Cutting out a middleman or two may be the answer to improving profit potential for Texas rice producers.
“We're behind an eight-ball with rice in Texas,” says Paul Wleczyk, a rice, cotton and grain producer from Rosenberg.
Wleczyk says jumping past the first rung or two of the rice industry infrastructure ladder puts a little more money in farmers' pockets. He built storage and drying facilities in 1997 to reduce drying, handling and storage expenses, which he says run close to $1.25 per hundredweight.
“We have to do this to grow rice profitably in Texas,” he says. “It costs 25 cents a hundredweight just to haul the rice to the dryer and we have to invest in a street legal truck to carry the rice and we can't hire just anybody to drive it.”
Wleczyk usually plants about 300 acres of rice and with a good yield, about 8,000 pounds per acre, he'd spend as much as $100 per acre to haul and dry the crop at commercial drying facilities.”
“That adds up to about $30,000 per year. I'm 44 years old and if I farm another 20 years I'll have spent $600,000 on hauling and drying rice. The economics do not work out. I have to reduce those costs.”
He says Texas rice production was built around the commercial drying industry. “So a lot of the industry doesn't want to think about cutting out commercial dryers, and it may not work for every grower, but I've cut all the costs I know how to in production, but owning my own bins is an advantage.”
Wleczyk says blowing air on harvested rice will drop moisture to just more than 17 percent. “I'll buy 250 gallons of propane a year and will not use it all up. I figure drying costs at 15 cents per hundredweight but I'll be surprised if it costs that much. That does not include the cost of the bins. That's a big factor.”
He figures commercial storage costs about 45 cents per hundred for five months, 18 cents for two.
Wleczyk says storing and drying rice is no different from what other commodity producers have done. “With commercial drying, by the time money gets back to the farm, there's not much left.”
Wleczyk says the rice market improved a bit in 2003. “That helps but we still have to cut expenses as much as we can.”
The farm program also hurts rice producers, he says. “Payments are tied to the land so landowners can receive payments if we grow rice or not. That's wrong. This is not a good program for rice farmers. To stay in business, we have to own our own bins and get some changes in the program.
“Currently, we're taking a lot of risk for a few dollars.”
He says rotation helps. “Cotton is a good rotation option with rice. We usually plant corn, too, but we planted maize this year.”
Switching herbicides with the alternate crops improves weed control. “We went to cotton five years ago to help with red rice control. I'm also considering Clearfield Rice, if the yield is there.”
He says the technology fee also will be a factor in his decision. “I may use Clearfield in fields with a history of red rice infestation. I have enough red rice to be watchful but not enough to affect yield yet. But it doesn't take a lot.”
In fields where he planted rice two years in a row the weed was worse in the second rice crop.
He hopes Clearfield will produce yields close to his mainstay, Cocadrie.
As Wleczyk studies production options, he's looking for ways to reduce costs and give him the best opportunity for a profit. Taking control of as many functions as possible, he says, at least gives him a reasonable chance.