(VAN) Several factors have converged to make 2025 a difficult year for rice farmers and their industry allies.
Import subsidies and record production in India are just two of the reasons rice prices have dropped so far. Photo: Brent Murphree.
As the U.S. rice harvest hits full speed in late August and early September, growers are facing the stark reality that U.S. rice prices are 37% lower than they were at the beginning of the 2024 season.
When Keith Glover, the president and CEO of Arkansas-based Producers Rice Mill, cited that number in a speech to the Little Rock Rotary Club in early August, some analysts questioned it. Glover stands by the percentage.
“I have made reference in my newsletter that if you look at May 2024, futures on the Chicago Mercantile Exchange were trading at $19 per hundredweight,” he said. “And, in May of this year, they traded as low as $12 per hundredweight. Seven divided by 19 comes out to 37%.”
Difficult year
Glover, who is also chairman of USA Rice, the organization that represents all segments of the rice industry, said in an interview that several factors have converged to make 2025 a difficult year for rice farmers and their industry allies.
One is the continued growth of India as the world’s largest rice producer and exporter because of its input subsidies, particularly in areas that haven’t traditionally produced rice.
“This past April USDA forecast their most recent crop is bigger than China’s.” Glover said. “You have to go back to the late 1940s when China wasn’t the number one rice producer in the world. That’s pretty staggering.
“In May, when we were in Washington for a fly-in, USDA told us India had set a record for its rice crop for the tenth consecutive year. And, based on their monsoons to date, people are speculating they will make another record crop this year, their eleventh record crop in a row.”
Glover said the record crops are the result of the subsidy program where the Government of India pays a “huge percentage” of their crop inputs. (India provides fertilizers at below-market prices, free or cheap electricity for irrigation pumps, subsidies that reduce water fees and support infrastructure development, low-interest loans and crop insurance, machinery and seed subsidies.)
That’s in addition to providing a Minimum Support Price or MSP, the price at which the government buys rice and other crops from farmers, insuring a minimum income for farmers and insulating them from decreases in world market prices.
India impact
India’s impact on world rice markets was demonstrated when it banned exports of certain types of rice in July 2023 when the lack of monsoon rains led to fears of food shortages.
World rice prices rose leading to the $19 per hundredweight high for Chicago rice futures in May 2024. When more favorable rainfall patterns returned last summer, the government lifted export bans on most types of rice.
Since then, world rice prices have fallen as USDA projected India’s rice exports could reach 25 million metric tons in the 2024-25 marketing year. Vietnam and Thailand, the next two largest exporters, are expected to ship around 8 million metric tons each.
“Prior to lifting their export ban, Asian rice prices were trading over $600 a metric ton,” said Glover. “Today a lot of those countries are quoting as low as $360 a metric ton. That’s roughly a 40% decline.”
Thai white rice, 5 %, which has seen the largest decline, was trading at $375 per ton in early August, according to the U.S. Rice Producers Association. Vietnamese 5 % white rice “experienced normal depreciation and is approaching $400 per metric ton. Indian rice prices fall between these at $385 per metric ton.”
“I would say a big reason for the drop in prices not only in the U.S. but around the world is due to India returning to the export market in a big way,” said Glover. “In my opinion, the level prices are being driven down to are below their cost of production. And I strongly believe they are in violation of the of the support limits they agreed to in the WTO negotiations.”
Long lines
With prices down farmers held their old crop rice this year, but long lines reportedly have been forming at grain elevators as they moved old crop rice from their bins to make way for new crop. The deliveries are exposing what one analyst called the “dark corners of old crop.
“The problem is three-fold: the first being the lack of demand on the milling side is creating a logjam for paddy deliveries,” the analyst said. “The second is loads being rejected because of bugs, and the third is loads being rejected due to quality.”
“It’s heart-breaking to see what’s happening now,” said a farm real estate agent. “It’s very surreal. Now, all crops are being produced by the world’s best farmers at a loss. It’s been bad for years, and 2026 is projected to be worse than this year.”
Keith Glover said he is thankful for the passage of H.R. 1, the Big Beautiful Bill that increases the Price Loss Coverage or PLC reference price for rice 20,7 % to $16.90 per hundredweight or $7.605 per bushel. “I am very thankful to President Trump and the Congress for passing legislation that improves the safety net,” he said. “I just want to mention we are very thankful for that.”
The payment amount will be based on rice price averages determined in October 2026 with the payments to farmers scheduled to be made in November of 2026. There has been talk of a partial payment being made, but no announcements have been made.
“At least the ag lenders know the money is coming, and, hopefully, that will give them a little better peace of mind in dealing with their borrowers,” said Glover, who worked as a certified public accountant in Grand Prairie before joining Producers.
“Last week, USDA issued their World Agricultural Supply and Demand Estimates or WASDE report,” he noted. “They are projecting ending stocks of 39.8 million hundredweight. The last time we had a carryout bigger than that was on July 31, 1985.”
Marketing loan
The 1985 farm bill, passed that year, created the marketing loan program for rice and cotton, he noted. The marketing loan allowed farmers to sell their rice for less than the loan rate and receive a loan deficiency payment for the difference. The program helped farmers move massive amounts of rice out of storage.
USA Rice is urging the Trump administration to adopt reciprocal tariffs that would charge countries exporting rice to the United States the same tariffs they levy on U.S. rice exports into their countries.
In the case of India and Thailand, which account for 80% of the 1.5 million metric tons of U.S. annual rice imports, that would be a 52% tariff on Thai imports and a 70 to 80% tariff on India’s.
“We have seen some progress in these trade negotiations,” he said, “Japan has indicated they are willing to increase their rice purchases from the U.S. by 75%. That will help the California rice industry, which is limited on how many acres of medium grain it can grow. The Mid-South could help with that in the future.”
The United Kingdom, which was buying 150,000 to 175,000 metric tons of U.S. rice in 1972, is also discussing implementing a zero tariff on U.S. rice that could help increase purchases from the 10,000 to 20,000 metric tons it now imports.
“Before I came to Producers in 1982, I was a CPA and did a lot of accounting work for farmers,” he said. “In my opinion, things are just as dire as they were back then. That’s why we are making a big pitch through USA Rice to communicate with the Trump administration on how bad it is and how we need to change things for the better.”
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