NASHVILLE, TENN. (RFD NEWS) — U.S. rice acreage has dropped to its lowest level in more than five decades, prompting traders to closely monitor this year’s crop and its impact on supplies.
According to Jeremy Zwinger, CEO of The Rice Trader and Farm and Trade Inc., southern rice plantings have fallen sharply, pushing total U.S. rice acreage to its lowest level since 1972.
While California is expecting a solid crop, Zwinger says the biggest concern is long-grain rice, which is the type traded on U.S. futures markets. He notes that long-grain acreage is down significantly, creating uncertainty despite large carryover supplies from previous years.
The combination of a near-record carryover and a much smaller crop has led to increased activity in rice futures as traders weigh whether available supplies will be enough to meet demand.
Zwinger says the market is also grappling with another challenge: growing competition overseas. He notes the United States has lost significant market share in key export destinations, particularly Mexico, adding pressure to an already tight long-grain rice outlook.
Even with ample inventories entering the marketing year, analysts say the smaller crop and export competition will remain key factors influencing rice prices and market direction in the months ahead.
