Farmers getting record price for rice

The price of rice is selling at an all-time high, which is good news for Vermilion Parish farmers.

The July Future’s Market Price for rice was selling for $32.58 per barrel as of Monday, which is twice as much at what it sold for last year. The average market price last year was $16.52 per barrel.

“That is the highest it has been since I can remember,” said Howard Cormier of the LSU Ag Center. “The price is holding, and it is continuing to go up. That is telling everyone that the market is strong and there is a demand for rice.”

The last time rice sold for this high was back in 1973 when it reached $30 per barrel for only a short time. That same year, rice averaged $17.50 per barrel.

That year, the price began to rise back in the summer. In July rice was selling for $20 per barrel.

The reason for high prices is because of supply and demand.

Cormier said there is a world wide fear of a food shortage, which is driving up the price. “The future looks like there will be a great demand for rice,” he said.

That is good news to Vermilion Parish farmers.

“Even with high equipment costs, he has a better chance of making a profit than he had the last couple of decades,” Cormier said. “However, the optimism is being tempered with the high cost of farming.”

Many farmers have sold off their equipment and elected not to plant altogether, while others are planting less acres because of the high cost of farming.

The loss of farmers is evident in the number of acres planted in Vermilion Parish.

In 2007, there were 48,700 acres of rice planted in Vermilion Parish, which was second lowest in 57 years. In 2006, because of Hurricane Rita’s storm surge, only 33,500 acres were planted - the lowest ever.

Cormier predicts 55,000 acres were planted this year - which is still the third fewest. Before the hurricane, there was an average of 75,000 acres planted over the last six years. In 1998, 101,000 acres of rice were planted.

David Lacour and his father Francis farm 900 acres of rice in the Esther area. David said the high price has come at a good time.

“It is about time,” said David. “We have been farming for marginal prices.”

David is counting on the prices remaining high because of the world shortage of food.

If the prices remain high, look for farmers to invest in new equipment. “It is time to replace old stuff,” David said.

David said, while the price is high today, back in 1973 when it reached $30 per barrel, things were a lot different. Diesel was only selling for 50 cents per gallon, while fertilizer was $100 per ton. Today, diesel is $3.80 per gallon and fertilizer is selling for $800 per ton.

Many parish farmers are holding out for higher prices. David said he still has 2/3 of his 2007 crop not sold as he was holding out for a higher price.

While the selling price has doubled, the consumer has yet to see a big increase in the price in the supermarket. That could be because the marketers of rice who buy rice from rice mills are trying to purchase rice at a bargain price despite the higher price.

Ed Gaspard, general manager of Planters Rice Mill (old Riviana Rice Mill in Abbeville) said his mill is no busier than it was when the price was cheaper a year ago.

“We have to buy the rice from the farmer which is expensive,” Gaspard said. “We have to sell the rice, so naturally you as a consumer don’t want to pay for it. What happens to the mill is that we get squeezed. The people I am selling to don’t want to pay the (higher) price, but I have to pay it to the farmer. Who I sell it to wants it as cheap as possible and the farmer wants it as high as possible and I have to make a profit in between.”

Gaspard said if the mill predicts the market right, the mill will make the same amount of money per barrel despite the price.

“Everyone thinks the mill is making a lot of money because the price went up, but the mill does not make that much money,” Gaspard said.

He predicts rice will stay at this price for a while though he does not see it getting too much higher.

“The farmers are optimisticly cautious,” Gaspard said. “They are happy but they are still cautious.”