Rice Sector at a Glance

Rice is the primary staple for more than half the world's population, with Asia, Sub-Saharan Africa, and South America the largest consuming regions. The main species is Oryza Sativa. It is believed to have originated in Asia from the Graminaceae (grass) family. Although rice is produced over vast areas of the world, the physical requirements for growing rice are limited to certain areas. Economically sound production typically requires high average day-time temperatures but cooler nights during the growing season, a plentiful supply of water applied in a timely fashion, a smooth land surface to facilitate uniform flooding and drainage, and a subsoil hard-pan that inhibits the percolation of water. Four major types of rice are produced and traded worldwide (see table 1 below).

Table 1: Types of rice produced worldwide
type Where it is grown Percent of global rice trade
Indica Tropical and subtropical regions 75
Aromatic (jasmine and basmati) Thailand, Vietnam, India, and Pakistan 16-18
Japonica Regions with cooler climates 5-6
Glutinous and other specialty rices Southeast Asia Approx. 2-3
Source: USDA, Economic Research Service calculations; 2018.

U.S. Rice Production

Four regions produce almost the entire U.S. rice crop:

  • Arkansas Grand Prairie;
  • Mississippi Delta, (parts of Arkansas, Mississippi, Missouri, and Louisiana);
  • Gulf Coast (Texas and Southwest Louisiana); and
  • Sacramento Valley of California.

Each of these regions generally specializes in a specific type of rice, which, in the United States, is referred to by length of grain—long, medium, and short. U.S. long-grain varieties typically cook dry and separate, while U.S. medium- and short-grain varieties are typically moist and clingy. In general, long-grain production makes accounts for more than 70 percent of U.S. rice production, medium-grain production makes up about 26 percent, and short-grain the remainder. In 2017, the United States produced 178.2 million cwt of rough rice, down 20 percent from 2016 and well below the record 243.1 million cwt harvested in 2010.

U.S. long-grain rice production is concentrated in the South (Arkansas grows approximately 57 percent of the U.S. long-grain crop.) California is the main producer of medium-grain rice, growing about 70 percent of the crop, although Arkansas grows a substantial amount of medium-grain rice, especially in years when California is experiencing drought. Louisiana typically harvests a much smaller quantity of medium-grain rice. Short-grain rice is almost exclusively grown in California. All U.S. rice is produced in irrigated fields, achieving some of the highest yields in the world. Producers in the United States can seed aerially in dry or flooded fields, or they can drill or broadcast seed into dry fields. California producers seed primarily by air directly into flooded fields. Most producers in the South drill seed. An exception is southwest Louisiana and the Texas Gulf Coast where producers seed aerially.

Marketing years vary by State, with Texas and Louisiana’s marketing years beginning July 1, Arkansas and Mississippi’s beginning August 1, Missouri’s beginning September 1, and California’s beginning October 1. Some producers in Texas and southwest Louisiana are able to reflood their fields after harvest and achieve a partial second or "ratoon" crop from the stubble of the first.

                                                                                 

 

                                                          Figure 1: U.S. Rice planting to harvest

In 1981, the United States planted the largest all rice acreage to date, more than 3.8 million acres. During the remainder of the 1980s, participation in acreage-reduction programs and typically low prices, pushed the number of planted acres down in most years. Yield per acre for long-, medium-, and short-grain rice has steadily increased since the 1970s. Yield per acre is typically higher in California than in the South, largely due to the varieties grown in each region. As a result of a severe drought and low reservoir levels in 2014, California rice plantings dropped sharply and the State’s rice area has yet to return to pre-drought levels (see the commodity focus in Rice Outlook, April 2018 for more discussion). 

U.S. Rice Exports

The United States is a consistent, reliable, and timely supplier of high-quality rice in both the long- and combined medium- and short-grain global markets. While the United States accounts for less than 2 percent of global rice production, it ships more than 6 percent of global exports and is currently the fifth or sixth largest exporter. As such, exports are important to the U.S. rice industry, with the global market accounting for about 45 percent of annual U.S. sales volume.                                        

Figure 2: U.S. Rice Export Markets, 2012/13-2016/17, average annual tonnes

Source: USDA, Economic Research Service Rice Yearbooks

U.S. rice exports include:

  • Rough (unmilled rice)
  • Parboiled rice
  • Brown rice
  • Fully milled (white) rice.

Milled rice (including brown rice) accounts for the majority of U.S. exports, followed by rough rice. Rough rice exports began a long-term increase in the mid-1990s as several countries in Latin American—primarily Mexico and most of Central America—reduced support to producers and opened their markets to imported rice. The United States initially faced little competition from other exporters in these predominately rough-rice markets. However, since 2010, South American have shipped substantial amounts of milled rice into these markets and, more recently, some South American exporters have shipped rough rice into these markets as well. Asian exporters have shipped smaller amounts of milled rice into Latin America as well.  Historically, the United States was the only major exporter that allowed rough-rice exports, although Argentina and Uruguay exported rough rice to other Mercosur countries (current full members of the Mercosur trade bloc are: Argentina, Brazil, Paraguay, and Uruguay). Demand for U.S. parboiled rice began a long-term decline in the mid-1990s. The United States also exports processed rice products, such as rice cakes, rice mixes, and cereal. However, these products remain a very small part of U.S. exports.

                                                                       Figure 3: U.S. rice exports by type, 1977/78- 2016/17

U.S. Rice Imports

U.S. rice imports have trended up sharply over the past 30 years. Most U.S. rice imports are aromatic varieties from Asia—jasmine from Thailand and basmati from India and Pakistan. In addition, China has recently shipped medium-grain rice to Puerto Rico.  Over the past 5 years, the United States has imported on average about 9 percent of its total supply of rice.  

                                                                    Figure 4: U.S. rice imports by country, 2006/07- 2016/17

                      Source: USDA, Economic Research Service Rice Yearbooks  

Marketing and Use of Rice

Five different products can be produced from rough rice: hulls, bran, brown rice, whole kernel milled rice, and brokens. Brokens are separated into two categories: second heads, which are used for flour, and brewers, which have been historically used for beer and in pet food.

The first stage of milling removes the hull, producing brown rice that can be cooked and consumed. The next stage of milling removes the bran layer, leaving whole-kernel milled white rice, but creating some broken kernels as well. Most of the bran is used in animal feed.

Prior to milling, rough rice may be parboiled, a process of soaking the rice in water and steaming it under intense pressure. Parboiling makes the rice less likely to break during milling and pushes nutrients from the bran layer into the kernel. Parboiled rice typically sells at a premium to regular milled rice.

The United States has six different grades and grade requirements for rough rice, brown rice, milled rice, second head milled rice, screenings milled rice, and brewers milled rice. In general, the requirements are based on maximum limits for seeds and heat-damaged kernels, paddy kernels, red rice and damaged kernels, and chalky kernels, as well as color requirements, requirements for well-milled kernels, and minimum milling requirements. Red rice is whole or large broken kernels of rice, where there is a substantial amount of red bran.

Care is necessary throughout the production, drying, storage, milling, and marketing phases to minimize the number of broken kernels, which sell at a considerable discount to whole-kernel rice. Virtually all U.S. rice purchased by consumers or sold to restaurants is whole-kernel milled rice. However, 15-20 percent of the U.S. crop is exported annually as rough (unmilled) rice and is eventually milled in the importing country. See U.S. Standards for Rice.

Long-term growth in rice use in the United States is partly a result of the Nation’s changing ethnic composition, with high per capita rice-consuming groups increasing their shares of the U.S. population. Rising demand for gluten-free foods, convenience, a growing population, and continued introduction of new rice-based products have also contributed to growth in domestic use. Domestic uses of rice include food for human consumption (both direct food use and processed foods), beer, and pet food. 

In most other countries, increases in rice consumption can largely be attributed to population growth, especially in countries where rice is a staple food item—primarily in Asia and much of Latin America.  In Sub-Saharan Africa, both strong population growth and rising per capita use are boosting total rice consumption.  Globally, per capita rice consumption has been decreasing because as countries have become more developed, their populations have begun to consume more meats and less staple grains.

For additional discussion, see The Rice Market in South Korea and Haiti's U.S. Rice Imports 

 

Policy

Under Title I of the Agricultural Act of 2014, the U.S. Department of Agriculture’s Farm Service Agency (FSA) operates two new crop commodity programs—Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC)—along with the already existing Marketing Assistance Loan Program, which was almost unchanged. Rice growers primarily use the PLC program.

Producers who hold base acres of rice and other covered commodities are eligible to enroll in the PLC program on a commodity-by-commodity basis.  Payments are made when market prices fall below the reference price set in the 2014 Farm Act. Reference prices for rice are as follows:

Long-grain rice                  $14.00 per hundredweight
Medium-grain (Southern) $14.00 per hundredweight
Temperate Japonica          $16.10 per hundredweight
    (California)                    (115 percent of long-grain/medium-grain rice reference price)

See more information on U.S. Farm Policy

Global Rice Production and Consumption 

Globally, the top rice-producing country is China, followed by India.

Table 2: Top 10 rice producing countries, 2012-17
Country Annual average production (1,000 tonnes)
China 144,760
India 107,246
Indonesia 36,383
Bangladesh 34,123
China 27,298
Thailand 18,196
Burma 12,153
Philippines 11,751
Brazil 8,086
Japan 7,763
Source: USDA, Foreign Agricultural Service, Production, Supply and Distribution online database.

                                                                                   Figure 5: Global rice consumption

                     Source: USDA, Foreign Agricultural Service, Production, Supply and Distribution online database

Global Trade

Since 2013, India and Thailand have been the largest global rice exporters, with increasing sales of aromatic varieties accounting for some of the growth. India’s rice exports more than doubled in 2012, after the Government of India eliminated its export ban on non-basamati rice.  Vietnam, Pakistan, the United States, and Burma are the next largest exporters, with these top six exporters accounting for more than 80 percent of global trade. In recent years, Burma, Cambodia, and China have substantially increased exports, with China returning as a major exporter in 2018. In contrast, U.S. rice exports declined from 2016 to 2018, partly due to greater competition in several markets, including Latin America.

                                                                               Figure 6: Rice exports by country, 2003-17

                                                                                  Figure 7: Share of global rice exports, 2015-17

                      Source: USDA, Economic Research Service Rice Yearbooks  

On the global import side, China and Sub-Saharan Africa account for most of the recent growth, with China the largest rice importing country and Sub-Saharan Africa the largest and fastest growing import region. The Middle East remains a large global import market, with imports trending higher and accounting for more than 70 percent of the region’s consumption. South Asia and Southeast Asia also remain important import markets, but are exhibiting no long-term expansion due to slow growth in consumption and bumper crops. South American rice imports are stagnant-to-declining, also due to slow consumption growth and near-steady production.

 

Last updated: Tuesday, August 20, 2019

For more information contact: Nathan Childs and Sharon Raszap Skorbiansky