Market Trends of North America Rice Industry
This section covers the major market trends shaping the North America Rice Market according to our research experts:
Support from Government and Other Associations
The increasing support from governmental and non-governmental organizations that are working for the betterment of the rice market is the second key factor responsible for the prosperity of the overall market in the region. Many US governments have offered support to producers through large procurement purchases, tariffs on imported rice, export incentives, and direct taxpayer subsidies based on production, prices, and historical acreage. These programs make rice one of the most heavily supported commodities in the countries, such as the United States, with ramifications for the US taxpayers and consumers and rice producers abroad.
Americans pay for the rice program three times over - as taxpayers, as consumers, and as workers. Direct taxpayer subsidies in the rice sector averaged from USD 1 billion a year from 1998 to USD 700 million annually through 2015. Similarly, Saskatchewan Crop Insurance Corporation (SCIC) has supported a wild rice crop insurance program since 2006. The coverage is based on the average production for the three wild rice-producing regions (Eastern, Central, and Western). Claims are triggered when the region reports annual production less than the average historical production, due to an insurable cause of loss, i.e., frost, wind, excessive rain, lightning, hurricane, tornado, insects, plant diseases, or hail.
The United States Dominates the Market
The United States is the major producer of rice in North America. Arkansas Grand Prairie, Mississippi Delta, Gulf Coast and Sacramento Valley of California are the major rice-producing areas in the United States. According to FAO, rice production in the United States was 10,167.0 thousand metric ton in 2016, which has increased to 10,170.0 thousand metric ton in 2018. Long grain, medium grain, and short-grain are the three major types of rice varieties produced in the country.
Increased production has paved way for higher export of rice. According to UN Comtrade, exports of husked rice by the United States were 206.3 thousand metric ton in 2016, which increased to 216.8 thousand metric ton in 2019. Korea, Taiwan, Canada, and Mexico are the major importers of rice from the United States in 2019, accounting for 57.4%, 15.0%, 13.4%, and 4.6%, respectively, in terms of volume. Promotional activities in Mexico and various international agreements between the United States and other countries, including Korea, Taiwan, and Nicaragua, were the major reasons for the boost in the export of rice in 2019. For instance, in 2019, the promotional activities and trade visits to Mexico boosted rice import from the United States by 15%.
