Rice ends on a low note for Lousiana farmers
VIDALIA — While most crops ended 2010 on a high note with their prices, one major Louisiana crop saw a decline.
Rice’s value dropped more than $4 from 2009 to 2010 going from $16.80 a hundredweight to $12.50 a hundredweight at the end of 2010.
This large decrease is alarming to many area farmers, because rice is one of Louisiana’s top crops, with roughly 400,000 to 500,000 acres of rice in the state,
LSU AgCenter economist Mike Salassi said rice costs more to grow than other top area crops like corn and soybeans, meaning the drop in price affects farmers a little more.
“There are certainly more acres of other crops in the state, but the value you get back on rice is much higher,” he said.
Salassi said the drop in price stemmed from an increase in production among U.S. rice growers.
“Half of our rice crops in America are exported, so the world market plays a big role on what our domestic crops do,” he said. “If world production goes up or down, or the demand changes it, it affects our exports.”
Salassi said the world’s demand for rice generally stays at the same level, but the amount of supply is always changing.
“This year there were more producers, causing the market to have more rice,” he said. “That lowered the prices.”
Salassi said there is good news for farmers, as the end of the year projections have rice rising back to around $15 a hundredweight.
“It looks like we are going to gain around $2 to $3 a head this year,” he said. “Foreign prices have risen, so our export prices have risen, pushing the price up.”
Salassi said most of Louisiana grown rice is exported to other countries.
“As close to the gulf as we are, more than half of our crop is exported,” he said. “A large portion of it goes down to Latin America.”
Salassi said farmers need to be wary of the rising costs, because while it may help, farmers also have many other expenses with which to deal.
“When you look at costs, many people just look at market prices but you also have to look at production costs,” he said. “Fuel is 40 cents higher and fertilizer is going up. Just because the market price is higher doesn’t mean the return will be.”
Salassi said production costs could rise approximately $30 to $50 an acre this year.
“Rice is very expensive to grow,” he said.
Salassi said Louisiana’s other main crops, sugar cane, soybeans, corn and cotton, are all sitting pretty for farmers in 2011.
“They are all looking good,” he said. “And they should all continue to look that way.”
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