Competition, political unrest have made it a tough two years for California farmers
Political turbulence in Egypt and a large production of medium-grain rice in the southern United States in 2009 and 2010 are the main causes for a two-year long slump in California rice prices, according to Kirk Messick, Senior Vice President of Farmers' Rice Cooperative.
His co-op markets roughly one-fifth of California's crop.
"We've had a tough couple of years," Messick said.
Prices for the 2013 crops will be impacted by a variety of components, including what Messick called "a hangover" from over-production of med um-grain rice produced in the south, a lack of control over an Egyptian black market, and lackluster demand in Middle Eastern countries due to political turbulence.
About 40 percent of the rice that is exported from California to international markets has guaranteed buyers due to trade agreements. But finding demand for the remaining tonnage is dependent on ever-changing political environments, global weather patterns and domestic competition.
Some export markets stable
About 60 to 65 percent of the state's rice is exported, broken up into a variety of markets — including about 65 countries, Messick said.
A large chunk of that is sold to Japan, Korea and Taiwan, all of which are stable buyers.
Messick said the business in those countries is mandated by the Uruguay round of the 1995 World Trade Organization, during which those countries agreed to import an amount of rice.
Of the state rice that is exported internationally, "about 24 percent goes to Japan; Korea takes about 10 percent; Taiwan takes about 4 percent, and the balance goes to, mostly, the Middle East," he said.
Because the governments purchase the rice and often cut it with their domestically grown rice, few customers in those countries know they are consuming U.S. rice, Messick said.
And their consumption is significant to California rice growers.
"Our acreage would be 375,000 acres (as opposed to 550,000) if we didn't have that WTO agreement," Messick said.
To read more about the domestic and international markets, pick up the current edition of the Colusa County Sun-Herald for a special Farm & Rice insert.