Rice, It Is The Best Of Times And The Worst Of Times
RICHARD E. HICKS
OCEAN SPRINGS, MISSISSIPPI
If I may be so bold to paraphrase Dickens rice farming today can be at the least challenging and best a daunting challenge. I am not referring to the growing aspects of growing rice I will put our producers up against any the world and go one better, our growers are the best on the planet. I have yet to see one of our farmers knee deep in water planting seedlings by hand. I do not say this with malice I am simply stating a fact. Our challenge does not come on the production end but rather comes on the “doing it” and showing a profit. Which as many, if not all producers face this very same struggle. I will, however, point out to a fact I believe to be not necessarily unique to rice producers but a fact that is well known to many American producers. The rice boys are playing against a very heavily stacked deck. We will for this treatise, ignore some obvious facts, cost of money, land, equipment, labor and the list goes on. We will focus on the external factors which I truly believe are the reason our rice growers are thrown into the belly of the beast. These factors are man-made generated by foreign entities that are in many cases not only downright hostile to the US but, in my opinion, intentionally trying to put us out of the rice game entirely. I realize that may be a bit harsh but I believe it is a fact. Let us look at the numbers. Global sales for imported rice was worth about $40 billion in 2024. Indonesia had the highest dollar value of imported rice last year. Can you take a guess the country that is not in the top 13 exporters? if you guess the US you win the prize. And guess who was a top tier increased exporter? Did you guess China? If you did, give yourself a cigar. Moving right along to the Philippines. You know the country where thousands of lives were lost during WW 2 Sorry, but I am biased about this one my pop was in the Pacific at that time. The right set of circumstances and I would not be writing this today. Time to guess another top tier winner in the export game. This should be easy. That is right China. It appears you can geopolitically and militarily intimidate a country and they will reward you with a big increase in business. Now, the next country with a large increase, Saudi Arabia. At least we were in the top tier in 2024 plus 37%. I guess all of those years protecting them from Iraq paid off. Finally imports into the US. Before we start if someone can explain why we import rice, let me know. I really need help with this one. Near the top of the heap again, China up 25% Mexico plus 560% India up 12%. I realize most of the top tier countries are located in Asia and this helps in greatly reduced shipping rates, but most of the countries that are large importers have greatly benefited from at least a working relationship with the US. You would think they could at the least throw us a bone, from time to time. I believe the next set of problems could be cultural bias, distrust, dislike take your pick. Then we have the hated word, tariffs. For decades countries have been taking advantage of good old Uncle Sap. We buy their goods with low tariffs and they reward us by making trade almost punitive. A bit off the subject but go abroad and try to find an American car. You might as well be looking for hens teeth. We allow imports of European cars at a fraction of the freight they charge us for an import. The same fact is true of many countries with import tariffs on rice. I saw this number a while back. I cannot verify it but I seem to recall some country has an 80% import tariff on our rice. This fact has been debated time and time again but a fair and even trade policy would benefit every producer across the spectrum. I have no hope that this will a happen. So, think about it we have significantly higher cost of production that are constantly increasing. We are totally mechanized with high priced equipment trying to compete with a huge grower population, as stated earlier, standing knee deep in water next to a water buffalo. Punitive tariffs, imports for god knows why and domestic trade policies designed to raise the standard of living for everyone except US citizens. And yet we soldier on with two hands tied behind our backs. In my mind, the outlook is the same as I wrote about several weeks back. There is a disconnect between the economy and agricultural prices. Go price a battery, tire, or bag of chips compared to a few years back. The increase is outrageous. Regrettably, I am old enough to recall a five-cent candy bar. I believe at some point in time ag prices will have to play catch up. The old saying a rising tide takes all the boats sometimes does not happen as fast as we would like. Until then we simply plod forward. In conclusion, in the beginning I titled this piece the best of times and the worst of times. Well, I have given you the worst now I will give you the best. Unless you are a Red Chinese analyst you are reading this sitting in the greatest place on earth. In the greatest country the world has even seen.
RICHARD HICKS IS THE MANAGING DIRECTOR OF THE R.E. HICKS GROUP LLC AN NFA REGISTERED INDEPENDENT IB.
I can be reached at 618-301-2244, 618-363-0252 sat phone 1-254-219-7336.
Note: Past Performance Is Not Indicative Of Future Results.