By most accounts, there is not a global shortage of rice -- just a panicked rush to buy it, which is jacking up prices.

Still, this is an "everyday person" kind of story. We may not be able to make most global economic stories connect with our readers and viewers, but we can in circumstances like this -- when the price of a common food like rice rises, when supplies get short, when Sam's Club rations rice purchases. This is a nice hook to the whole food price story. 

RECENT POSTS

I am now updating my column throughout each weekday with new resources and ideas. Check back for the latest posts, or stay informed of what's new by subscribing to the RSS feed. New since the last newsletter: Laser Eye Surgeries Slow in Slumping Economy Senate Committee Wants to Dump Cross-Ownership Rule Finally, Some Good News About Auto Sales Paint Stores Hurt in Off-Color Market Where Did Your Federal Dollars Go?

The global rice market

In Vancouver, importers are having trouble getting rice from the usual suppliers in Asia. The Globe and Mail reports:

Rice has been hit by a convergence of factors recently, including increased demand from developing countries and weakened supplies due to poor crop yields, rising input costs and limited growing areas. World rice stocks are at 20-year lows and riots have broken out in some countries where rice is a staple. While global rice production is expected to rise by nearly 2 percent this year, demand will still outstrip supply, according to the Food and Agriculture Organization of the United Nations.

Compounding the problem were recent moves by two big rice producers, India and Vietnam, to restrict exports in order to preserve ample supply at home. Thailand, the world's largest producer, has also restricted some exports, although the country's Prime Minister vowed yesterday not to cut exports or distort prices.

How America fits in, from farmers to consumers

Rice growers in places like Arkansas, Texas and Louisiana see the current situation as an opportunity.

American farmers export about half of what they grow. A large percentage of U.S.-produced rice goes to Mexico and Central America, according to the U.S. Department of Agriculture, partly due to trade agreements such as NAFTA.

Most rice grown in the U.S. comes from the Gulf Coast states and California. Hurricanes and wet weather have wrecked recent crops, but 2007 was a strong growing year (see section entitled "Projections for U.S. Rice Supply and Use"), with record yields, according to the USDA.

The USDA says, "Although the United States accounts for less than 2 percent of global production, it is currently the fourth-largest rice-exporting country." But the agency says American farmers' problem is that their production costs are so much higher than in other countries. And the strong market for corn, which is used in ethanol, makes it less attractive to grow rice.

The USDA's briefing paper says rice prices have been growing worldwide for six straight years. (The briefing paper includes projections on rice production and consumption.)

This chart shows how much rice U.S. farmers grow. The chart shows that more acres were planted with rice 10 years ago, but the amount of grain produced has actually gone up because yields have increased. The peak of rice production in the U.S., measured in acres planted, was around 1981.

The USDA says by 2017 or 2018, nearly 20 percent of the rice we consume in the United States will be imported, compared to about 2 percent in 1980.

Types of rice

You often hear the terms "long-grain" and "short-grain." You will also hear the words "rough" and "milled." Here is a rice glossary to help you understand what all of this means.

Americans love long-grains. The USDA says:

The bulk of U.S. rice imports are aromatic or fragrant rices -- primarily jasmine from Thailand and smaller amounts of basmati rice from India and Pakistan. Classified as long-grains, these specific high-quality Asian aromatic varieties have not been successfully grown in the United States. While these varieties were once sold mostly in Asian neighborhoods and in major coastal cities, they are now available in most urban areas and in ethnic restaurants across the country. U.S. plant breeders are trying to develop U.S. varieties to compete with these high-quality aromatic imports. Aromatics account for nearly all of the projected increase in imports over the next decade.

E-mail this item | Add/View Feedback (5) | QuickLink this item: A142142


Al's Morning Meeting Archive

View items published between:		and
	(MM/DD/YYYY)		(MM/DD/YYYY)

MAIN | Back to Top