>> BOBBY COATS: It is a pleasure for us to be with you.
I am Bobby Coats, the professor in the Department of Agricultural Economics and Agribusiness.
In the University of Arkansas Systems Division of Agriculture.
Now, Dr. Tim Walker, general manager Horizon Ag, joins me from their Memphis, TN headquarters.
Tim will be discussing Horizon Ag: Future Driven, Farmer Focus.
Tim says a much needed partner for Clearfield rice will be planted commercially in 2018.
This companion technology developed by BASF in the LSU Ag center, is the first Provisia
rice variety that is tolerant to the Provisia herbicide.
This presentation will provide insight into the role Horizon Ag played in bringing this
technology to market.
But even more so, in how to keep both technologies viable for years to come.
Now, Dr. Tim Walker, general manager of Horizon Ag on Horizon Ag: Future Driven, Farmer Focused.
Tim, we look forward to your presentation.
>> DR.
TIM WALKER: Thank you for the introduction, today, what I would like to cover in our,
in our presentation.
I would like to, take some time to introduce myself, the partnership that we have with
much of the industry, basically all of the industry.
We are a partnership company, and are certainly successful because of the partnerships that
we have.
I do want to speak about our Horizon Ag offerings of Clearfield and now the new Provisia technology
and then also some industry concerns.
I'll close today's talk just pointing out some things, some trends that we have in our
industry that, you know, certainly not - don't want to be Chicken Little but there are some
signs out there for alarm that we need to be aware of for any business that's involved
in our Southern U.S. Rice Industry today.
So again, I'm a native Mississippi and grew up on a small farming operation, in Tate County,
Mississippi.
I've been in agricultural all of my life.
Was very fortunate to be able to go to Mississippi State University, where I graduated with an
undergraduate as well as a Ph.D. in Agronomy.
Stayed around Mississippi State for a number of years.
Going through from being promoted through the graduate student ranks up to the full
professor.
I was promoted as full professor in 2011.
And then in 2014 the owners of Horizon Ag called me and we had a successful visit and
follow-up visits and such like, but I'm just extremely excited about the new opportunity
that was given to me in March 2014.
And here we are approaching four years into the new role for me, but also some new changes
and new things within Horizon Ag.
Just a brief history about Horizon Ag.
We were established in 1997 by five independent southern seed companies.
And as I transition in a moment talking about partnership, clearly we've been a partnership
company since day one, for five seed companies to join together to form Horizon Ag and then
for the partnership that we have with BASF in our breeding institutions, we talk a lot
about partnership and we are successful because of partnership.
Our original model was a foundation seed company model.
We were licensed by BASF to multiply and market Clearfield pure line rice seed and have done
that successfully for a number of years.
Recently we have changed our go to market strategy.
We now operate as a wholesale seed company where we continue to provide Clearfield pure
line rice to the Southern U.S. Rice Industry and are so excited about 2018 and the launch
of our first herbicide tolerant rice since the launch of Clearfield and that being Provisia.
Again, I can't say enough about how successful we've been because of the partners that we
have.
Again, BASF, LSU, Arkansas, Mississippi State, those institutions have provided germ plasm,
varieties that we've been able to successfully market through the years but not just that
component but the seed producers.
We've had a number of seed producers that have helped us be successful.
The retail partners that we have and because of this, and because of our success, I think
it's strengthened our ability to be a partner to the whole rice industry.
So, let's talk about Clearfield rice for a moment.
It's very difficult to talk about Provisia without looking back at the success of Clearfield
and such a good technology that we've had over a number of years and Provisia will only
be a partner through the Clearfield technology.
We're not looking to move away from Clearfield as much to extend the life of Clearfield with
Provisia.
Since 2001, over 9 million acres of rice have been planted to Horizon Ag branded Clearfield
varieties.
If you look at how many acres in the southern United States have been planted over that
same period, we've had the opportunity to participate on about 22 percent of the southern
USA rice acres.
During the time that we've been marketing varieties, we've released or put into the
marketplace approximately 18 varieties, 14 of those have been Clearfield long grains.
We've also introduced three medium grains and are excited about a new Clearfield aromatic
rice that we will have in seed production in 2018 and have a launch in 2019.
Of all of the rice that we have brought to market, Clearfield 151 has been by far, the
most popular variety.
It's accounted for over 30 percent of our sales during this time frame.
I think it's important for us to understand where we are and also to have a path forward
and oftentimes as Walt Disney quoted, "You may not realize it when it happens but a kick
in the teeth may be the best thing in the world for you".
Clearly the U.S. rice industry I think had somewhat of a kick in the teeth.
It really started in 2010.
If you have been around the rice industry very strong at all, you remember quite well
the difficult summer that we had in 2010.
Excessive heat led to a lot of rice that just did not have very good quality.
The appearance of the rice was not very good at all.
And so that led to a lot of industry discussion.
Horizon Ag was in the middle of that discussion and so I would like to say that 2011, through
2013 were really defining years for Horizon Ag.
We began to encounter in our industry, major push back from export customers and really,
we all had to rediscover or redefine that of what quality rice is.
Rather than quality rice just being how rice milled, it became more about, or really, it's
sort of sent us back to the days where quality was more than just milling, and it was how
does the rice look and certainly how does it cook.
So, during that time frame we at Horizon Ag got in the trenches with public breeders and
certainly USA rice.
In addition to that, we also do in large part to some of the work that the USRPA does, especially
hosting the Rice Marketing and Technology Convention each year where all of the Latin
Americans come and join with North Americans and talk about the rice industry.
We were able to take advantage of those opportunities and really begin to learn what that end user
wanted for our export market.
Largely the competition was coming from the south.
Brazil and Uruguay were becoming quite competitive.
They had rice that was extremely low in chalk and had long grain, 7.0mm or longer.
The other thing is that the southern, South American rice has a much higher amylose content
and lower gel temp, and so the rice that was coming into Mexico and Central America was
a little bit different in cereal chemistry and therefore processed and cooked a little
bit differently and so all of those things were things that we learned and are striving
every day, to be more competitive in our export markets.
So, you know, we had those conversations, were involved in those conversations and hats
off to our breeders.
Hats off to our industry.
We actually did not release really any new varieties to speak of from about 2012.
I think CL152 was the last long grain release we had until we released CL163, CL153 and
CL172.
And again, from the standpoint of how the grain looks, that quality component of how
the grain looks, you can see with CL153, CL172 and PVL01, now our first Provisia rice all
are extremely good quality rice from how they appear after they've been milled.
So, you know, our 151 and 111 were relatively high chalk and I like to point out that this
is a Nicaraguan Chalk measurement and those of us in the industry know that the standard
is the Nicaraguan Chalk standard is the most stringent standard in the Western Hemisphere.
So, what I'm showing you a 14% or an 11% Nicaraguan chalk that is very low chalky rice.
And so we're excited about these new developments and these new Clearfield varieties as well
as the new Provisia variety that we're bringing to the market, not just from the yield standpoint
and the improvements we've made there and disease, but bringing a product to the market
that is going to be more accepted not just by our domestic users but also our important
export customers.
You can see here from the graphic.
This is a picture of CL172.
We have very nice long grains, and extremely translucent rice.
Something that is very appealing in a package.
And this is important in the United States, but probably more so important these days
in some of our export markets, very important export markets in the Western Hemisphere.
This particular graphic, let me just set the slide up for you.
This is actually exports to Nicaragua and as you can tell some ten years ago, we had
a relatively strong export market to Nicaragua, over a 100 thousand metric tons of rice was
leaving the United States destined for Nicaragua on an annual basis.
Again, after our rice quality issues really came to the forefront, this is a market that
really went away.
And it essentially dropped to zero over, you know, 2014 through 2016.
We were fortunate to again, and this started at the rice marketing and technology convention
in 2016 in Houston, Texas.
We spent all afternoon with a group from Nicaragua, learning about their rice culture, what is
it they like about the rice, how do you cook it and how do our varieties perform under
their cooking strategies and recipes.
So, we had taken some rice samples to them and it turns out that the CL172 was a variety
that we were bringing to market that at least had some opportunity of reentering into the
Nicaragua market.
So when you see this little blip of increase in exports to Nicaragua in 2017 that is largely,
if not at all due to the CL172.
Even as we speak, there's a vessel being loaded to go to Nicaragua that has identity preserved
CL172.
We hope that over 10 thousand tons, if not more will enter into the Nicaraguan market
this year.
We continue to have conversations with folks from Nicaragua as well as other Central American
countries, trying to find rice's that we grow that meet their needs, so they can then ask
for those varieties when their sources rises from the United States.
We talk a lot about quality at Horizon Ag.
We certainly believe that that is an opportunity for us to be successful but we're not just
a quality company.
We realize that you have to have yield.
But more importantly we talk a lot about economic yield or return on investment.
So, you will hear us and see information from us talking about return on investment.
So, we spend a great deal of time talking to the industry, but also talking down to
the individual farmer level about how to be, or how to have a higher return on investment
regardless of what they plant.
The first question to ask is, you know, do you need the Clearfield technology, or do
you need the Provisia technology?
And then once we have that decision on the table, then we need to decide where the best
opportunities on that particular farm are for planting varieties and hybrids so we can
optimize returns.
Again, our goal is that the farmers in the southern United States would manage the farms
for optimal profitability.
Some fields may perform better with hybrids but there may be opportunities for some fields
that would perform as well, if not better from a return on investment standpoint with
varieties.
Management practices go a long way in ultimately determining the optimal form of profitability,
planning dates, seeding rates, crop protection decisions are all involved.
One thing that we believe that we fit on a lot of acres is early planning.
We know and especially with some of the volatile weather patterns that we've had in the summers
of late, that if we can plant rice in Louisiana, towards the end of February or early March
and then own up to the upper delta, if we can start planting rice around the 20th of
March through the 10th of April, then varieties really go head to head with any other offering
that's out there from a yield standpoint.
We also know that, you know, hybrids are much better planted.
That planted later in the season, you're planting a much less seeding rate so the cold tolerance
and herbicide response and all of that that you often see in colder planted conditions,
we just believe that varieties have a better fit there so we push a lot of people towards
planting varieties first and then following up if they do plant hybrids, to plant hybrids
later in the season.
Again, we do this because this is going to give the farmer optimum profitability over
the entire farm rather than just putting all his eggs in one basket.
Again, more information about return on investment.
And this information was derived from the annual Mississippi State University Enterprise
budgets that are published and when you start looking at those direct costs and at a selling
point of $5.40 per bushel, when you compare the Clearfield variety yield difference to
the Clearfield hybrids and again selling this at $5.40, you can see there that it takes
about a 20-bushel difference.
In other words, the Clearfield Pure line varieties would have to yield 20 bushels less or if
you flip it on its head, the hybrids would have to yield 20 bushels more really to break
even on that net profit opportunity.
We do understand that not all bushels are the same.
Though we don't have some of the quality incentives that other countries have, we do have milling
incentives built into our purchase of rice.
And so when you look at milling data from University trials averaged over the past few
years, CLXL745, which is a huge competitor for CL151 and CL153 for those Clearfield acres,
the CLXL745 milled a 48 hold 70% total.
In those same years and in the same trials, the CL153 milled a 61% hold and 71% total.
So with just our standard industry discounts and premium, I think you have to consider
that at the end of the day, what is that net profit.
So, when you bring that back into the budgets that we talked about earlier, as oppose to
a 20-bushel difference, you're really starting to look at about a 30-bushel difference when
you have that type of milling difference, or that milling advantage from the Clearfield
pure lines relative to the Clearfield hybrids.
Again, if the Clearfield variety yielded 160 bushels, but milled a 61% hold, and a Clearfield
hybrid yield 190 bushels at a 48% hold, you're really still at breakeven at the farm gate.
So it's just something to consider.
Again, we talk about quality, but quality also leads to profitability, and we want the
farm to be, and not just the farm, we want our industry to be profitable into the future.
Another example when you're talking about yield, if you looked at CL153 yielding 185
bushels per acre and CLXL745 having a yield advantage of about 15 bushels to the acre.
And that's what we see often times out in the industry.
When you consider those milling premiums, you know that are involved, the net profit
is quite a bit different.
You can yield less but still have more net dollars in your pocket at the end of the year.
So we've talked about quality.
We have talked about profitability, but we've also made other improvements in our new variety
offerings.
Again, if you look at sheath blight ratings from CL111 and CL151, very susceptible, susceptible,
CL153 is susceptible, but our new variety CL172 is moderately susceptible.
Blast is much improved, especially for CL153 and CL172, we have the pita gene in those
two varieties which provides broad spectrum resistance to basically all of the major blast
races in the southern United States.
Bacterial Panicle blight has been one that has really been a tough foe for us.
Again, especially in those very hot summers when rice is pollinating later, or during
the middle of those hotter stretches of July.
CL111 and 151 were very susceptible to bacterial panicle blight, but we've made improvements
in our last 3 long grain varieties.
These varieties just hold up a little bit better when there is bacterial panicle blight
present.
So lodging is another one.
151 was our highest yielding variety but if you pushed it really hard to get the top end
yields, oftentimes it was going to lodge.
Now we have moderately resistant ratings for our new CL153 and CL172.
So all in all, when you look at our performance over the last few years, we have addressed
quality.
We have addressed return on investment.
Addressed disease and so we certainly are proud of the accomplishments and owe the accomplishments
largely to the part of our public breeders that have brought these very good varieties
to us to help bring to the market.
One of the last comments I would like to make about Clearfield is, you know, just show what
really went on in a real-world scenario in south Louisiana.
So I have two charts here.
I want you first to focus on the chart that I am putting the arrow on right now.
When you start looking at yield trends prior to the launch of Clearfield.
So, 1991 to 2000, we have yield trends that were going on in the State of Arkansas in
our dark green and light green was from the state of Louisiana.
So as you can see yields for about a ten-year period there prior to the launch of Clearfield
and Louisiana were essentially flat.
In Arkansas, we were gaining about 82 pounds of rice per year but only 8 pounds per year
in Louisiana.
Now, fast forward to the next ten years.
The next ten years after the launch of Clearfield 2001 - 2010, Arkansas yield gains actually
flattened out a little bit, still gaining but gaining about 28 pounds per acre per year
but Louisiana actually started gaining about 80 pounds of rice per acre per year.
Now the adoption rate of Clearfield technology was probably the same for both of these states.
They followed and tracked very similarly in terms of the percentage of acres planted in
each of those states to the new Clearfield technology.
But what the Clearfield technology allowed in Louisiana is for a more efficient agronomic
system where we went away, largely went away from the water seeded system in south Louisiana,
to a dry seeded, delay flood system that offered us a lot more agronomic advantages.
And so, I would like to say in addition to the weed control that the Clearfield system
brought, there was also a lot of agronomic gains from the ability to manage nitrogen
more efficiently, to manage pests more effectively, all of those things helped.
So clearly the Clearfield technology has been just a booming success for our industry.
We want to maintain that Clearfield technology for as long as we possibly can and that is
why we are bringing Provisia to the market.
So, from Horizon Ag's perspective, in the Clearfield, we have successfully delivered
Clearfield rice to the market and we pride ourselves in offering a profitable opportunity
to rice farmers and we do that with a long term vision.
The work that we've done and the partnerships that we have, have certainly helped us to
be a trusted partner in the rice industry and we're very thankful for that and very
appreciative of the opportunity to serve alongside in the industry to make it better and better
each day.
Now, again, partnerships.
We can't talk about Clearfield going into the future without talking about Provisia
and vice versa.
So just a few points about the Provisia rice system.
For rice growers who are experiencing these extreme tough resistant weed issues, BASF
developed the Provisia rice system to keep fields clean and ultimately to manage resistance.
Red rice, just our normal red rice is certainly going to be controlled very well by the Provisia
system, just like Clearfield continues to control ALS resistant red rice today.
But through the years of Clearfield, we have encountered a lot of volunteer rice that is
now tolerant to the (?) herbicides as well as some other grasses just from a long use
of ALS herbicide.
So again, the system is going to help us return to those early days of Clearfield where we
had finally had the assurance of getting a clean field, not worrying about weed control
and not worrying about the costly applications late in the season and they can worry about
managing other aspects of the farm.
Rotation is going to be key but it's also going to be more flexible than what many of
our folks have become accustomed to with just a Clearfield only herbicide tolerant rice.
And then there are unfortunately a lot of acres that have essentially been lost, if
not lost, they're certainly not yielding very well at all because of the volunteer, the
witty rice complex that has just grown, you know, to a point where it's just almost impossible
to plant these fields and manage for domestic rice.
So those acres by implementing this new Provisia system, can be brought back into production
and probably be brought back a couple of years earlier than just laying it out or going to
a rotational crop.
Again, when you are trying to harvest these fields that have an abundance of volunteer
witty rice out there, we should return a lot of those fields to being able to deliver a
more uniform grain back to the mill.
This is a system that, whether you have resistant issues now or whether you will have resistant
issues in the future, this system will deliver a plan that gives growers peace of mind because
of the stability of the system, the predictability and ultimately the performance of the system.
It is a rotational partner to the Clearfield system and we as well as BASF and our University
partners will be promoting the stewardship, so that we can prolong the life of Clearfield
but also have a long life for the Provisia system.
These systems again, I mentioned earlier about the fact that over the last few years a lot
of dollars are spent after the rice goes to flood because of escapes and that sort of
thing.
I just know and from what I have seen with this Provisia system, it's going to help us
calculate the cost early on, stay on budget and you know, when you go out there and have
20, 30 percent additional expenses in a weed control budget, it really takes the profitability
of rice away, really quick, especially in low commodity prices that we've had over the
past couple of years.
So if we can maintain that herbicide budget within 5 to 10 percent, I think that is much
more manageable and gives the farmers much more peace of mind in their farming budget.
Rotation, rotation, a lot of folks want to grow rice as many years as they possibly can.
Having two herbicide tolerant rice's in a rotation will certainly give them more control.
If they want more rice in the rotation, this is a way to do it without just putting so
much selection pressure on one particular herbicide system.
One of the better rotation systems for this, for those who want to grow rice more years
than not is going to be a rotation of Provisia, Clearfield and soybeans and probably in that
particular order.
Not probably, but absolutely in that particular order.
We cannot follow the Provisia system.
We can't follow the Clearfield system with the Provisia system because of the residual
herbicides that would injure, if not kill other Provisia rice and certainly would impact
the yields in a negative manner.
This system of a rice, rice, soybean rotation again, is going to give farmers more options
for their production, allowing them to plant more rice over a 3-year period.
Another excitement about this technology is it is the first herbicide technology system
that has been brought to the market since Clearfield and that as you well know, has
been well over 15 years ago.
I like to just take you back to a photo that was taken in the early years of the Clearfield
system.
We remember all too well of when we had no herbicide tolerant system and trying to manage
the red rice.
The Clearfield system has certainly been a jewel for our industry.
But unfortunately, now we have even Clearfield fields that have reverted back because of
out cross red rice, as well as the witty rice complex.
More to this old thing that we use to grow rice in.
So Provisia is going to help us with that.
We're excited about these two technologies working in tandem.
It is a 15-year-old system and so you know just, if there were no volunteer rice's, if
they were only out crosses in that type of thing, then over a period of 15 years you're
going to have just natural out crossing that's going to impact the acres.
But we've done some things from a stewardship standpoint that have probably exacerbated
the problem majorly on many acres, maybe 20 plus percent of the acres.
Number one, is we left uncontrolled escapes early on in the release of Clearfield.
We left them uncontrolled and that led to some out crossing.
We then entered into a continuous rice system where we've planted Clearfield rice followed
by Clearfield rice, year in and year out.
And then as the Clearfield hybrid technology came on the scene and really started to grow,
probably around the late 2000s, we do know that Clearfield hybrids typically shatter
a little bit more than our traditional clear line varieties so when that grain shattered,
you ended up with volunteer F2 hybrids and those volunteer F2 hybrids could then go to
seed and shatter and end up replenishing the soil bank so to speak with these tolerant
rice off types.
That's largely what we call them now, this witty rice complex, a combination of volunteer
Clearfield hybrids as well as some out cross, just normal out crossing event.
Again, this picture is probably worth 1000 words but let's talk about on-farm examples,
real-life examples of what is going on out there in our industry.
So when a 5,000-acre farm that we had been able to work closely with, there's about 10
percent of this farm.
So, 5 or 600 acres that's severely impacted with the witty rice complex.
Where it's most impacted is where 6 years of continuous Clearfield hybrid rice had been
planted.
Again, not good stewardship, but that's the situation that we find ourselves in.
This field is now experiencing a 30 plus percent yield reduction.
In addition to the yield reduction, we're also seeing the substantial quality reduction,
15 plus percent.
Each year is now being impacted negatively because of this particular problem.
Now, on about 20 percent, so another 1000 acres or so on this particular farm, we would
call moderately impacted.
It has been in continuous Clearfield hybrid rice, maybe not to the extent of the six years
but nonetheless, there's been multiple years of Clearfield hybrid rice there and we're
still experiencing substantial yield reduction 15 to 30 percent quality reduction somewhere
between 10 and 15 percent and then on about 70 percent of the farm, we would call it slightly
impacted.
This is an example that if you do have these situations on your farm, where you have these
excessive witty rice issues, it's very difficult to keep that separate from the entire farm.
This has been a very good soybean and rice rotation.
Again, the soybean rice rotation is the best rotation for long term stewardship of the
Clearfield system.
But about 70 percent of the farm is slightly impacted.
Are they seeing a major yield loss on those acres?
Probably not major right now but it doesn't take long for the minor issues to become major,
especially with a large part of the farm.
30 percent of the farm being impacted at moderately or excessively.
So, I want to transition a little bit now from the standpoint of Provisia and talk a
little bit about the PVL01, the first variety that will be launched into the market that
has the Provisia trait where you can spray the Provisia herbicide on it.
This variety was developed by the LSU Ag center, Dr. Linscombe and his team have done a very
good job bringing this variety to market and they brought it to market in record time.
5 years from the time they crossed to the time we had foundation seed.
This is about half the time that it normally takes but they used the Puerto Winter Rico
nursery, I think, four years in a row and just really doubled down their efforts to
get us something to help with this very serious problem that has plagued our rice industry
over the last few years.
You know, I'm excited to talk about the variety from the standpoint that we're not launching
a variety that's going to take us back from our commitment to bringing higher quality
rice back to the southern United States.
It does have a 7-millimeter grain length and it does have 7 percent, and this was measured
in 2016 which was a pretty high chalk year, had 7 percent Nicaraguan chalk, so it's already
under that 10 percent standard that the Nicaraguans have.
One of the things that you'll notice about this variety is it's much lighter in color,
does have indict in the background, and has a lighter color, we will never fertilize this
rice enough to get it to a color like our traditional southern U.S. long grains like
CL172.
It does have good yield potential and I would say that it has excellent yield potential
on these fields that are severely impacted by this witty rice complex.
This is a demonstration field of our PVL01 and has two sequential applications of 15
and a half ounces, one application at early post and the second application at late post.
This field is in the same field.
It's divided by a levy.
This is actually a field of Clearfield rice that has been over taken by this witty rice
complex.
So as you can tell, the weed control system is phenomenal.
It's going to kill those witty rice plants, the red rice plants.
We are going to be able to return our fields to what they should look like which is a very
neat, clean, rice field with this particular herbicide system.
Implementing the Provisia again, we've talked about it.
But I can't stress it enough.
This is a rotation partner.
We certainly want to see a rotational crop other than rice in the rotation.
Soybeans works well for the bulk of the acres in the southern United States.
But you can follow those soybeans with Provisia.
If you want rice two years out of three, then Clearfield would be a good component, a good
opportunity to bring it behind the Provisia before you rotate back to soybeans.
For those that aren't interested in having two out of three years in rice, then this
is really a nice tool because you can go Provisia soybeans, Clearfield soybeans, back to Provisia
and put much, much less selection pressure on both the Clearfield technology as well
as the Provisia technology.
And I know there's a lot of acres out there, especially in the Grand Prairie, the Mississippi
delta probably even some in the boot hill of Missouri, Northeast Arkansas.
There's a lot of our acres that can grow really good soybeans and so this is an exciting tool
for you to begin thinking about jumping on board, even if you don't have the issue of
witty rice because of the flexibility that it gives you.
I can't stress enough that we just have to use this technology as a tool.
We need to begin with the worst areas and we're going to have enough seed available
in 2018 to do just that.
We can go out there and put that technology to work in those very difficult areas to manage.
And then bring the technology on to more acres as more seed becomes available and as new
varieties become available.
I think, and this is especially true for our friends in south Louisiana.
I just think we have to remember the yield gains that we achieved from the drill seeded
delay flood system.
And many of these farmers have gone back to the water seeded system.
Clearly the weather has not been a friend to our industry in south Louisiana over the
past couple of years but I'm seeing more and more rice go back to the water seeded system
to try to control the witty rice.
Provisia is going to be an excellent technology and tool for you to get back in there and
take not just the not just have a tool that cleans up a lot of messes that have been made
over the years but also to take advantage of those good agronomic practices that we
can employ with the drill seeded delay flood system.
I must remind us that new technologies like Provisia are typically slow to be developed.
If you think about it, it's been 15 plus years since the launch of Clearfield.
Provisia, I think the work started in the late 2000s, but it really was not talked about
until about 2012.
So from 2012 to 2018, there's been 5 to 7 years from the time it was talked about to
the time we've actually brought it to market.
It's going to be really a soft launch this year and have a full launch next year so any
time a new technology like this really comes on the scene, even from a talking point standpoint,
there's still six to eight years before it's going to be used on the farm.
I can tell you there's been a lot of farmers that I know, friends that I have, that are
farming that have needed a technology like Provisia probably for six years or more.
So, we've got to treat this technology as it is.
It is a prized possession.
We're very fortunate to have it in the rice industry and we need to treat it as such so
that we can extend the tools with have for as long as we possibly can.
Again, for those farms that aren't in critical need, those that maybe have moderate or even
light problems of the weedy rice issue, begin on a smaller share of the farm.
When I was working in extension and advising a lot of farmers during those days, regardless
of a new variety or new technology, we always encouraged them to try something on a small
scale, ten percent, maybe up to 20 percent.
So guys that don't have the problem, farmers that don't have the problem, really pay attention
to this technology and jump on in to the technology and begin using it.
It's only going to help you in the long run, extend the life of your Clearfield as well
as give you a much longer life for this Provisia system.
So now that I've talked about our offerings.
I want to just put my rice hat on.
Again, you saw my bio.
I have been working in rice for 20 years.
It's the only way really in my adult years that I've made my living.
I've been in rice all of my life and so when I'm given the platform that Bobby's given
me today, I certainly want to use it to just shine some light on some concerns that I see
from our industry and again hopefully it allows for discussion and maybe even call to action
from our industry.
So, I want to start with just the evolution of our rice industry over the last, 25, 30
years or so.
And what we see here is, we had a growth.
This is from 1972, there was some farm bill things that went on that actually opened up
more acres to be planted.
So we grew acres from the 70s into really the late 90s, so somewhere between about 95
and 2000, we reached sort of the peak of the planted acres in the southern USA.
Since that time, we've declined in acres year after year.
So since 1998, if you look at acres on the Y axis over time, we are trending.
Again, this is a trend, it doesn't happen every year.
The trend is we're losing about 36 thousand acres of production per year over this period
of time.
Along that same period of time, and again, we're just talking about the last 20 years,
1998 through 2017, so that same period of time that our acres have been declining, we
have imported about 24 thousand metric tons per year, every year.
So that trend, it's actually a really strong trend.
Is noted by the R square here.
But 24 thousand tons per year increased year over year of rice coming into our country.
Now, we realize that a large part of this is our Tye Jasmine probably the Indian bas
modies and that sort of a thing but nonetheless, we are bringing rice into this country for
people in the United States to eat all the while losing acres of production in the United
States.
Exports though we continue to increase through the years, it certainly hasn't been as steep
of a curb or trend as our imports.
We have grown exports by about 20 tons per year over this same 20 year period of time.
Domestic consumption, again not quite as much as the imports.
But we have trended upwards in domestic consumption to the tune of about 14 thousand tons per
year.
And then Rice yield, over these 20 years, we continue to see genetic and agronomic gain.
If you look at rice yield in the United States over the last 20 years, we've improved yields
about 85 pounds of rice per acre per year.
So, to try to make sense of these charts and bring all of these charts on to one page,
I just have titled this sort of a production balance sheet from 1998 to 2017.
And so over here you see things that have gone on in the last twenty years that should
stimulate growth or be pro-growth for our rice industry.
Domestic consumption has increased and when you look at those tons and you convert those
tons to acres, we've increased because domestic consumption is increased, if everything were
left the same, we would need about 210 thousand acres more today than we did 20 years ago
to feed our domestic consumption needs.
Our exports, our exports have increased.
We would need about 354 thousand more acres if everything was left the same to feed our
export market so to speak.
So, if you look at those, if everything was left unchanged, we would need about 562 thousand
acres more today than we did 20 years ago.
But clearly our acres are declining.
Why are they declining?
Here are some issues that are going on that are probably what I would call pro-decline.
Again, imports.
Our domestic consumption is calling for about 210 thousand more acres, but our imports are
calling for about 250 thousand less acres.
And then the biggy is our yield gain, our yield gain because of the genetic and agronomic
gains that we've had over the last 20 years, we actually are producing rice on or we need
about 750 thousand acres less today than we did 20 years ago to produce the same amount
of rice.
So again, hats off to our industry.
Hats off on being more efficient.
But there still is a little bit of an alarming trend that our acres continues to go down.
So, when you add those pro-declined opportunities for us, it's about a million acres.
The difference of our issues that caused decline, compared to the issues that caused growth
is about 440 thousand acres.
Well, I'd like to remind you, I think it's not ironic from a supply demand standpoint,
that if you go back and look over these last 20 years and you do the quick math, we're
about 500 thousand acres difference on average, when you look at these 4 years, the average
rice acres in the southern United States is about million acres.
About 2.8 million acres, 20 years ago.
So, the thing that I want to bring about from this industry concern and data that I've shown,
we're not in a situation where we can just out yield our challenges.
Unless we want our acres to continue to decrease, we really have to focus on number one, maintaining
and growing export markets.
We have to think about and think very seriously about the amount of imports coming into our
country.
You know, I know that there's some ethnic things that go behind that but, I definitely
think that we have to turn our attention to that and try to promote our farm economy here
and grow rice here in the United States that people living in the United States want to
eat.
Rice is not soybean and corn.
We are soybean and corn minded oftentimes in rice country.
Not only do we grow these crops but its rotational crops but our systems are set up to move a
lot of grain in a rapid period of time.
Rice is a food crop.
Humans are eating rice whereas soybean and corn are mostly being consumed by animals
and with the ethanol industry, automobiles, equipment, that type of a thing.
Humans have a more discriminating taste, so we have to stay in tune with the end user
to make sure that we're growing a product that is desired both domestically, as well
as abroad.
To help bring this about, market segmentation is going to be extremely necessary.
The competition is already doing that.
There's stories throughout the world of countries raising their exports but really growing rice
and segmenting that rice for a specific market before it leaves their country.
We have got to do a better job of segmenting our market so that we can be preferred.
Be preferred, the preferred source for rice at least in the Western Hemisphere and certainly
throughout the world.
So with that, I again want to say thank you for spending your time, listening to me this
morning, talk about Horizon Ag talking about an exciting new technology and the Provisia
technologies but also letting me share some of my concerns for this great industry, an
industry that I love and am certainly appreciative of and the opportunities that it has given
me and my family through the years.
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