Home Commodities Californian rice area outlook improves slightly as planting finishes

Californian rice area outlook improves slightly as planting finishes



Late May seed survey show around 250,000 acres of rice to be planted: CRC

Market participants await satellite imagery, USDA Acreage reports

Californian rice industry to face $703 mil impact from 2022 drought: study

The planted area for the 2022 Californian rice crop has been looking marginally better in recent days, following the end of planting in late May.

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At the outset of planting, some sources had anticipated that farmers in the state would plant 225,000 acres (91,054 hectares) or even less. However, a recent survey reveals a slightly rosier outlook.

“A late May seed survey reveals roughly 250,000 acres [101,171 hectares] of rice will be planted in the Sacramento Valley this year,” the California Rice Commission said in a statement. Despite the improved estimate, the CRC acknowledges that this figure is “about half the rice acreage planted in a normal year.”

Sources typically agree that this year’s rice crop will be the state’s smallest in at least 50 years. One miller recently told S&P Global Commodity Insights that this could be the smallest crop since 1956.

However, further clarity is expected in late June with the release of a commercial satellite imagery report, which industry sources hold in high esteem. While less scientific, sources will also be waiting to see what area the US Department of Agriculture estimates in its June 30 Acreage report.

The expected drop in output has led to historic price highs, with Platts assessment of US #1, 4% broken white rice most recently being assessed at $1,435/mt FAS FCL Oakland. Calrose paddy was last trading at a record $30/cwt over loan ex-works, which farmers now view as the floor price for the 2022 crop.

While many farmers would commit a large portion of their crop to a marketing pool, one miller said May 27 that “a lot of growers are not signing up to pools like they have in the past,” citing pool guarantees of only $23-$24/cwt over loan ex-works as the reason. Meanwhile, millers have been forced to ration sales, steadily raise their prices and have difficult conversations with buyers as a result.

“This year’s drought-caused reduction in rice acreage will directly impact our state’s small farming communities and the people that rely on agricultural work to make ends meet,” CRC president and CEO Tim Johnson is quoted in the CRC statement as saying.

The statement also cites a new study from University of California that reveals the scale of the damage expected to the state’s rice industry this year. “Drought has driven California’s rice industry to face more than $703 million in impacts, mainly to rice mills, dryers and suppliers,” the study said. “The report further estimates drought will cause 5,300 in lost rice related jobs.”

In this context, industry sources are universally hoping for favorable weather conditions in the next three months as the crop develops, with harvesting of the historically small crop due to commence in September.

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