August 11, 2000

EARLY RICE PROSPECTS EXCELLENT IN MEXICAN GULF STATES

Rice harvest has already begun in parts of southeast Veracruz as well as Campeche, and the quality of the rice is reported to be excellent. On the Veracruz fields receiving millers support, cost of production is estimated at 10-12 thousand pesos (US $1,068-1,283 dollars) per hectare, and yields are anticipated in the range of 8,000 kilograms (8 metric tons) per hectare. On the Campeche fields receiving millers support, cost of production is estimated at 6,000 pesos (US $641 dollars), and yields are anticipated in the range of 3,000 kilograms (3 metric tons) per hectare. Recently, non-irrigated fields have become prevalent in the region of the Gulf of Mexico, but irrigated fields still make a major contribution to total production.

In June, four rice millers in Cordoba, Veracruz agreed to finance the irrigated summer rice crops of Veracruz and Campeche. Prior to the agreement, there was concern that millers would decline to finance the summer 2000 crop following the unpleasant results from last summer, when low domestic prices and the improved position of the peso versus the United States dollar gave millers a negative return on their investment (see Mexico trip report March 2000). In addition, rice producers were unhappy with the level of Mexican government assistance last year, as revenue from the nationalized oil industry was down, compressing the national budget. Oil prices have been up this summer, generating increased income, so producers in many sector of agriculture will be seeking financial assistance from the Mexican government. Rice producers are normally at a distinct disadvantage in the competition for government program funds as the rice sector is small and less influential compared to corn and sorghum.

For more information, contact Ron White, Production Estimates and Crop Assessment Division, FAS, USDA at (202) 690-0137, or e-mail whiter@fas.usda.gov