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| Directions l American Farm Bureau l Farm Bureau Bank l Privacy Policy l Contact Us l Help l Site Map |
The Voice of Louisiana Agriculture
Welcome to the Louisiana Farm Bureau Federation
| Directions l American Farm Bureau l Farm Bureau Bank l Privacy Policy l Contact Us l Help l Site Map |
Welcome to the Louisiana Farm Bureau Federation
Welcome to the Louisiana Farm Bureau Federation
The Voice of Louisiana Agriculture
NEW ORLEANS – Gene Martin wasn’t sure if “perfect storm” was appropriate to describe the many factors
affecting the grain markets right now, but with no single factor standing out it’s hard to find a better term.
Martin, the senior marketing specialist with the Arkansas Farm Bureau, addressed the Rice Commodity
Conference here at the 86th annual convention of the Louisiana Farm Bureau. He said with all due
respect to a city where hurricanes are still fresh on the minds of many, the turbulent and multifaceted
nature of the commodity markets right now makes it an apt metaphor.
“I probably shouldn’t call it a prefect storm here, but that’s what it is,” he said. “I can list more than 10
things that are impacting rice prices right now and that’s still probably not all of them. They all seem to be
coming at the same time.”
Martin specifically mentioned the recent scare of rice supplies running scarce, driving many to clear store
shelves of rice here in the U.S. In some places overseas, however, there were even more dramatic
measures.
“Vietnam and India both shut down their export markets for awhile, and Vietnam is only just now reopening
their markets,” he said. “The interesting thing is for the first time in years you have a stocks-to-use
ratio that favored supply. However with demand surging and consumption much higher in China and
India, we’ve seen a lot of rice moving.”
The weak dollar, surging demand in other grains, weather and speculative buying in index funds have also
fueled the storm, Martin said. In particular, another food grain, wheat, has been surging for many of the
same reasons and in turn, has also helped drive rice prices to record levels.
“We’ve seen highs this year near $25 per hundredweight, and while I don’t think we’ll see that again, it
looks like we’ll stay in the $18 to $21 range,” he continued. “I think we will see slightly smaller plantings
nationally than the last estimate when harvest comes in, but I think we’ll break 200 million hundredweights
by the time it’s all said and done.”
Martin said rice would not escape the perfect storm for planted acreage in 2009, as elevated grain prices
keep competition fierce between all farm commodities. Furthermore, he said, farmers should expect more
financial burden in the form of risk.
“You’re not going to see as much credit available as this past year, after many mills couldn’t meet the
margin calls we saw,” Martin said. “Creditors will be less willing to undertake the risks for hedge-to-arrive
contracts, so farmers will likely have to handle that themselves.”
affecting the grain markets right now, but with no single factor standing out it’s hard to find a better term.
Martin, the senior marketing specialist with the Arkansas Farm Bureau, addressed the Rice Commodity
Conference here at the 86th annual convention of the Louisiana Farm Bureau. He said with all due
respect to a city where hurricanes are still fresh on the minds of many, the turbulent and multifaceted
nature of the commodity markets right now makes it an apt metaphor.
“I probably shouldn’t call it a prefect storm here, but that’s what it is,” he said. “I can list more than 10
things that are impacting rice prices right now and that’s still probably not all of them. They all seem to be
coming at the same time.”
Martin specifically mentioned the recent scare of rice supplies running scarce, driving many to clear store
shelves of rice here in the U.S. In some places overseas, however, there were even more dramatic
measures.
“Vietnam and India both shut down their export markets for awhile, and Vietnam is only just now reopening
their markets,” he said. “The interesting thing is for the first time in years you have a stocks-to-use
ratio that favored supply. However with demand surging and consumption much higher in China and
India, we’ve seen a lot of rice moving.”
The weak dollar, surging demand in other grains, weather and speculative buying in index funds have also
fueled the storm, Martin said. In particular, another food grain, wheat, has been surging for many of the
same reasons and in turn, has also helped drive rice prices to record levels.
“We’ve seen highs this year near $25 per hundredweight, and while I don’t think we’ll see that again, it
looks like we’ll stay in the $18 to $21 range,” he continued. “I think we will see slightly smaller plantings
nationally than the last estimate when harvest comes in, but I think we’ll break 200 million hundredweights
by the time it’s all said and done.”
Martin said rice would not escape the perfect storm for planted acreage in 2009, as elevated grain prices
keep competition fierce between all farm commodities. Furthermore, he said, farmers should expect more
financial burden in the form of risk.
“You’re not going to see as much credit available as this past year, after many mills couldn’t meet the
margin calls we saw,” Martin said. “Creditors will be less willing to undertake the risks for hedge-to-arrive
contracts, so farmers will likely have to handle that themselves.”
Rice’s ‘Perfect Storm’ Both Blessing, Curse For Producers
By NEIL MELANCON
FB News Contributing Writer
FB News Contributing Writer
