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- Arkansas, the No. 1 rice-producing state in the U.S., may decrease rice acreage in favor of corn or soybeans in 2013 if prices for the latter continue to remain at or near their currently high levels.
Coats believe futures prices of the major commodities will trade in a relatively narrow channel in 2013 with corn rising as high as $8.50 on the upside and falling to as low as $6.00 on the downside.
Wheat could trade between $6.50 and $9.50, soybeans between $13.00 and $17.50 and rice between $6.30 per bushel or $14 per hundredweight and $8.78 per bushel or $19.50 per hundredweight.
While most growers seem to be favoring corn or soybeans in their current plans for 2013, Coats showed how a $1 change in the price of either commodity can have a major impact on a producer’s return to operating costs.
With corn yielding 175 bushels per acre, for example, a grower’s net return to operating costs for $6.50-per-bushel corn would be $532 per acre and for $7.50-per-bushel corn, $708 per acre. A rice farmer with a yield of 190 bushels per acre, on the other hand, could receive $678 per acre for rice sold at $6.98 per bushel and $764 for rice priced at $7.43 per bushel.
For soybeans yielding 50 bushels per acre, the return for soybeans sold at $13 per acre would be $305 per acre and for beans sold at $15.00 per bushel, the return to operating costs would be $405 per acre. For higher yielding rice – 210 bushels per acre in his example – the returns could range from $742 to $836 per acre.
Rice specialists from other states said they also expected declines in their growers’ acreages with the exception of Texas where farmers could increase their plantings from 2012’s 132,000 to 160,000 if more irrigation water is available from the Lower Colorado River Authority.
Some observers are predicting Mississippi’s rice acres could drop as low as 125,000 due to shifts in that state to corn and lower rice prices.