In the past I have written about the impact of energy costs and
a strong Asian price on the U.S. rice farmer. Energy costs over
the last two years have raised the production costs of U.S rice
farmers by at least $1.75 per hundredweight. The other fly in
the ointment is the rising price of Asian rice and of Brazilian
rice as well, which affects both medium and long grain prices
globally.  As Asian prices rise, the amount of loan deficiency
payment (LDP) to the farmer decreases. The LDP is one of two
variable subsidies for rice. I expect that the LDP may be zero
next year because of strong prices in Asia.  Our measure of
rough rice prices in key trading countries is at about $8.50 per
hundredweight or about $2 per hundredweight over the U.S. loan
rate. I expect that level in Asia to rise, not sink in the next
six months.  The other variable subsidy is the counter-cyclical
payment. It is can be as high as $1.65 as it is calculated at
the difference between a $10.50 “target price” and $8.85 per
hundredweight.  It