The Price of Rice: Why a Good Crop Does Not Always Mean Strong Returns

ACADIA PARISH, La. — A bag of rice is one of the simplest items on a grocery list.  

For the farmer who grew it, however, the economics are anything but simple. In June, the average retail price for uncooked, white long-grain rice was about $1.09 per pound nationwide and $1.21 per pound in the South, according to the Bureau of Labor Statistics.  

USDA reported the average farm-level price for rough rice at $11.40 hundredweight in May, or about 11.4 cents per pound before the rice is dried, milled, packaged and shipped to grocery stores.  

More recent market prices have moved higher, with September rough rice contracts trading around $13.75 per hundredweight. However, futures prices and farm-level returns are not the same, as farmers may have already contracted portions of their crop and still face costs associated with production, drying and marketing.  

The comparison isn’t exact, but it highlights something many consumers don’t realize: the price paid at the grocery store is not the same amount returned to the farmer.  

Across all food purchased for use at home, USDA estimates farmers receive about 18.5 cents of every grocery dollar. The remaining value covers processing, transportation, packaging, wholesaling and retail costs.  

For Acadia Parish rice farmer Gerard Frey, the bigger concern is that the value of the crop has not kept pace with the cost of growing it.  

Frey said GX2 Farms was harvesting rice in the high 40s and low 50s in barrels per acre, with a healthy second crop expected. Those are encouraging yields, but yield alone doesn't pay the bills if prices remain low. 

LSU AgCenter planning budgets estimate many Louisiana rice farmers need roughly $11 to $12 per hundredweight just to cover production costs, depending on expenses such as land rent. USDA’s season-average price estimate for the 2025-26 marketing year was $10.40 per hundredweight, while more recent market prices have been higher. The difference highlights why timing, contracts and individual farm marketing decisions all play a role in determining a farmer’s final return.  

Every farm has different expenses, equipment and marketing strategies. But for many producers, the challenge is the same: most of the expenses are paid months before harvest, while income depends on yields and market prices that can’t be guaranteed.  

Input costs have only added to the pressure.  

USDA reports fertilizer prices paid by farmers were 22% higher in May than a year earlier, while fuel prices were up 47%. 

An LSU AgCenter analysis also showed fertilizer costs climbed sharply during planting season, increasing by as much as $83 per acre between January and April.  

Farmers pay those costs months before they know what the crop will ultimately be worth. 

Frey has seen those changes firsthand.  

When he started farming in 1979, he said his first tractor and plow together cost about $28,000. Today, he estimates a new combine and header can require an investment well above $1 million. 

Garrett Cormier became Frey’s partner this year after working full time on the farm for six years. 

Even routine repairs have become expensive, he said. The farm recently replaced a combine belt that cost about $1,000. The repair itself was only part of the expense.   

“You have a long day, you’ve got a belt break, and you go spend $1,000 on a belt just to keep your machine running,” Cormier said. “Then you go into your labor. You’ve got guys sitting on the clock, and you’ve got to pay them even though they’re waiting for you to fix it.” 

Cormier said starting a farming operation today without an existing land or equipment base would be extremely difficult.  

“With everything in the economy right now, I wouldn’t be able to do it if I didn’t have somebody like him helping me get started,” Cormier said.  

For consumers, a difficult farm economy doesn’t necessarily mean empty grocery shelves. The United States continues to produce and import rice, and USDA expects imports to increase as domestic supplies tighten.  

The bigger concern is what happens over time if several years of tight margins force farmers to reduce acreage, delay equipment purchases or leave the industry altogether.  

USDA expects U.S. rice receipts to decline by $400 million, or 12.5% in 2026 because of lower prices and fewer sales.  

Frey worries most about the next generation of farmers.  

Established operations may have land equity, equipment or other sources of income to help weather a difficult year. Younger farmers often don’t. 

“If we don’t have a correction in the market soon, I have real concerns with these young guys coming in,” Frey said. “I don’t see how they’re going to survive this thing.” 

Rice remains one of the most affordable foods families can buy. A single bag can stretch into several meals, serve as the foundation for countless Louisiana dishes and stay in the pantry for months.  

But behind every bag of rice is a farmer paying for seed, fertilizer, fuel, irrigation, labor, repairs, land and machinery long before knowing what the crop will ultimately be worth.  

“The numbers are there,” Frey said. “We just don’t have the price.”