As Australia dries, a global shortage of rice

Int'l Herald Tribune (NYT) ^ | April 17, 2008 | Kieth Bradsher

[fishhound]

DENILIQUIN, Australia: Lindsay Renwick, the mayor of this dusty southern Australian town, remembers the constant whir of the rice mill. "It was our little heartbeat out there, tickety-tick-tickety," he said, imitating the giant fans that dried the rice, "and now it has stopped."

The Deniliquin mill, the largest rice mill in the Southern Hemisphere, once processed enough grain to satisfy the daily needs of 20 million people. But six long years of drought have taken a toll, reducing Australia's rice crop by 98 percent and leading to the mothballing of the mill last December.

Ten thousand miles separate the mill's hushed rows of oversized silos and sheds — beige, gray and now empty — from the riotous streets of Port-au-Prince, Haiti, but a widening global crisis unites them.

The collapse of Australia's rice production is one of several factors contributing to a doubling of rice prices in the last three months — increases that have led the world's largest exporters to restrict exports severely, spurred panicked hoarding in Hong Kong and the Philippines, and set off violent protests in countries including Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Italy, Ivory Coast, Mauritania, the Philippines, Thailand, Uzbekistan and Yemen.

Drought affects every agricultural industry based here, not just rice — from sheepherding, the other mainstay in this dusty land, to the cultivation of wine grapes, the fastest-growing crop here, with that expansion often coming at the expense of rice.

[fishhound]

ping

[acoulterfan]

Wow, I didn’t know there was this much of a shortage. Interesting article.

[fishhound]

seems more like free markets deciding not climate. Grapes were more profitable than rice.

[Fiji Hill]

Good news for the folks in Colusa, Yolo, and Sacramento counties, in California’s rice belt.

[Aussiebabe]

No, rice is grown in different area. However, it doesn’t make much sense to grow rice here when it uses such a high amount of irrigation. We should just import rice.

[fishhound]

I think the article is deceptive.

Do you know if there a specifically Californian rice?

Thanks

I don’t mean “fried” either...LOL

[fishhound]

The way that are talking about it in the news makes one wonder where but from the US can countries import so much?

[SAJ]

Speaking as a trader, I should MUCH rather be long rice than long soy or corn or wheat.

Rice IS water. No water, no rice. You may have noted that at least 3 major Asian rice-growing nations have either barred rice exports outright, or suspended them indefinitely.

The leading rice expert in the US, chap named Milo Hamilton (spent 12 yrs as the lead buyer for Uncle Ben, helped write the Rough Rice contract on the Chicago Board of Trade) considers that rice has a definite shot at $50/cwt within the year (depends on how the N. Hemisphere new crop turns out) and a possible shot at $70/cwt.

Front month rice is trading now at $22.xx/cwt. Think about it. Think about the food riots that will ensue in Asia if rice trades above $30-35/cwt.

THIS is a bull mkt, m'friend. Wheat? Hah! Corn? Fuggedabouddit.

[Fiji Hill]

The California Rice Commission's website features a page describing the varieties of rice grown in California, available here.

[fishhound]

Thanks.

I try to buy American and we produce so many regional items that I like it when I find new things.

[SAJ]

The US has for years had the 'swing' supply in rice. No other sizeable rice-growing nation will ever export rough (i.e. unmilled) rice now that Australia is out of the game. However, given a couple of crop disasters, and given the peculiar Asian nation viewpoint that EVERY nation should be self-sufficient as to their own rice supply, the price of US rice -- likely the only source this year for add-on imports -- is probably going to explode.

If you and your family use ANY amount of rice in your meals, I should strongly consider buying a 10-lb sack of it right quick. Store it anywhere you like, as long as the place is high and dry. Use it as/when you will. Suggest putting it into X number of used quart pickle jars (well cleaned of course) -- it'll keep forever in those, if they're tightly closed.

N.B. just saw a very good grade of Basmati (far better than Uncle Ben's, just FYI) 10-lb sack at $11.99 retail. Unless there is a simply fantastic crop this year, worldwide, the same sack will cost at minimum 50% more by autumn.

[garandgal]

True...but didn't we have a real problem last year with wheat (weather problems); the soybean futures seemed to mirror it somewhat when supplies were short.

I believe there will be many more soybean acres planted this year, due to futures contracts already made (by the producers, and at the expense of corn acres)...but we are having a late start to the planting season pretty much all over the Midwest due to cold temps and moisture.

If there are already problems with rice, a weather issue with corn or soybeans could really create some interesting times.

[SatinDoll]

Thanks for the tip. We eat brown basmati regularly, at least three times a week at dinner and twice for breakfast. I have some white buckets with resealable lids that will hold at least thirty pounds apiece. Sounds like I can put them to good use.

[SAJ]

Couple of points here. **WE** didn't have much if any problem with the wheat crop last year. However, OZ had it's second bad year in a row with their crop, Pakistan's crop was a disaster, and Ukraine -- normally a huge producer -- had a very off-year.

The USDA planting intentions report of 31 March indicated farmers' **intentions** to plant way more bean acreage at the expense of cotton and corn acreage. Everyone knows this, but there's a kicker that will likely change the game, this year.

Bean/corn acreage is almost entirely fungible, that is, you can usually grow either crop in the same acreage. Farmers will almost always go for the higher dollar yield from a given bunch of acres. And that poses a problem for the corn bulls.

On something like 90% of the corn/bean acreage in the US, given current price levels, the farmer will STILL make more net profit growing corn than beans. Therefore, what is likely to happen is that, as planting progresses, their stated ''intentions'' (and, make note, farmers lie to USDA about their intentions just the same as voters lie to pollsters...!) will change in favour of corn.

FWIW, I very much like buying OLD crop beans and selling NEW crop corn against them, in a ratio of 1 bean vs 2 corn.

The loser in the acreage game this year is a dead cinch to be cotton. If you believe -- as many do, given record snowpack in the N. Rockies and given extremely damp grounds in the upper Miss Valley -- that there's apt to be a major flood this year, what you want to do (aside from buying July Rice, which is a no-brainer on ANY dip, if we get one) is to get long Dec Cotton.

As a friend of mine on the old NY Cotton Exchange put it in 1973: ''If you can't see the ground, you can't plant the cotton, and if you can't plant it, you can't grow it, and you won't be selling it either, come October.''

1973, as you may recall, was the year of an enormous flood from the MO-IA border right down to the Gulf. Dec Cotton hit 90 cents that year, first time since the Civil War.

Good trading to you!

[SAJ]

Do it, luv. Excellent idea. SAJ is many things, but he simply doesn't kid around AT ALL in the mkts, esp. when supply rates to be disastrously low.

Like the bucket idea (but pickle jars will do for me...    ;^). Best wishes and FReegards!

[1COUNTER-MORTER-68]

Resolution for Louisiana rice growers: quash weevil / Resolution for ...

http://rds.yahoo.com/_ylt=A0oGkmtj7gZIY_YA5HJXNyoA;_ylu=X3oDMTEydmhyMGphBHNlYwNzcgRwb3MDMgRjb2xvA3NrMQR2dGlkA0Y2NjZfODQ-/SIG=126226vui/EXP=1208500195/**http%3a//deltafarmpress.com/news/070105-rice-weevil/

Hopefully we can keep the bugs Out...;0)

[SatinDoll]

I’ve several large, commercial-sized glass pickle jars, but I know if I dropped a full one and shattered glass and rice spread all over the cement floor, I’d probably cry! And I’m not a rice eater!

[SAJ]

Yep. The water weevil has been a problem for decades in LA rice. BTW, LA isn't the factor it used to be in the rice mkt -- AK has grown hugely in the past 10-15 years, and TX (borers aside) is enormous, relative to LA.

A number of AK growers are really sharp, too. They've taken the trouble to research and plant some super-premium grades of rice that the Japs absolutely love. Cha-ching $$. Won't be short of water this year, either -- their crops ought to be fantastic.

[SAJ]

OK. Stick with the buckets, then.

;^)

[garandgal]

On something like 90% of the corn/bean acreage in the US, given current price levels, the farmer will STILL make more net profit growing corn than beans. Therefore, what is likely to happen is that, as planting progresses, their stated ''intentions'' (and, make note, farmers lie to USDA about their intentions just the same as voters lie to pollsters...!) will change in favour of corn.

I know....among other things, we farm 3000 acres of corn/soybeans; I'll let you guess our intentions...LOL!

That's why I told you that we were having some weather issues in areas where corn should have already been planted. Now the farmers weigh the risk/reward between late-planted corn, and high priced soybeans. I know that the market has been trying to buy corn acres; but the weather may have already become an issue. Just sayin'.

Oh, and the input costs for corn have literally soared; making the stunningly obvious difference in profit between the two crops several years ago, only slight.

If you market your crop correctly, that is.

[kingu]

I suppose modern industries made the dustbowl of the 1930’s. Cyclical droughts are quite common across the planet - the Mayan calendar that everyone loves to tout about simply details the drought cycle - in certain periods, there just isn't going to be any rain expected.

But what's interesting is that while the article is pitched mostly to show us the doom and gloom that comes from ‘global warming’ even though everyone they quote is onto the new mantra of ‘climate change’, the truth is that the overall economic output is rising in these ‘drought’ areas by switching crops to that which is more money efficient.

It's hard to use wine as a daily sentience, but there's certainly enough people out there who will attempt to use that. And what land isn't being used for grapes is being used for wheat, and some are apparently making a similar amount of money simply by selling the rights they had to use water supplies.

[SAJ]

I'm with you entirely, m'friend. Inputs (fertiliser, of course) aside, corn benefits more from better subsoil moisture than do beans, true? And (well, for most places, depending on where you are, of course), subsoil moisture is and should continue to be excellent.

If I had to guess, I'd say you'll be doing 75% corn/25% beans, normal rotation, on your acreage. Maybe the guess is close, maybe not.

However, the REAL question is: What did you tell the USDA survey?

heh heh heh heh heh heh heh heh heh heh ...(couldn't resist...sorry!)

;^)

[garandgal]

If I had to guess, I'd say you'll be doing 75% corn/25% beans, normal rotation, on your acreage. Maybe the guess is close, maybe not.

Actually, that was last year...let's just say we can grow some very good beans in our area...we also have a low-lin crusher ten miles away, so we benefit from a premium.

Yes, corn benefits greatly from subsoil moisture...but it has to dry out enough, and the soil temp needs to warm up enough, to prevent a host of problems that can occur if it is planted too soon.

We are still fine, timewise...but much of Illinois, and S. and Central Iowa, where planting should be well underway are at a standstill...with more rain in the forecast. It is April 17th...across the board, 50% of the corn crop should be planted in the next 13 days. We have some bizarre winds here that dry things out quickly, but the cornbelt appears, at this point to be behind the curve.

On the other hand, we could have a late planting; then perfect greenhouse-like conditions for the rest of the growing season!

Isn't this fun???

[1COUNTER-MORTER-68]

Well,,,Last year it was Corn,(40% over record harvest)IIRC.

This year should be the same,,,

As long as they grow enough rice for the Gumbo,,,

I’m happy,,,Fo’Sho...;0)

[steelyourfaith]

From the link:
" In addition to drought, climate change could also produce more extreme weather, more outbreaks of pests and weeds, and changes in sea level as polar ices melts. Most of the world's increase in rice production over the last quarter-century has occurred close to sea level, in the deltas of rivers like the Mekong in Vietnam, Chao Phraya in Thailand and Ganges-Brahmaputra in Bangladesh."

 

Beam me to Planet Gore !

[sergeantdave]

I just bought a 10 pound bag of mahatma rice for six bucks and change. Rice prices were higher two years ago.

What has been skyrocketing in price is northern wild rice. I think it’s a result of kids spending too much time in front of Mr. Computer and not enough gumption to get in the boat and make a few hundred bucks on a weekend.

And you’re right about basmati - just discovered it and it’s really good stuff. I even throw it in my chicken soup concoction.

[Aussiebabe]

This is really a stupid article. Aussie rice growers have been under pressure to stop growing rice and taking up so much water, especially when we use such little rice in the country. Actually, the drought has broken in most of the country, with the exception of South Australia ( where over 50% of the grapes and wine are already produced). We certainly don’t need any more grapes. Last year they were destroying the grapes because we had too many.

[SAJ]

Prices higher 2 years ago? If you say so.

Tables below courtesy of Time & Timing.

The top entry in each table is the current (i.e. front-month) contract. Prices this year are more than double those of two years ago, and have made new contract highs almost every day for the past month.

 Rough Rice — Wednesday  April 16, 2008
                               
           open    high     low    close    chg     date & ctrct high    date & ctrct low

May '08   2260.0  2284.5  2203.0  2255.0    38.0   2008-04-16  2284.5   2007-07-17  1135.0
Jul '08   2282.5  2318.0  2235.0  2287.5    38.5   2008-04-16  2318.0   2007-07-17  1160.0
Sep '08   2076.0  2124.0  2060.0  2098.0    33.0   2008-04-16  2124.0   2007-09-25  1189.0
Nov '08   2070.0  2119.5  2062.5  2099.0    29.0   2008-04-16  2119.5   2007-09-17  1190.0
Jan '09   2114.5  2115.0  2108.0  2108.0    16.0   2008-04-16  2115.0   2007-11-15  1277.0
Mar '09   2150.0  2150.0  2118.0  2118.0    16.0   2008-04-16  2150.0   2008-01-23  1455.0
May '09   2128.0  2128.0  2128.0  2128.0    73.0   2008-04-16  2128.0   2008-03-18  1675.0


 Rough Rice — Thursday  April 13, 2006   (market was not open on Sunday  April 16 )

           open    high     low    close    chg     date & ctrct high    date & ctrct low

May '06    834.0   840.0   834.0   840.0     7.0   2006-02-06   901.0   2005-07-20   719.0
Jul '06    865.0   869.0   865.0   869.0     6.0   2006-05-24   941.0   2005-07-20   738.0
Sep '06    886.0   890.0   886.0   890.0     5.0   2006-08-16   988.0   2005-10-27   820.0
Nov '06    903.0   908.0   903.0   908.0     5.0   2006-08-15  1014.0   2005-12-02   830.0
Jan '07    925.0   926.0   925.0   926.0     6.0   2007-01-12  1052.0   2005-12-01   845.0
Mar '07    938.0   942.0   938.0   942.0     7.0   2007-01-12  1075.0   2006-03-20   904.0
May '07    958.0   958.0   958.0   958.0     8.0   2007-01-12  1095.0   2006-03-23   941.5

Tables are © 2006-2008, S. A. Johnston and Time & Timing

[BullDog108]

I'm still eating my Y2K Basmati. Sealed in large plastic buckets, its over 8 years old and STILL delicious!

I don't like the American versions from Cali or Texas, only genuine GANESH Brand from the Punjab for me.....

[fishhound]

I paid 11.99 US for one 15 lb burlap bag of Basmati from India.

sergeantdave you got a good price.

[fishhound]

I agree with you about the article. But I don’t know much about Australia. :)

[RayChuang88]

What's interesting is that the high price of rice could mean agricultural economies of Texas, Arkansas and Louisiana are going to be booming soon as more and more rice are planted in these three states. California, alas, is pretty much at its limit in terms of growing rice due to limits in the amount of water available from the Central Valley Project.

I myself eat about 50% Thai Jasmine rice and 50% Texas long-grain rice, though it's likely I'll switch to 100% Texas rice at the rate things are going.

[muawiyah]

It was climate. Besides, grapes and rice usually don't occupy anything near the same sort of growing environment. At peak produciton, Australia was only 1% of global export production. Thailand is usually #1 with 1/3 of all rice that is exported anywhere in the world.

[fishhound]

What do you think of post 28?

[muawiyah]

I think the rice country is in the river valleys and the wine country is in the foothills ~ same as everywhere else on Earth.

[fishhound]

Thanks.