Challenges
Despite their prominence in the rice industry, the cooperative recently experienced some of the most trying and taxing in its history. California’s relentless three-year drought from 2019-2022, caused an estimated $2 billion of losses to the California agricultural industry as a whole (UC Merced) and was particularly devastating to California rice farms. Given the water-intensive nature of rice production, severely limited water access translated to greatly reduced rice plantings, fallowed acres, and substantial financial losses to farmers. Drought impacts directly and severely affected Farmers’ Rice’s growers resulting in two consecutive years of acute crop reductions. In 2021, California rice plantings decreased to 400,000 acres, a significant 20 percent below an average crop of 500,000 acres; and the following year, rice plantings were down by a staggering 50 percent with only 250,000 acres planted.
Solutions
To drive needed higher-value uses of California-grown rice and improve grower profitability despite lower volumes, Morrison collaborated with Farmers’ Rice on an application for the Value-Added Producer Grant through the United States Department of Agriculture to launch a new California-grown rice flour product line. Considering that rice flour is made from “brokens” (rice broken in the milling process), which are sold into low-value bulk channels, the goal of this project was to repurpose brokens into premium rice flour products to increase their value and build profitability for the cooperative. Market research demonstrating the high demand for these products in the rapidly growing gluten-free and health-conscious baking sector strongly supported the success of this venture.
Successes
Farmers’ Rice was successfully awarded $250,000 in federal funding for its 2022 Value-Added Producer Grant proposal. This funding helped support the launch of new rice flour products to ingredient buyers in industries such as snacking/snack bars, mochi ice cream, and gluten-free baking, among others. Grant funds were used offset the high costs of this market expansion, including milling, packaging, and marketing support.
About the client
Established in 1944, Farmers’ Rice Cooperative (Farmers’ Rice) is a rice marketing co-op that supplies domestic and international food distributors, retailers, exporters, and manufacturers with premium quality California rice grown by its farmer-owners. With a vertically-integrated approach, Farmers Rice’s services encompass the entire farm to market process, including transporting, drying, storing, milling, packaging, and selling California-grown rice to buyers with all proceeds flowing to its farmer-owners. To accomplish this, Farmers Rice owns and operates three rice mills and four drying and storage facilities throughout the Sacramento Valley, where most of its rice is grown. Today, Farmers’ Rice is California’s largest rice marketing entity, representing nearly 25 percent of all rice marketed from California. More than half of the rice processed at Farmers’ Rice is marketed domestically and the remaining is supplied throughout the world, to up to 65 countries.