Texas rice farmers hope for increased trade opportunities
New deal with China could boost prices significantly, they say.
Ray Stoesser rumbled around his quiet green fields in a mud-caked SUV, noting the slight gradations of the land, which is subtly terraced to allow water to flow downhill, irrigating the fields in slow succession.
“We’re going uphill, believe it or not,” Stoesser said.
After more than a half-century of farming, he knows what each field needs and when, harvest after harvest.
“Just like taking care of your backyard,” he said.
Though Stoesser’s land hasn’t changed, the economic conditions have. Rice prices have declined for several years, averaging about 10 cents a pound last year, because of competition from huge rice producers such as Vietnam and Thailand, as well as increases in agricultural productivity that have boosted supplies. Over the past few decades, hundreds of rice farmers in Southeast Texas have given up the crop entirely.
But in mid-July, the Texas rice industry — which is worth about $100 million per year to farmers — was granted a reprieve: a deal to allow U.S. rice sales to China. The industry estimates that China soon could buy 250,000 tons of U.S. rice per year, out of the 9 million tons it produces, which could boost prices significantly.
Although trade between the two countries liberalized when China entered the World Trade Organization in 2001, trade in rice remained off the table. An agreement to allow exports has been in the making for nearly a decade, with talks begun by George W. Bush, continued under Barack Obama and ultimately concluded under President Donald Trump. The deal sets complex safety standards to prevent pests from entering China with rice imported from America, which, if met, would open a market of more than 1 billion rice eaters to U.S. farmers.
For the Stoesser farm, selling to China could mean a slightly bigger financial cushion in a business that can see a year’s income decimated by floods or drought or both.
“If we could get to 16 cents instead of 10 cents a pound, it would take a lot of risk out,” Stoesser said. “Trade is the answer to our problems.”
The last few decades have left the Stoessers feeling isolated.
The flat, humid counties east of Houston used to be full of rice fields — in 1968, 70 square miles of Liberty County were planted with the crop. Growing up in the area, Ray’s son Neal always saw the rice business as his future, and he didn’t finish college.
The Stoessers have owned land since Neal’s great-grandfather arrived from Germany in the late 1800s, and Neal has been driving a combine since he was old enough to climb up into the cab, as his 8- and 4-year-old sons do now. Over that time, the Stoesser farm has grown to cover several thousand acres as the family bought out surrounding farms.
The rest of Texas’ rice industry, however, has shrunk to 187,000 acres from more than 600,000 in the 1950s. In Liberty County, the 70 square miles of rice fields have shrunk to 8.
“I hate to say it, but when I was in high school, there were 70 farmers,” Neal said. Now there are just three in Liberty County — Neal, his father and his brother, Grant.
Several factors led to the decline, including the encroachment of suburban housing developments, which raised land prices to the point where it made more sense to sell than keep farming. Today, Texas accounts for about 6 percent of U.S. rice production, far behind the leader, Arkansas, which accounts for about half.
But Texas rice farmers have a few things working in their favor. New seed varieties allowed them to nearly double the yield per acre, with the assistance of experts from Texas A&M’s field offices. And federal crop subsidy programs have kept them afloat through thin years, paying out $1.8 billion to them between 1995 and 2014.
Meanwhile, the rice industry has tried to expand its market by boosting Americans’ consumption. Stoesser runs the Texas Rice Council, which collects payments from the state’s rice farmers for joint marketing efforts, such as one that produced a bumper sticker on his Yukon SUV. “Eat Rice,” it reads. “Potatoes make your butt big.”
In one regard, they’ve made progress. Americans now eat 26 pounds of rice per year on average, nearly triple their consumption in the 1970s. But that increase is driven largely by immigrant communities that favor jasmine and basmati varieties, mostly imported from Thailand, India and Pakistan, over American medium and long grain rice.
For decades, in the name of national security, China maintained a goal of producing 95 percent of its grain domestically. Around 2012, rocked by food safety scandals, the nation backed off that target, allowing it to slip to 85 percent. The U.S. went from exporting about $100 million in grain and feed in 2007 to a peak of $4.9 billion in 2015.
The Rice Producers Association, of which Stoesser is a member, wasn’t the only group working for market access — the USA Rice Federation, a coalition of farmers and millers, was sponsoring exchanges as well. Rice mills remove the tough husk from rice grains to make it edible.
The millers were particularly keen on the Chinese market, since all the rice going there would be milled in the U.S., in contrast to the largely unmilled “rough” rice that goes to Mexico and South America.
Two years ago, USA Rice’s executive director, Betsy Ward, said she thought U.S. negotiators had a deal with China. But they could never get it signed by the Chinese, which Ward thinks may have had to do with the Obama administration having other trade priorities — such as the massive Trans Pacific Partnership, which pointedly didn’t include China.
After Trump’s agriculture secretary, Sonny Perdue, took office, Ward said her group met with him four times about getting the rice agreement done. Only a few weeks after Perdue visited China to celebrate a deal allowing exports of beef, the rice deal finally was signed.