A new UC Cooperative Extension study estimates the cost of production and possible returns to farmers for growing rice in the Sacramento Valley.
Besides using the sale of rice on the open market to determine returns, the government programs “Direct Payments” and “Counter-Cyclical Payments” are included as additional income. The “Marketing Loan Gains” and “Loan Deficiency Payment” programs are also discussed, but not included as part of the returns.
The study is based upon a hypothetical 700-acre rice farm using practices common in the region. The study looks at production with rice only in the rotation. Straw management options are also listed in the study. To accurately predict possible costs, the economists considered 20 percent of the stubble as being burned while the remaining acreage would be flooded and rolled.
Assumptions used to identify current costs for rice production operations, material inputs, cash and non-cash overhead are described in the study. Tables show production costs, profits over a range of prices and yields, monthly cash costs, hourly equipment costs, and the whole farm annual equipment, investment and business overhead costs. The study is intended as a guide only and can be used to make production decisions, determine potential returns, prepare budgets and evaluate production loans.
The study was produced by Randall G. Mutters, UCCE farm advisor, Butte, Sutter and Yuba counties; Christopher Greer, UCCE farm advisor, Colusa and Yolo counties; Karen M. Klonsky, UCCE specialist, Department of Agricultural and Resource Economics, UC Davis; and Pete Livingston, UCCE staff research associate, Department of Agricultural and Resource Economics, UC Davis. UCCE farm advisors, researchers, growers, equipment and chemical suppliers, and other agricultural associates provided input and reviews.
The study — Sample Costs to Produce Rice in the Sacramento Valley, Rice Only Rotation — is available online at http://coststudies.ucdavis.edu, from the Department of Agricultural and Resource Economics, University of California, One Shields Avenue, Davis, CA 95616 and from local UC Cooperative Extension offices.