Heading out of Stuttgart, Jay Coker drives through the heart of Arkansas rice country, as he surveys the land around Lodge Corner, where his farmland is located.
He grows contemplative about the present and future of the rice industry.
A Grand Prairie native, Coker took an unorthodox path in life. Instead of going into the family pharmacy business on his father’s side, he struck out on his own, embracing the farming tradition of his maternal side of the family. In the process, he became a leader in the agricultural industry as both a farmer and as a chairman of the Producers Rice Mill board of directors. His dual role has given him a unique perspective on on the evolution of Arkansas’ rice industry.
Coker’s farm might be “in the middle of nowhere,” but the rice he produces is a global product — a fact that has a daily impact on how he runs his business. Coker farms approximately 7,500 acres in south Arkansas. Rice makes up more than half of his acreage; the rest is soybeans and corn.
“Rice is a global grain. Some people say it’s the most important grain in the world. It’s grown in so many countries, so many different climates,” he said. “It’s the premier base food source for a large part of the world’s population. So, we compete in a global market, and a lot of these countries have a lot of trade-distorting policies that make it difficult to fairly trade and compete with other countries.”
Arkansas has a major role to play in the national and global rice industry. After all, Arkansas produces more rice than any other state in the United States. In 2020, Arkansas farmers are projected to plant 1,190,000 acres of long-grain rice and 205,000 acres of medium-grain rice, which accounts for 57 percent and 19 percent of the U.S. total of rice production, respectively, according figures from the Arkansas Department of Agriculture (ADA).
Rice is a major economic driver in the state, generating approximately $1.3 billion for Arkansas’ economy, making it the second-highest agricultural commodity in the state behind poultry as well as creating 20,000 jobs. Arkansas Farm Bureau estimates that agriculture, the state’s largest industry, generates an average of $16 billion per year for the economy.
In recent years, Arkansas farmers have faced a series of challenges that has negatively impacted their abilities to produce the crops that form the backbone of the state’s economy. An onslaught of factors has roiled agricultural trade in recent years, from the U.S.-China trade war to severe weather in Arkansas.
Weather has continued to plague rice farmers in the state. Arkansas Farm Bureau President Rich Hillman said that a wet spring has delayed rice farmers from planting, with some row-crop farmers behind even the 2019 planting numbers. He struck an optimistic note, saying that there’s still time to complete the planting process and secure their yields.
ADA Secretary Wes Ward points to the ongoing COVID-19 pandemic as a challenge facing Arkansas farmers, as well as declining commodity prices caused by the trade crisis.
“The disease or pandemic outbreak is historic for modern times and has emerged on the heels of an ongoing global slowdown. Additionally, prior to the February 2018 trade disputes, our rice and row-crop producers experienced multiple years of depressed commodity prices. In early 2018, the potential for improved rice and row-crop prices appeared to be emerging, but the expectation of improved demand for rice, cotton and grains was short lived with the increase in trade friction between the U.S. and trading partners, especially China,” he said.
“The introduction of escalating trade tensions further reduced demand and weakened commodity prices, and now the coronavirus pandemic has idled significant global economic activity with a punishing impact on commodity prices.”
To overcome these challenges, Arkansas rice farmers will have to embrace innovation and seize new opportunities to lower their expenses and improve yields and profit margins, according to Coker. These opportunities range from implementing new technology, marketing practices and crop varieties.
“We’ve got to become better overall managers, and we’ve got to find those levels of efficiency and economics that fit our individual operations. That can be as simple as deciding if you need a new tractor to something as complex as needing to revamp your labor setup and look for more ground or renegotiating your rent structures,” Coker said.
One opportunity for rice farmers is embracing the versatility of the crop. Rice is not simply a product to be eaten. Breweries purchase rice as a source of starches; the pet-food industry uses rice in its products; and industrial food companies use rice for candy-bar and potato-chip coatings.
Domestic rice consumption is another area in which rice farmers can move. In addition to U.S. companies using rice for industrial purposes, Coker identified consumer use as a sector ripe for expansion. The University of Arkansas Extension Service, he said, has developed an aromatic rice that has a similar flavor profile to rices grown in Southeast Asia. These rices could prove popular among U.S. consumers and the restaurant industry.
“We’ve got to be able to drive domestic consumption. We’ve got to be able to increase our domestic consumption by promoting and talking about rice,” he said.
This commitment to innovation also extends to sustainability practices, something that Coker says is critical both from stewardship and business perspectives. Rice farmers, he said, have worked to reduce methane and CO2 emissions while also increasing crop yields.
In addition to extending the viability of their land, sustainability is increasingly a draw for customers — particularly millennials. “We’ve got to identify with the consumer, and if that’s what our consumer, and that’s what our market is demanding, then that’s what we got to provide,” Coker said.
He also said that water conservation and energy use are crucial for rice farmers who are looking to sustain their businesses. Water conservation is an older practice but it’s becoming a major part of modern agricultural sustainability. On Coker’s family farm, relatives in previous generations built reservoirs to recapture and conserve water.
Now, water conservation has gone to the next level as farmers can use technology to monitor water levels and control irrigation equipment, increasing efficiency for rice farmers.
“I think generations before us were very practical with water conservation. They were probably doing these measures before they actually had names and recognition. So, we’re just taking what they did, taking it a step further. We’re able to not only remotely access our irrigation equipment and turn it off and on, but we’re able to have a remote sensing of soil-moisture levels,” he said.
For energy usage, many farmers are beginning to embrace solar power to meet their electricity needs. One of the most notable examples of solar energy in Arkansas agriculture is a proposed 26-megawatt solar power plant that Producers Rice Mill is planning to build in Stuttgart. Once approved by the Arkansas Public Service Commission, the solar array — the largest commercial solar array and energy storage facility in the state — is expected to save the company $100 million over 30 years.
Arkansas Rice Federation Executive Director Lauren Waldrip said that water usage among Arkansas farmers has decreased by 53 percent in the last 20 years. Land use and energy use have also decreased by 35 percent and 38 percent, respectively, thanks to increased sustainability measures
“For agriculture in general, farming is becoming increasingly competitive. Producers have to be exceedingly strategic and advanced just to stay in business. They are learning to do more with less,” Waldrip said. “Farmers will continue becoming more efficient as they work to conserve their resources and ultimately their livelihoods for generations to come.”
The most pressing issue for Arkansas rice farmers now is the COVID-19 pandemic.
Like many economic sectors, the agricultural industry — including the rice industry — has been buffeted by the COVID-19 public-health crisis. However, agriculture has been declared an “essential” industry, allowed to remain open.
The pandemic has created a host of problems that farmers have to respond to and navigate. Ward said, “The unknowns and uncertainties surrounding the COVID-19 virus are concerning. There are health, economic and employee and labor issues that deserve a great deal of attention.”
To ensure farm laborers and other employees remain safe, farmers and other producers are having to create clean work environments and implement deep cleaning. Like many industries, farmers are also embracing web-based communications in order to conduct business.
Waldrip said, “From a safety standpoint, we’re seeing proactive measures from our mills and processors.” “These mills have vigorous lists of guidelines and requirements for their operations. They are outfitting employees in PPE [personal protective equipment], taking temperatures and the precautions go on. I would argue that our rice mills are the safest place to be.”
COVID-19 has raised issues of food security in the United States, which Coker said is weighing heavily on rice farmers. Many crops have suffered a decrease in demand, but rice is not expected to be dramatically impacted.
Hillman points out that domestic retail rice sales increased more than 50 percent in the month of March, compared to previous years. He said that this is an indication that domestic consumption will likely grow in the short term, despite the loss of important restaurant-industry partners.
“This applies to all of agriculture, of course, but we are hopeful that agriculture will continue to deliver a safe and affordable product that is a staple around the world. With the technology, research and ingenuity at work on our farms, we believe the role of the farmer has never been more important,” Hillman said.
“The demand for rice during the early phases of the pandemic was quite evident given the empty rice store shelves,” Ward said. “There was no shortage of rice, just a very short-term logistics issue, which had a quick fix due to the efficiency of our Arkansas and U.S. rice industry. Our Arkansas rice mills maintain a running rice supply to maintain operational efficiency throughout the year.”
According to Ward, the pandemic raises a number of questions for farmers and agricultural officials that could impact the short- and long-term future of the rice industry. The foremost question for Ward is how long will the pandemic last and affect the agricultural economic infrastructure? Some epidemiologists have predicted that there will be a second wave of the disease in the fall, an event that could extend the impact the pandemic has already had. Ward also questions if the virus will mutate or if health officials will be able to fight the virus based on information developed during the first round of the virus.
To help the agriculture industry weather the pandemic, the U.S. government has allocated funding to support producers. In the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Office of the Secretary of the Department of Agriculture received $9.5 billion to support farmers and ranchers, and the Commodity Credit Corporation received $14 billion to fund the Price Loss Coverage and the Dairy Margin Coverage programs.
In total, the CARES Act allocated approximately $49 billion for food and agriculture provisions. While the assistance is welcome, Waldrip said that strengthened trade deals are the ultimate goal, rather than government aid.
“Farmers don’t want to rely on a stimulus package or safety net programs from the government, which thankfully give them some sort of security,” she said. “They would much rather have new trade deals and new markets, and we will continue to push for those. What will the world of food, nutrition, and agriculture look like post-COVID-19? That’s hard to say. I think whatever it looks like, it is safe to say that our industry will be there to grow, mill, and distribute a safe, affordable and nutritious crop.”
No matter how the COVID-19 pandemic pans out, it will create a new normal for rice farmers — as well as the world at large — Coker predicts. “Some of these changes — we won’t go back to the ways we did things,” he said. “There will be improvements that will be incorporated into our business permanently.”
Both Coker and Ward believe that the pandemic will speed up the process of consolidation in the industry — the big producers getting bigger. Consolidation will increase without government support due to the global economic slowdown, trade difficulties and the pandemic, Ward said.
“Our rice industry is large, complex, evolving and multifaceted. Industry participants have a growing concern about profitability, liquidity and solvency. They are concerned about being highly competitive, both domestically and globally, and many may require significant government support to avoid being a business casualty,” she said. “Policy inefficiencies of the last five-plus years, coupled with COVID-19’s drag on U.S. and global economic activity, have weighed heavy on producer and industry participant cash flow statements.”
“Agriculture is continuously evolving, and it looks like right now, the scales of production continue to get to point towards bigger machinery, larger field equipment, larger acreage, farmers, bigger trucks,” Coker said. “Everybody’s trying to reach an economy of scale that they can maintain some level of profit.”
While states including Arkansas are already in the process of beginning to reopen the economy, the impact of COVID-19 and the future of the rice industry are currently unclear. What is clear is that Arkansas rice farmers will be doing their part to provide the food and products needed by customers worldwide.
“The industry’s current financial pain and challenges are very real, but the industry is resilient,” Ward said. “The current epidemic will pass, and tomorrow’s demand for our traditional and specialty rice varieties will only grow.”