The Coronavirus Pandemic Has Created A Major Opportunity For US Rice

“Most people don’t know that rice is grown in the United States,” says Meryl Kennedy, CEO of Kennedy Rice Mill, Founder of 4Sisters Rice and Board Member of USA Rice Federation and the USA Rice Millers Association

With three-quarters of global rice exports originating in Asia, the United States is not typically considered to be a significant “player” in the global rice trade.

But this is a false conception.

With annual production estimated at 5,864,000 metric tonnes— only about 2 per cent of world rice production— the United States is the 3^rd largest rice exporter in the world by value, contributing to about one tenth of world rice exports.

Domestically, from rice mill to plate, the total economic contribution of U.S. rice mills is estimated to be $12.83 billion in total output— and never before has there been more opportunity for growth.

COVID-19 food security concerns, global supply chain disruptions and trade barriers on Asian rice exports have created unexpected market opportunities for the global and U.S. domestic rice market, amid global supply and demand imbalances created by COVID-19.

On the demand side, importing countries are relying on rice to build their food reserves during the crisis, which has resulted in an increase in the price of rice.

On the supply side, global supply chain disruptions have caused lower production volumes and in some cases, a complete halt in exports. This is the case for India, the world’s largest rice exporter, where rice traders have stopped signing new export contracts amid lockdown-related labour and logistical issues.

In Thailand, the world’s second largest rice exporter, exports have fallen due to local increases in demand that have resulted in food hoarding and price increases. Yields have also been hit due to an ongoing drought that began in 2018. Vietnam, the fourth largest rice exporter (after the United States) has also temporarily suspended new export contracts in order to meet local demands during the pandemic, but these restrictions will be relaxed as of May.

Stories from within the United States paint a different picture, with rice growers indicating that they will expand rice plantings by 12 percent to 2.85 million acres, with higher numbers reported over last year across all states. And with export disruptions in Asia, price quotes from the United States are the highest that they have been in 7 years, according to April reports from the USDA.

With about half of annual sales volumes generated by exports, Kennedy believes “there is enough rice available In the United States to meet both export and local demand”.

In cities such as Sacramento California, for example, rice farmers are experiencing weather that is more favourable and cooperative than it has been in years, allowing for more rice acreage than expected. Rice farms and mills have been designated essential services and work is ongoing, amid strict social distancing, food safety and sanitary protocols.

“We need to keep them safe,” says Kennedy of the infrastructure that has been put in place to safeguard rice farmers and workers during the coronavirus pandemic. “We consider these people to be heroes… We are giving bonus pay to those on the front lines and we are distributing rice to our staff.”

U.S. rice farmers are currently in the midst of planting season, which extends to the end of May. Production targets have increased, including among aromatic varieties similar to those typically imported from Asia. Never has there been more of a reason for U.S. consumers to support local farmers.

“I speak for us as a company and for the entire rice industry, that we will continue to step up to meet the increase in demand,” says Kennedy, of food security concerns created by the pandemic.

The United Nations’ World Food Programme’s Executive Director, David Beasley, recently reported that the pandemic will push 130 million people “to the brink of starvation,” which has elevated the importance of rice as a global food source.

Kennedy believes that rice is the answer to COVID-19 related food insecurity.“Rice is the primary staple for more than half of the world’s population, playing a major role during periods of heightened food insecurity and uncertainty. This is the type of staple that people need during this crisis,” she says.

“Many players within the US rice industry are giving donations to local charities and food banks, to support those who are food insecure,” says Kennedy. “I’ve never been more proud to be in the rice industry.”