Nine Riceland facilities temporarily close
A temporary closure at nine Riceland Foods’ rice drying facilities across eastern and southeastern Arkansas is highlighting the growing economic challenges facing the industry as a sharp decline in rice acreage forces the nation’s largest rice cooperative to scale back operations.
Riceland Foods announced late last week it will temporarily close nine of its 23 rice drying facilities this harvest season, citing rice acreage levels not seen since the 1970s. The facilities are in Lonoke, Des Arc, Dumas, Fair Oaks, Griffithville, Knobel, Parkin, Tuckerman and Dudley, Mo.
Rice production has long served as a cornerstone of the local economies in these communities, supporting farmers, truckers, equipment operators, seasonal workers and businesses that rely on harvest-related activity.
“Since rice acres have fallen to levels we haven’t seen since the 1970s, we’ve been forced to temporarily close a portion of our dryer network,” Riceland Vice President of Marketing and Communications Ashten Adamson said. “We’re weathering as best we can, trying to make plans, and this is part of the plan.”
Arkansas typically plants between 1.2 million and 1.4 million acres of rice annually. This year, however, industry leaders project acreage could fall to as little as 800,000 acres, a reduction approaching 40 percent.
The dramatic decline is being blamed on a combination of historically low rice prices, rising production costs and challenges in global markets.
Keith Glover, president and chief executive officer of Producers Rice Mill and chairman of USA Rice, said an oversupply created by strong harvests during the past two years has helped drive prices downward while fuel and fertilizer costs continue to rise.
“You got two things working against the acreage,” Glover said. “Number one, because we’ve had two fairly good crops the last two years, the price of U.S. rice futures are low historically. And then the second thing, we’ve seen a dramatic increase in input costs.”
While Riceland plans to continue using the affected facilities for storage, the reduction in drying operations raises concerns about the long-term health of agricultural infrastructure throughout the state’s rice-growing regions.
Industry leaders warn that prolonged economic pressure could threaten facilities that are essential to Arkansas agriculture.
“The loss of the infrastructure, if dryers or storage facilities are not able to weather the storm, that could be a permanent impact,” Glover said. “But also another permanent impact could be the loss of some traditional U.S. markets.”
The announcement comes as another major Arkansas rice cooperative, Producers Rice Mill, considers temporarily idling two drying facilities of its own, depending on final acreage figures and harvest projections.
Although Riceland officials have described the closures as temporary, the move serves as a stark reminder of the financial pressures facing Arkansas farmers and the rural communities that depend on them.
A federal acreage report expected later this month is anticipated to provide the first definitive count of rice acres planted statewide and a clearer picture of the extent of the downturn impacting Arkansas’ largest agricultural commodity.
Editor’s note: This story appears courtesy of our content partnership with The Pine Bluff Commercial.