Economy Letter From ARGA

 Early February, farm auction sale brochures start showing up in the mail.  The famous Backgate sale is not to far away.  The auctions start after Backgate.  Some are retirement sales, some are estate sales.  The others are for some other reasons.  For now, February of 2026, 4, 5, 6 years ago, prices were good, some of the highest commodity prices in a while, it was good then.  And as usual, the roller coaster starts turning downhill.  A repeating cycle in farming life.  The downturns are the same, but for different reasons.  For a lot of farmers, 2025 saw some record crops on their farms, but can’t make a profit.  Myself and a lot of other farmers have heard that same remark.  What are some reasons for this.  Tariff wars, certain parts of the Farm Bill not being updated for the times, and not because it hasn’t been mentioned to the powers that be.  That is where we are today.  The last 3 years have been a killer for farmers, profit wise.  Stay in or get out while there is something left.  It is now a money pit, and it shouldn’t be that way.  How can a farmer keep doing that.  Well, a lot are not doing that.  Here are some more numbers that are not showing up on the radar.
    These following numbers are from the USDA, which shows the number of rice operations in each state.  I will start with the 2011 numbers, for the 6 major rice growing states, Arkansas, California, Missouri, Mississippi, Texas, and Louisiana, and the 2022 numbers to the right.  
2011 NUMBERS              2022 NUMBERS
ARKANSAS  - 2752     -     1607
LOUISANA   -  848      -      736
MISSOURI    -  435      -     248
TEXAS           -  385      -     289
MISSISSIPPI -  341      -     188
CALIFORNIA -1304     -     725
     These declining numbers are starting to look like a slight national security food risk 

     For the Arkansas numbers, that shows that on average 104 rice operations were ended each year, but  neighboring farmers taking on extra farm ground.  The years 23, 24, and 25 numbers are not available,  but using the average, that would put the rice operation number at a little under 1300, but I don’t think it would be that much, with the years of 20, 21, and 22 being of better prices.  
     But even though there were some good years, one bad year can eat up those previous profits in a hurry.  What usually happens, when prices get good, the farmer will put some of that money back into the economy, trying to update some equipment, improvements on the farm, maybe even stick a little back.  But the farmer will do their part in helping the economy.  
     Last August, the Arkansas Rice Growers Association reported what some of the banks were saying, that 30%-40% of their farmers may not be farming this year.  Subtract the 30%-40% number from the 2022 USDA number of 1607, that does not bode well for our profession.  So instead of some money being spent on rice sustainability, it should be spent on farmer sustainability.  Cause if the farmer is not around, neither will the rice.  And once again, the powers that be need to be educated about Ag.  So they understand more about what is going on, what is happening, how the farmer does what he does.  
    And now to add insult to injury, lets talk about rice.  In 2025 there were 1.25 million acres planted in Arkansas ( a round number ), and I think the crop was a little under the state record yield, if memory serves me right.  So you have a fair amount of rice to get rid of.  And I was told that Arkansas still had 9 – 10 million bushels left from the year before to get rid of ( the 2024 crop ).  So the price is not going to be very good this year again.  So Rice growers, here is your chance.  If you can, don’t plant as much rice this year, of which I know this has crossed your mind.  That is how you will get the price back up to profitable levels.  Then hopefully, you will be in control of SUPPLY AND DEMAND.  I have always wondered how the rice acreage estimate for each spring planting is always pretty close, before anything is certified.  And the rice yield number for the year is reported before all the rice is delivered to the mills.  How they come up with that number doesn’t vary much over the years.  Lets use a number from a certain year that was 166 bushels for the state yield.  Now, a lot of farmers say their rice makes 200,220 bushels an acre, if not a little more in some cases.  If they do, that’s good, because that is what it takes to help pay out.  So that is 40-60 bushels above the 166 number.  So that accounts for the top 50% of rice that is harvested.  So the bottom 50% that is harvested, should be 40-60 bushels below the 166 number, which would be, lets just use 110-120 bushels an acre.  Not many people can stay in business on the bottom 50% yields.  I’m just saying, if there is a different formula, I’d like to see it.