Today, quality has got to come back into the discussion across
all segments of the U.S. rice industry. We are seeing a higher
demand for quality rice from our customers and have to strike a
balance between a farmer’s goal for higher field yields and the
market’s desire for higher quality rice. A variety has to perform
well for the farmer or he won’t grow it, and rice has to meet the
standards of our markets or they won’t buy it. For example,
Kellogg’s® uses medium grain in its Rice Krispies® products, and
chalk is a problem. At Louisiana Rice Mill, we grade Kellogg’s rice
at a different chalk level than other rice coming in here. Kellogg’s
is looking for consistent quality, consistent characteristics and
stability in the variety being grown for a while.
DIFFERENTIATE ON PRICE
In determining premium varieties, the expectation is 80 percent
of the rice bought from that particular variety is going to be high
quality. For the varieties that offer this stability in quality versus a
lower quality variety, where 50 percent or less is considered high quality, we’re going to differentiate on price. When a farmer
decides to plant a premium variety that might have a little bit
lower yield potential, he can count on a higher price and potentially
getting contract plus instead of contract minus. At the end of
the day when a farmer has good quality rice and sells it for contract
plus, he feels good about it. These farmers work hard, and
they take pride in producing a high-quality product.
CONSISTENT QUALITY DRIVES MARKETS
If a variety has good yield potential, good milling quality and
you can count on it being consistent year in and year out, then
we want you to get a higher price. When you are in the market,
there should be higher demand for those varieties. High-quality
rice is much easier to sell and move. Consistency in grain quality
means more consistent markets.
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