Rice Industry Financial Situation Highlighted During House Ag Hearing

    Rice field. Photo: Horizon Ag

    The House Agriculture Committee held a hearing Wednesday focused on climate change and the upcoming 2023 Farm Bill. During the hearing, several Members highlighted the formidable economic situation on American farms given ever-increasing input costs.

    Reps. Rick Crawford (R-AR) and Julia Letlow (R-LA) homed in on the unique situation impacting the rice industry – a combination of both skyrocketing input costs and stagnant rice prices. Rice has not seen the rebound in prices other commodities have over the past two years.

    Directing a question to Dr. Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M University (AFPC), Rep. Crawford offered:

    “The Russians just announced the suspension of fertilizer exports to the west. We know that’s driving input costs. And meanwhile, India, the world’s second biggest producer of rice, wheat, and sugar is set to spend $20 billion this year to provide free fertilizer to their farmers. So, everyone here is aware of the staggering increase. And for inputs on the farm, fuel is one of them.

    “As I mentioned, fertilizer, pest control, seed machinery, I want to say that for most field crops there’s been a corresponding or even greater increase in the commodity prices…But this is not the case for rice. Prices are only slightly up, not nearly enough to cover rising input costs.

    “India is spending billions of dollars to flood the world with cheap and dirty rice while taking the lead on emissions and distorting the world rice market…I hear U.S. rice farmers are even starting to decline, maybe even go out of business. Can you comment on the situation for rice?”

    In response, Outlaw said, “among all the different types of production systems we work with, rice is the one that’s actually not doing very well and not projected to do very well over the next few years mainly because they don’t benefit from the higher prices to offset all these high costs.”

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    Rep. Letlow also questioned Outlaw on the economic situation for rice farms since AFPC published a study requested by her office:

    “I continue to hear the concerns of our farmers particularly our rice farmers about the unpredictable challenges they face with increased cost of production. Many who are considering whether to plant this year…This is a troublesome trend. With additional challenges we’re now facing globally, the situation has only gotten worse, particularly on fuel and fertilizer.

    “Your study concluded that rice farms experience the highest fertilizer cost increase, averaging $62.04 per acre, which accounts for an astronomical impact and overall input cost. What might that look like today and do you agree it is getting worse and could we quantify that?”

    Outlaw responded, “The reality is when we did that study, we had polled numbers at the end of last year and the first couple of months this year, but conditions have deteriorated even more. I would suggest that the estimates we gave you are probably 20 to 30 or maybe even a greater percent lower than they will be next time.”

    AFPC has conducted two studies relating to increased input costs, one being rice specific. According to AFPC, rice farmers will see more than $500 million in losses this year.

    USA Rice Farmers Board Chairman Kirk Satterfield sent a letter to Secretary of Agriculture Tom Vilsack on behalf of all U.S. rice farmers on February 25, outlining this situation and the need for financial assistance using existing funds available to the USDA, including those designated for market disruptions.

    The letter stated: “I am writing to respectfully request that you use the available authorities of the U.S. Department of Agriculture (USDA) to provide assistance to the nation’s rice farmers who are facing both low commodity prices and disproportionately higher input costs, creating a severe financial squeeze that threatens the continued viability of U.S. rice farms and the rural communities they support.”

    USA Rice has been communicating with Congress and the Administration on the crisis in the rice industry and will continue to advocate for much-needed assistance.

    “Since December 2021, USA Rice has been engaging with Members of Congress and their staff on the unique situation rice farmers stand to face this crop year as prices remain flat and input costs continue to rise. We appreciate Congressman Crawford and Congresswoman Letlow for their efforts to highlight the seriousness of the situation,” said Ben Mosely, USA Rice vice president of government affairs.

    “Additionally, we applaud the Members of Congress, including House Agriculture Committee Ranking Member G.T. Thompson, for their emphasis on the immediate needs farmers, and the agriculture industry as a whole, face with high input costs.”

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