Arkansas Rice Update 12-19-24

by Jarrod Hardke, Rice Extension Agronomist - December 19, 2024

Arkansas Rice Update 2024-25

December 19, 2024

Jarrod Hardke, Scott Stiles, & Hunter Biram

“And are the good times really over for good?”

No Pot of Gold

This is that fun time of year when we try to figure out which way is up for the coming crop year.  Unfortunately, despite very good yields across the board in 2024, many are finding things didn’t really cashflow.  Now we have an even more disappointing outlook for 2025 – that is to say, profitability isn’t really in the vocabulary.

Regardless of what direction we look, every commodity spells trouble in 2025.  A brief look at Table 1 paints a rough picture with high break-even yields for different rent structures.  Clearly, survival will be the name of the game in the upcoming season without some kind of change.  And this information only refers to operating costs (direct costs) and does not account for fixed expenses and farm overhead.

Also, please follow this link to download an Excel spreadsheet for 2025 Arkansas Crop Budget comparisons where you can look at Break-Even Yields and Returns across various crops and rent scenarios with the ability to change input costs and prices to reflect your situation:  2025 AR Crop Budget Comparisons.

On the rice side of things, seed availability looks to be an even greater issue this year than in 2024, which just adds to the woes.  Difficulty in getting what we want / need to plant on specific acres will make it tougher to produce the yields we need to get through the year.  Focusing on our most beneficial inputs and cutting the rest will be key.  To that end, see the list of winter production meetings in January and February 2025 so you can mark your calendar.  And as always feel free to contact any of the specialists to assist in planning how to make things work this year.

In case you missed it, results of the Arkansas Rice Performance Trials for 2024 are posted here:

https://arkansascrops.uada.edu/posts/crops/rice/2024_Arkansas_Rice_Performance_Trials_Final.pdf

I want to wish everyone a Merry Christmas and a happy holiday season.

Let us know if we can help.

Table 1.  2025 crop comparison for break-even yields.

*For cotton, cottonseed value of $179.58 has been added to calculated income.

Prices reflect current (12/18/24) Fall 2025 Cash Bid Prices.

Operating Costs – 2025 direct expenses modified from Enterprise Budgets (https://www.uaex.uada.edu/farm-ranch/economics-marketing/farm-planning/budgets/crop-budgets.aspx)

Disclaimer: Tables are to be used as a decision-making aid & are not a predictor of expected yield, price, or operating expense.

Rice Market Update

Scott Stiles

The USDA’s December supply/demand report did not include revisions to U.S. rice production estimates.  This month’s update focused solely on the demand side of U.S. balance sheets.  Final 2024 production will be released by USDA on January 10, 2025.

In this month’s supply/demand report, 2024/25 long-grain exports were reduced for the second consecutive month, declining by 2.0 million cwt to 72.0 million.  U.S. export sales and shipments to key markets such as Mexico and Iraq continue to lag last year’s pace.  The removal of India’s export price is expected to create a particularly competitive landscape for U.S. milled rice exports.

The deeply discounted Asian rice supplies are finding their way into our backyard with Pakistan selling significant quantities to Haiti – generally our #1 LG milled market.  Also, milled rice from Thailand is being sold into Mexico.  At the present time there is a very wide price gap between U.S. and Asian rice prices.

For the week ending December 10, Thailand 100-percent Grade B long-grain milled rice for export was quoted at $520 per ton and prices for Pakistan 5-percent broken kernel rice were quoted at $460 per ton.  By comparison, prices for U.S. long-grain milled rice, No. 2 Grade, 4-percent broken kernels were quoted at $750 per ton for the week ending December 10, which is actually fairly close to current South American quotes from Argentina and Uruguay.

This month’s reduction in long-grain exports pushed ending stocks higher to 31.1 million cwt., which is a hefty 11.8 million increase over last year’s 19.3 million cwt.  At 31.1 million, long-grain ending stocks would be the largest since 2018/19’s 32.6 million cwt.

The 2024/25 long-grain season average farm price was unchanged this month at $14.50 per cwt. Or $6.53 per bushel.  The average farm prices for the 2023 crop was $15.90/cwt. Or $7.16 per bushel.

Chicago rice futures have been in a downtrend lately, with the January and March contracts losing about 50 cents per cwt this month.  New crop September has hardly traded in recent weeks, however it turned sharply lower Wednesday and is near its’ contract low of $14.05 ½.  At this writing, August to October 2025 bids at mills are roughly $6.10 per bushel.

Economic Assistance to Farmers Included in Year-End Legislation

Hunter D. Biram, Assistant Professor and Agricultural Extension Economist, University of Arkansas

Congressional leadership released a 1,547 page draft of a continuing resolution (CR) which includes $10 billion in economic assistance for farmers, a one-year extension of the 2018 farm bill, and funding for the government through March 14^th, 2025. The economic assistance for farmers follows the payment mechanism laid out by the Farmer Revenue Assistance Mitigation (FARM) Act introduced by Congressman Trent Kelly (R-MS-01). The payment, outlined on pages 34-41 of the CR, is based on three key variables: national season-average price reported, 10-year national average yield, and 2024 cost of production.

Two key elements of this payment mechanism differ from the FARM Act: the payment factor and minimum payment calculation. The payment factor has been reduced to 26% of the estimated economic loss from the 60% factor in the FARM Act. However, a minimum payment has been included which is to be the product of 8% of the 2014 statutory reference price and the national average PLC payment yield. Among nine program crops relevant to southeastern states, three should expect to see the minimum payment be greater than the estimated payment (see Table 2). These crops include barley ($22.60/acre), peanuts ($76.48/acre), and rice ($69.76/acre). The other six program crops considered will receive the estimated payment per acre and include corn ($43.80/acre), cotton ($84.70/acre), grain sorghum ($41.85/acre), oats ($80.14/acre), soybeans ($30.61/acre), and wheat ($31.80/acre). See a full breakdown of the payments by crop in Table 2 below.

While this has generated much interest over the past 24 hours, the CR has not passed. The deadline to pass a funding bill to avoid a government shutdown is Friday, December 20^th. This implies that Congress has about two days to put together a package which will pass. Speaker Mike Johnson (R-LA-04) and Senate Majority Leader John Thune (R-SD) have both voiced support for economic assistance to farmers both immediately and in farm bill negotiations in 2025. However, there has been opposition from GOP hardliners who have voiced frustration over not pushing funding issues to 2025 when the new administration takes office (Agri-Pulse). Economic assistance seems likely, but we will not know with full certainty until the bill passes.

Other resources

Southern Ag Today (Fischer and Outlaw): https://southernagtoday.org/2024/10/24/economic-assistance-for-the-2024-crop-year-starting-to-take-shape/

ProFarmer: https://www.profarmer.com/news/policy-update/preliminary-assessment-ag-payments-cr-national-cotton-council

Use the Arkansas Rice Advisor Internet App!

The Arkansas Rice Advisor site https://riceadvisor.uada.edu functions like an app on your mobile device.  There you can readily access the DD50 program, rice seeding rate calculator, drill calibration, fertilizer and N rate calculators, publications, and more.

Additional Information

Arkansas Rice Updates are published periodically to provide timely information and recommendations for rice production in Arkansas.  If you would like to be added to this email list, please send your request to rice@uada.edu.

This information will also be posted to the Arkansas Row Crops blog (http://www.arkansas-crops.com/) where additional information from Extension specialists can be found.

More information on rice production, including access to all publications and reports, can be found at http://www.uaex.uada.edu/rice.

Acknowledgements

We sincerely appreciate the support for this publication provided by the rice farmers of Arkansas and administered by the Arkansas Rice Research and Promotion Board.

The authors greatly appreciate the feedback and contributions of all growers, county agents, consultants, and rice industry stakeholders.