California rice farmers’ worries grow along with rice
by Ching Lee

WOODLAND
February 20, 2013 11:49am
Comment Print Email

•  Increased competition, increased costs plus Congress

•  “This year is kind of scary”


Greater competition from Australia and Egypt in the global market has dampened export prospects for California rice, and farmers say they worry they will have a harder time covering their production costs as they face lower returns and uncertainty in future farm programs.

"This year is kind of scary with all the high costs we have, like fuel, fertilizer, chemicals, labor and equipment," says David Lundberg, a rice farmer in Butte County. "It seems like every year they keep going up. The budgets are pretty tight now. You have to make sure you really watch it and get a good yield."

Mr. Lundberg notes the market price for rice has come down, even though California acreage and production both dropped last year.

Nathan Childs, an agricultural economist with the U.S. Department of Agriculture, attributes the price decline for medium- and short-grain rice to a weakened export market due to stronger competition from Australia and Egypt.

California exports about half its rice crop, with the largest market in Northeast Asia, which includes Japan, South Korea and Taiwan. While those exports have remained stable, Mr. Childs says, California's other key markets in the Mediterranean and Oceania face substantial competition from Australia and Egypt.

In recent years, California rice farmers — who produce about 70 percent of U.S. medium- and short-grain rice — had benefited from poor production in those competing countries, he notes. Australia's crop was sharply reduced by years of drought, while Egypt had not exported much rice due to water shortages and rice export restrictions imposed by the Egyptian government.

"Those factors have reversed," Mr. Childs says. "Both countries are shipping more-normal levels of exports, and the U.S. has lost some market share, especially in the Mediterranean."

Australia's 2012-13 crop, which will be harvested in April and May, is expected to be the largest since its 2001 harvest and Egypt had a record 2012-13 crop, Mr. Childs notes.

Mr. Lundberg, who is not associated with Lundberg Family Farms, says he hopes prices will be higher but thinks it will depend on how much rice is planted. Farmers in Arkansas, Mississippi and Louisiana have switched to growing medium-grain rice in years when prices have not done as well for long grain, the dominant variety grown in the South. But with prices of competing commodities such as corn being high, Mr. Lundberg says farmers may grow more of those crops and less rice, boosting prices.

California's 2012 rice acreage was 556,000, about 24,000 fewer than 2011, says Chris Greer, a University of California Cooperative Extension farm advisor for Yuba, Sutter, Colusa, Sacramento, Placer and Nevada counties. He says he expects 2013 acreage will be about 525,000 to 550,000, "which would be about average for us if you look over the past 10 years."

"The indicators are that the market has stabilized and is possibly on the up-trend," Colusa County rice farmer Chris Torres says. "We're hoping it's going to get better, but we just don't know."

Both he and Mr. Lundberg says they do not have the kind of ground or equipment to switch to other crops and plan to grow the same amount of rice as in other years.

Another issue that has farmers worried and confused is the status of the farm bill and the future of direct payments. Even though the 2008 Farm Bill has been extended to September, Tim Johnson, president and CEO of the California Rice Commission, says farmers still face uncertainty about whether they will receive a full direct payment this year or one that is subject to cuts from sequestration, perhaps as high as 8 percent.

Rice farmers were told initially that the extension of the farm bill effectively extends their direct payments at the 2012 level for the 2013 crop. But as lawmakers grapple with how to pay for sequestrations, Mr. Johnson says, "there are discussions in Congress right now over a broad range of subjects relating to the direct payment," including whether to eliminate them this year or just make cuts to the payments.

"From the commission's perspective, it's unfair to tell farmers that you're going to have a continuation of the same farm program they've had for the last five years and then come back and change that program after you've already told farmers to go and sign up," Mr. Johnson says. "It would be absolutely disastrous and unconscionable to take away the direct payment completely, with no other program in place."

With these unknowns about the farm program, Mr. Lundberg says he's watching his costs, spending less money and not buying any new equipment until he knows what Congress decides to do.

Mr. Johnson says most growers understand that direct payments likely will not be a part of the next farm bill, as "Congress has very clearly sent that message throughout last year." It is expected that some form of revenue protection program will take the place of direct payments to provide a safety net for farmers, he adds. However, the House and Senate have yet to reconcile their differences on specifics of such a program, he says.

Mr. Johnson says the commission has been advising farmers to set appointments with their local Farm Service Agency office early and sign up their acres. Farmers typically receive their payments in October.

(About the writer: Ching Lee is an assistant editor of Ag Alert, a publication of the California Farm Bureau Federation, from which this is republished with permission.)


Comment Print Email












  • How to compete against Wal-Mart
  • Stockton mom turns a need into a business
  • The entrepreneur is in
  • Writing her own success story
  • Growing a small business the family way
  • The future pencils positive for this company
  • Niche marketing -- Italian style
  • Sipping success with niche marketing
  • Roasting a business out of his passion
  • Success as an independent consultant takes more than expertise
  • Avoiding the traps of employee law violations
  • Cracking the voice-over market
  • The American Dream realized, one package at a time
  • Female winemaker plunges into business
  • A new take on nurse education
  • Family sees moving business success
  • STEM thrives in pockets of education innovation
  • STEM goes solar in Stockton
  • Quick! There’s a robot in my pool
  • Retiring seniors can mean new business
  • Predawn biotech class trains next generation of science workers
  • Staying ahead of the competition the old fashioned way
  • Central Valley sees mismatch between high-tech jobs and job seekers
  • STEM starts young
  • Get ready – the future is here now
  • STEM Education: Growing the Valley's Future
  • They’re low power in wattage only, not ideas
  • Thinking success spawns Successful Thinkers
  • Small business success can mean finding the right niche
  • This franchise has real muscle behind it
  • Getting the scoop on small business success
  • Reshoring could rebuild America's manufacturing
  • Marketing that’s deliberately anchored to the past
  • Guitar artist plays his way to success
  • Paralysis no handicap for this entrepreneur
  • Boost sales with better communication
  • Making sandwiches sexy with a franchise
  • Going solar without spending a lot of money
  • They’re cute and cuddly. But are they a business?
  • Opportunity sails forth in the Delta
  • How bad etiquette on the job could kill your career
  • Growing their way out of hunger and poverty
  • Finding small business success from floor to ceiling
  • Why he’s public enemy #1 – for gophers
  • Running a home-based business successfully
  • Your boss needs a vacation – really
  • Couple makes transition from big corporations to small business
  • Carving a small business niche with a better idea
  • Calm is the goal of computer service and education franchisor
  • Developer squeezing new life into downtown with juice franchise
  • Signs of a recovering economy
  • How to keep a family business in the family
  • Ford dealership expands despite the Great Recession
  • Utility Telephone connects with customer service
  • Crowdfunding basics
  • The roar from crowdfunding is getting louder
  • California water wars’ bulldog
  • Water wars heat up in California
  • Helping businesses grow with a stronger STEM
  • How to retain your best employees
  • Small business runs success up the pole
  • Winery expands in Lodi
  • Lodi wineries tapping into growing Chinese market
  • Has the jobs picture brightened for the Valley for 2012?
  • The right education will be needed for 21st Century jobs
  • Where new jobs for San Joaquin will come from
  • Developing jobs for San Joaquin – Part 2
  • Developing jobs for San Joaquin
  • Fruits of his labor
  • Helping grow food security in the Valley of plenty
  • Doing a business turnaround despite the recession
  • Keeping customers loyal helps build her business
  • Expo exposes businesses to utility contracting ideas
  • Drink mix maker taps expertise to blend success
  • Entrepreneur finds success in a basket
  • Tips for catching resume fraud
  • There’s no checking out for this small business owner
  • Entrepreneurs take Valley sports play-by-play to the world
  • Starting a winery from scratch
  • Job hunting tips for the long-term unemployed
  • In the Central Valley, opera isn’t always the Grand Ole Opry
  • Branding ideas for small businesses
  • The ump’s not blind, but the players are
  • Finding success by tapping your brain in a new way - Part Two
  • Finding success by tapping your brain in a new way
  • Machines talking to machines is the future
  • Getting involved in the fight against AIDS
  • Franchised divorce says it’s a better way
  • Small business owner is brewing a success story
  • To beat the Great Recession, they’ve expanded
  • Taking a swing at strokes
  • Alert your taste buds – here comes Taste of San Joaquin
  • This franchise has real muscle behind it
  • Passion for his city drives him
  • Vicente Fox speaks out on U.S.-Mexico relations
  • Give your support staff recognition and reap top performance
  • Central Valley baker gets top honors for Royal Wedding pie
  • Asparagus Festival ends on high note
  • Stockton close to annual ‘tipping’ point
  • Framing small business success
  • Small business sees Affordable Care Act helping its bottom line
  • What you eat – and when – helps local restaurants
  • Coping with the aftermath of foreclosure
  • How to raise charming children
  • Central Valley grad school goes all-iPads
  • Solution to Delta water wars voiced
  • Making sure your personal bottom line is covered
  • Small California winemaker is all family
  • Small winery relies on family and innovation to compete
  • Central Valley company says it has a better way to store solar power
  • What’s wrong -- and right -- about local TV news
  • What planning means to small business success
  • Making the leap to small business
  • Out of work at middle age? Experts offer advice
  • Small business marketing, one article at a time
  • Congress on your corner as it’s supposed to be
  • Central Valley city’s heritage rediscovered
  • Central Valley school is building students’ foundations
  • Job tips from the expert
  • Long-term jobless worker re-invents himself
  • Building a new power plant means jobs for Central Valley
  • Sacramento reaches for the stars with new science center
  • Lodi Chamber opens China’s doors to small business
  • Writing books for fun – and sometimes profit
  • Black Friday shopping? How to protect yourself from scams
  • California winemakers can find added rewards overseas
  • Wine makers tap overseas markets from Lodi
  • A new revenue stream for Central Valley small businesses
  • Food bank seeks more business support
  • Tips for finding a job in the Great Recession
  • State may solve some of its prison woes with new Stockton facility
  • A solution to underwater mortgages
  • Should public libraries be managed by private firms?
  • Central Valley moves ahead with critical water project
  • Dee Dee Myers and the increasing impact of women on small business
  • How women are growing their small businesses
  • A market with a mission
  • Retailer 'paints' solutions to cash flow challenge
  • An answer for the unemployed – return to school
  • A ‘golden’ small business success story
  • Central Valley winegrapes blessed
  • Rubbing out the recession with a franchise
  • Surviving the recession as a small business
  • It’s personal, union says of Stockton fire cuts
  • How old it too old to start a new business?
  • They've found the recipe for small business success
  • MBA students help revive Central Valley farmers market
  • Classic wooden yachts anchor in Stockton for weekend
  • Foreclosures, short sales – a bank president comments
  • The strength of family helps this small business compete
  • Festival spears success in Central Valley
  • Social media helps keep family business prospering
  • Central Valley students get training in ‘green’ futures
  • Knives readied as Valley cities slash services
  • Central Valley jobless picture still grim
  • Delta residents told to ready for water war
  • Opportunities outlined for Central Valley small businesses
  • Rewiring your brain for success
  • Central Valley no longer ‘shell shocked’ by recession
  • To fix California’s government, look to London
  • Taking your sales pitch to the next level