Characteristics and Production Costs of U.S. Rice Farms
34 Pages Posted: 24 Jun 2005
The average cost of producing a hundred pounds (cwt) of rice was $6.00 for U.S. producers surveyed in 2000, ranging from about $2 per cwt to more than $10. Producers in the lowest quartile of production costs averaged $3.99 per cwt compared with $8.94 for producers in the highest quartile. Regional differences in production practices, farm characteristics, and growing conditions were major influences on production costs among rice producers. More than half of the low-cost farms were located in the Arkansas Non-Delta, the largest rice region. Most high-cost farms were in California and the Gulf Coast regions. Three-quarters of rice production was concentrated on large and very large farms, categories that included nearly two-thirds of all rice farms, but the link between size of enterprise and production costs for rice is weaker than for other commodities. At the marketing-year average price of $5.61 per hundredweight, 78 percent of rice farms were able to cover operating costs and 43 percent covered both their operating and ownership costs of rice production in 2000. After accounting for Government payments, nearly all rice farms (97 percent) were able to cover operating costs in 2000, and about 84 percent were able to cover both operating and ownership costs.
Keywords: Rice, costs of production, cost variation, input use, production practices
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By Knut K. Aase