you’ve got the opportunity to make some adjustments to your variety decisions, or your overall acreage and hopefully we’ll have good weather.”
   Last year Missouri and northeast Arkansas had a very difficult time; it was cold when it was supposed to be warm, it was wet when it should have been dry, That’s why it is said there’s no two years alike in the rice world.
   “Every year there is some new phrase. I think this year’s new phrase was the polar vortex, something I never heard of before,” Roberts said.
   In 2008 when commodity prices went extremely high, that was the year of food security. Every country in the world had to decide on a food security plan. Other years, weather conditions like El Nino and La Nina provide new challenges.
   “It’s like one farmer in Texas told me recently, ‘we haven’t had normal weather in 40 years’ and it sure feels that way,” he quipped.
   “However, I think there are some good things to look at, I think we’re going to continue to grow this market. Our research industry has to continue to provide the farmer with high yielding, high quality varieties. We need the combination of the two – the high quality to satisfy the customers, to satisfy those markets in Central America that like a very loose, fluffy rice, with a high enough amalose content that they like; and we have to provide the farmer with high yielding at the same time. So those are challenges that I have a lot of faith in our research  industry; what keeps our farmers in the ball game is new technology, new research in various aspects of production agriculture,” he summed.∆
   BETTY VALLE GEGG-NAEGER: Senior Staff Writer, MidAmerica Farmer Grower
MidAmerica Farm Publications, Inc
Powered by Element74 Web Design