Over 250 members attended the 81st Annual Membership Meeting of Producers Rice Mill, Inc., held at noon on Nov. 7 at the Grand Prairie Center in Stuttgart. A catfish lunch prepared by Yoder Ruritan Club was enjoyed.
The public portion of the meeting featured a vocal performance by Miss Arkansas 2024, Camille Cathey, as well as a guest speaker, Randy Fraizer.
Following the public session, a business meeting for members was held. Keith Glover, President & CEO of Producers, began his report on the 2023-24 marketing year. Glover noted that, for the first time in several years, the economics in early 2023 favored growing rice over alternative crops. As a result, rice acres in the mid-south increased by 31 percent in 2023. Despite the substantial increase, mid-south field yields were higher than the previous year. According to USDA, Arkansas’ 2023 rice field yields averaged 168 dry bushels per acre, up 3 bushels per acre from the 2022 crop.
The biggest disappointment of the 2023 rice crop was the whole kernel milling yields. Excessive dry heat in July and August negatively impacted the milling yields. For the 2023 crop, long grain averaged 50 pounds per cwt. for whole kernels, which was 4 pounds per cwt. lower than the previous year. The 2023 mid-south rice crop was the worst milling crop since the challenging 2010 season. Overall receipts from members during 2023-24 totaled 56,487,973 bushels, up 28 percent from the previous crop year.
For the 2023-24 marketing year, U.S. long grain exports increased by 79 percent, largely due to a 155 percent increase in rough rice exports. Producers’ eligible long grain seasonal pool on a 50/69 milling yield basis averaged $7.21 per bushel, and $7.49 on the Chicago Board’s standard milling yield of a 55/70. The USDA’s national average farm price for long grain was $7.15½ per bushel. This marked the 35th consecutive year that Producers’ long grain seasonal pool exceeded the USDA national average. Producers’ medium grain pool averaged $8.77 per bushel, surpassing the USDA national average for southern medium grain by $1.03 per bushel.
In 2023-24, the mills processed a total of 59.1 million bushels, a decrease of 1.8 million bushels from the previous year. A pause in U.S. rice sales to Iraq and extreme gang violence in Haiti during the second half of the marketing year caused rough rice millings to slow dramatically from the first half’s pace. Total revenue for the year was $651 million, down $5 million from the previous year, due to lower millings and average rice prices.
Financially, Producers’ working capital at year-end was $60.8 million, an increase of $6.3 million. Members’ equity redeemed during the year was a record $7,888,862. Despite this record redemption, overall members’ equity at year-end also stood at a record $186.2 million.
Glover then discussed the new 2024-25 marketing year. For the second consecutive year, rice prices at the start of the 2024 calendar year remained strong compared to declining commodity prices for alternative crops, resulting in an additional increase in mid-south rice acres in 2024. USDA is currently projecting Arkansas’ 2024 rice field yields at 169 dry bushels per acre, one bushel higher than the 2023 rice crop. In Mississippi, USDA estimates a state field yield average of 167 dry bushels per acre, also one bushel higher than last year. Based on preliminary data, Producers anticipates USDA’s current estimates for Arkansas and Mississippi could increase by 1 or 2 bushels per acre in the final yield figures.
The biggest disappointment of the 2024 rice crop, for the second year in a row, has been the milling yields. However, other quality characteristics, such as chalk and peck damage, were not significantly affected. The 2024 rice harvest was among the earliest and fastest in Producers’ history. Due to another large acreage and good yields, truck lines were long at all of Producers’ facilities, with the Stuttgart drying facility starting each day between August 20 and August 30 with 61 to 72 lines of loaded green rice trucks. For comparison, the highest truck line count in 2023 was 50 lines.
Regarding the 2024-25 rice market, Glover identified the size of the crop as the most important market factor for the new marketing year. Currently, USDA estimates the 2024 U.S. long grain crop at 166.8 million cwts., up 12.9 million cwts. (or 8 percent) from the previous year. The next critical factor is export demand. Due to the larger crop, U.S. rice prices have thus far traded below 2023-24 prices. With South American export prices at the highest in the Western Hemisphere, U.S. long grain export sales have been outpacing last year’s rates. USA Rice recently announced a new sale to Iraq of 44,000 metric tons of U.S. long grain milled rice.
Additionally, extreme flooding during South America’s last harvest in April has left little to no exportable supply of rice in that region, providing the U.S. a four- to five-month window until South America’s next crop begins in March 2025. India’s September 27 lifting of its one-year export ban on non-basmati milled rice, however, is expected to influence the global rice market, applying downward pressure on Asian milled rice prices during the 2024-25 crop year.
In other significant news, Glover updated members on Producers’ solar power plant. In December 2023, Producers’ 20-megawatt AC solar farm, including a microgrid and 40-megawatt-hour battery storage system, was commissioned. This combination of solar farm, battery storage, and microgrid is the largest of its kind for a non-utility in the U.S. The solar farm is projected to provide two-thirds of the electricity needed for Producers’ Stuttgart milling complex, with a projected net electricity savings of over $100 million in the first 35 years.
In closing, Glover acknowledged that 2024-25 would be another challenging year. He expressed confidence that with its facilities and team, Producers is well-positioned to address the tasks ahead. He thanked Producers’ employees and members for their continued support.
In the business session following the annual meeting, Jay Coker, Brooks Davis, Stephen Hoskyn, Steve Orlicek, and Sloan Hampton were elected to three-year terms on the board of directors. At the board meeting, Jay Coker was reelected as chairman, and Gary Wilks was reelected as vice president and vice chairman of the board. Other officers elected included Keith Glover as president and general manager, Kent Lockwood as treasurer, and Lana Roth as secretary.
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