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The farm crisis is continuing to take its toll on Arkansas agriculture. Riceland Foods, Arkansas's—and indeed, the country's—largest rice cooperative, has announced that it is temporarily closing roughly a third of its rice drying facilities amid what industry leaders describe as the worst year for rice in decades.

Arkansas usually plants about 1.2 million to 1.4 million acres of rice each year. This year, however, commodity prices are so low that farmers are projected to plant as few as 800,000 acres, possibly even less.

That represents a decline of as much as 40% in rice acreage and is already affecting agricultural infrastructure throughout the state. Riceland is temporarily closing nine of its 23 rice drying facilities in Lonoke, Des Arc, Dumas, Fair Oaks, Griffithville, Knobel, Parkin, Tuckerman, and Dudley, Missouri.

"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," Ashten Adamson, Riceland vice president of marketing and communications, said. "We're weathering as best we can, trying to make plans, and this is part of the plan. And with all plans, as you know, they can change. Our team is monitoring all of those things we've discussed diligently and trying to make the best decisions as we move forward."

Riceland is not alone. One of its competitors in Arkansas, Producers Rice Mill, may also temporarily shut down two rice drying facilities. Riceland says it will continue using the affected facilities for rice storage, and Producers Rice Mill may take a similar approach.

"According to whatever the acreage is, our board will make a decision in early December whether we'll handle green rice at those two locations or use it or utilize it as rice storage," Keith Glover, president and CEO of Producers Rice Mill and chairman of USA Rice, said.

Industry leaders point to several factors driving the decline in rice acreage. In addition to difficulties securing global markets, Glover said an oversupply of Arkansas rice from recent years has depressed prices.

"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. Some of that's due to the war in Iran, where we've seen fuel and fertilizer prices go up."

Experts warn that the sharp decline in rice production could have lasting consequences for Arkansas agriculture. Reduced production could lead to permanent losses of critical infrastructure such as rice dryers, storage facilities and mills, making it more difficult to maintain the state's rice industry in the future.

"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. Like I said, in the past, whenever we've lost markets and they've been sourced by other origins, it's very difficult to get those markets back."

With domestic production falling, some buyers may increasingly look to foreign suppliers to meet demand, further threatening U.S. rice producers' market share.

An annual federal survey scheduled for release at the end of the month is expected to provide the first definitive count of how many acres of rice were planted in Arkansas this year and offer a clearer picture of the extent of the downturn.

Source : msn