22203: Walton: RE: 22194: (Craig) NYT: The Price of Rice Soars, and Haiti's Hun ger Deepens (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: "Walton, Robert" <robert.walton3@us.army.mil>

At $37 per 110 lb sack, someone is profiteering mercilessly.

I'd also assume that in Haiti, manual labor is substituted for much of the
automated production methods used in the US.)
If there is a bright side, world rice prices have risen to the point where
it may benefit Haiti to produce rice for world as as well as internal
consumption.  Such a move would provide lower rice prices for internal
consumption while proproviding employment.

The Statistical Bulletin article below is from:
http://www.ers.usda.gov/publications/sb974-7/ , Characteristics and
Production Costs of U.S. Rice Farms by Janet Livezey and Linda Foreman
(I figure a 10% increase in today's cost of US rice production compared to
2000 is conservative since the price of fuel has risen by about 40%.  I'd
use a 22% multiplier of the 2000 figures to estimate US costs for 2004.


Worst case-  The 2004 cost of production for 100 lbs of most expensive
variety of US-grown rice should be about $12.50 USD, up from $10.

The 2004 "average"  cost of production for 100 lbs of US-grown rice should
be about $7.35 USD, up from $6.00 in 2000.


Statistical Bulletin No. (SB974-7) 34 pp, March 2004

The average cost of producing a hundred pounds (cwt) of rice was $6.00 for
U.S. producers surveyed in 2000, ranging from about $2 per cwt to more than
$10. Producers in the lowest quartile of production costs averaged $3.99 per
cwt compared with $8.94 for producers in the highest quartile. Regional
differences in production practices, farm characteristics, and growing
conditions were major influences on production costs among rice producers.
More than half of the low-cost farms were located in the Arkansas Non-Delta,
the largest rice region. Most high-cost farms were in California and the
Gulf Coast regions. Three-quarters of rice production was concentrated on
large and very large farms, categories that included nearly two-thirds of
all rice farms, but the link between size of enterprise and production costs
for rice is weaker than for other commodities. At the marketing-year average
price of $5.61 per hundredweight, 78 percent of rice farms were able to
cover operating costs and 43 percent covered both their operating and
ownership costs of rice production in 2000. After accounting for Government
payments, nearly all rice farms (97 percent) were able to cover operating
costs in 2000, and about 84 percent were able to cover both operating and
ownership costs.

Regards.

Bob Walton