Last Modified: Tuesday, January 08, 2013 7:08 PM
WELSH — Despite uncertainty surrounding federal farm legislation, agricultural economists are optimistic about the market outlook for rice and soybeans with higher prices and more varieties expected.
That was the message given to more than 50 Southwest Louisiana rice and soybean growers attending an agriculture forum Tuesday in Welsh.
“Rice prices look like they are holding steady and may even raise a little bit before the end of the marketing year in August,” LSU AgCenter economist Mike Salassi said.
The market average is $14.50 to $15 a hundredweight for rice, Salassi said. Soybean prices likely reached their peak at $13 to $15 in December and will decline, he said.
There is more rice in the supply market, but a lot of the rice is moving, Salassi said. The U.S. Department of Agriculture estimates that both domestic use and export of the crop are at higher levels than in the previous year, he said.
“They are estimating we are going to end this year in the summer with less rice carried over in terms of total volume as well as percent of use,” he said. “These are the numbers the market looks at to determine where prices are going to go.”
Soybean acreage was also up in the U.S. last year but because of the drought, the average yield was down, Salassi said. Despite the drop in supply, the demand for soybeans remained constant, he said.
Rice and soybean prices, which are dependent on supply and demand, have been rising the last few years but could become “more stable” as farmers plant fewer crops and report less yields due to anticipated changes in the farm bill, Salassi said.
“The demand for commodities really doesn’t change much, but the acreage and yield affects the prices,” he said.
Salassi said that if Congress passes a new farm bill with the options representatives have been looking at, it will greatly affect program payments to farmers, especially rice growers.
“Out of all of the commodities, rice is probably going to be the most negatively impacted because their payments are going to be reduced,” he said.
The current farm bill expired Dec. 31, but has been extended for nine months, Salassi said.
Agricultural leaders in Congress are deadlocked on two major issues — cuts in crop subsidies, including crop insurance, and reduction in food stamps, he said.
“The inability of Congress to pass something is really causing a problem with growers across the country in making some plans for this year and next,” he said.
Rice specialist Johnny Saichuk said the LSU Rice Research Station in Crowley is continuing preliminary testing and work on new Clearfield rice varieties and experimental hybrids. Many of those varieties will have good yield potentials and tolerance to blast, chalk and other diseases that have affected crops in the past, he said.
“We have learned some varieties were more accessible than anticipated and others had higher levels of resistance than we anticipated,” he said.
The research station will continue experimenting with the Clearfield 111 variety, which was popular last year because it had good grain quality, Saichuk said. Research will also continue on Clearfield 151 and Jazzman varieties.