2016 Acreage Preview: Rice Acres on the Rise as Drought Recedes

June 29, 2016 05:02 PM

The end of Texas’s punishing drought could mean a resurgence in rice acres in Thursday’s USDA report.

“There’s no doubt we’ll have an increase in planted (rice) acreage in Arkansas this year, but we’ll really see it in Texas,” predicted Jack Scoville, vice president of the PRICE Futures Group in Chicago, who thinks Texas rice acres could jump significantly. “All those farmers who were planting sorghum (due to the drought) are now planting rice.”

Overall, he predicts farmers will plant 2.98 million acres of rice, which is just below the average trade guess of 3 million acres.

That’s actually fairly close to USDA’s March estimates.  In 2016, rice growers intended to plant 3.064 million acres of rice, an increase of 17% from 2015, according to USDA’s Prospective Planting report. The top state for the grain has been Arkansas, where producers expected to plant 1.581 million acres of rice this spring.

The potential uptick is making some in the rice industry a little anxious.. “In all likelihood, it can reasonably be expected that the total acreage number will decrease but the big question will be the actual magnitude. Even small adjustments to this number will have large impacts down-balance sheet and ultimately in the market,” said the U.S. Rice Producers Association. “Until then, the trade can do little except speculate and hope that the USDA does not become even more over-zealous later in the month.”

If rice acreage continues its rise from 2015 and the weather cooperates, growers could have a big harvest this year. Luckily, “export sales of rice have been pretty good,” Scoville said. “We’re going to need that good demand to increase to keep ending stocks down at reasonable levels.”

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