Recent rice and fertilizer price surges affected U.S. rice farming profitability

According to data from USDA’s Economic Research Service (ERS), recent returns from rice farming are positive, on average. From 2012 to 2022, U.S. rice farmers received a positive net return (equal to the value of production minus costs) in all years except 2016, when rice fell to its lowest price of that decade. The total gross value of producing one acre of rice increased 23 percent over that time, ranging from a low of $863.46 in 2016 to a high of $1,439.19. This was, in part, because of strengthening rice prices. Notably, rice prices surged in recent years before reaching an all-time high in 2022. Over the 2012 to 2022 period, the total cost of producing one acre of rice increased by 36 percent. Most of the increase in cost stemmed from an increase in operating costs of 62 percent, while allocated overhead costs increased 6 percent. Surging fertilizer costs, which increased by $150.75 per acre from 2020 to 2022, largely drove the increase. By contrast, allocated overhead costs—a category that includes labor costs and the opportunity cost of land—increased by $12.09 since 2020. This chart is based on data collected from the ERS Commodity Costs and Returns data product.

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