Market Impacts of Adopting Herbicide-Resistant Rice in the Southern United States

Herbicide-resistant (HR) rice varieties offer U.S. rice producers a powerful tool for control of red rice infestations. However, improved weed control can shorten crop rotations and boost yields, resulting in expanded rice production and lower domestic market prices. Declining market returns diminish the benefits of HR rice adoption and substantially reduce net returns for nonadopters. More competitive prices increase U.S. rice exports, causing a slight decline in world rice prices. The dependence of the rice marketing loan program on world prices prevents loan deficiency payments from adequately offsetting producers’ market revenue losses. U.S. consumers gain from lower rice prices.