Outlook Conference Panel Discusses Steep Rise In Input Costs, Serious Challenges For '22
USA Rice
NEW ORLEANS, LA -- Among the breakout sessions at the recent USA Rice Outlook Conference was a panel on the rising cost of crop inputs.
The panel, moderated by Arkansas rice farmer Mark Isbell, was made up of Dr. Joe Outlaw, Texas A&M University economist and co-director of the Agricultural and Food Policy Center, economist Jason Troendle from The Fertilizer Institute, and Hunter Carpenter from the Agricultural Retailers Association.
Dr. Outlaw pointed to rising input costs when saying that his outlook for rice in 2022 was the worst in his 34-year career.
Rice holds the unenviable position of being the crop with the greatest amount of margin compression, mostly because it has not seen the same run up in pricing as other commodities. This is partially attributable to the fact that other major rice-producing countries (see USA Rice Daily, Oct 27, 2021 for example) enjoy substantial government subsidies for crop inputs, leaving U.S. rice at a competitive disadvantage in global trade.
The cause of the surge in fertilizer prices is multi-faceted. Contributing factors include global politics, including export bans and quotas from China and Russia and sanctions on Belarus, coupled with lingering effects of the COVID-19 pandemic, Hurricane Ida, and the February deep freeze of 2021. Rising costs of energy and challenging logistics also are having a significant impact.
Supply chain issues with other crop inputs, in addition to fertilizer, have seen substantial price increases, including crop protection materials. Farmers are encouraged to work with their local retailers on availability and price of products.
“It is clear that these issues are only going to get worse the closer we get to planting season 2022,” said Isbell. “We stand to lose family rice farms – my colleagues – and that scares me as this situation worsens, which will ultimately have negative implications not only on our industry, but in the small towns our industry supports.”
Congressional leaders have already reached out to academics and trade associations for additional information and research.
“After a productive conference, we’re back on the ground in Washington, DC, continuing to work on this issue,” said Ben Mosely, USA Rice vice president of government affairs. “We realize this is a terrible situation and USA Rice is working to advance viable solutions for rice farmers.”
Rice is primarily produced in six states, contributing more than $34 billion to the U.S. economy.