Source: Feedlot

The U.S. rice market is experiencing a strong price rally as sharply lower planted acreage tightens supply expectations. Since the beginning of 2026, September rough rice futures on the CME have surged 36%, reaching their highest level since the contract was launched on July 22.

The main driver behind the price increase is not crop condition which the U.S. Department of Agriculture (USDA) still rates as mostly good to excellent but the sharp decline in long-grain rice production. In 2026, U.S. long-grain rice acreage fell by about 29%, with the steepest decline recorded in Arkansas, the country’s largest long-grain rice-producing state. There, planted area dropped 41% to 851,000 acres, the lowest level in nearly 50 years.

Analysts attribute the decline in acreage to high production costs, competition from lower-priced imported rice, and farmers shifting land to more profitable crops, particularly soybeans. As a result, tighter domestic supplies are providing strong support for rice prices.

Market participants believe fears of a severe supply shortage may be overstated, as higher prices are likely to curb demand. However, if current trends continue, the United States could increase rice imports by the end of next year to meet domestic consumption.

Despite lower U.S. production, global rice consumption continues to expand. USDA forecasts world rice consumption at a record 541.4 mln tons in the 2026/27 marketing year, up from 538 mln tons a season earlier. Domestic rice demand in the United States also remains stable and has shown steady long-term growth.

Published Date: August 7, 2026