After 90 Years, Riceland Still Powers Arkansas Rice Industry

by Luke Jones  on Monday, May. 21, 2012 12:00 am  

Locals call Riceland Foods Inc. of Stuttgart a cornerstone for the economy of its hometown and the state's rice industry as a whole.

"It's the one thing we can always count on," said Stephen Bell, executive director of the Stuttgart Chamber of Commerce. "We're able to do a lot of economic development and recruitment with the knowledge that we're starting out with a solid base."

Riceland's not going away, Bell said, and that seems evident in the company's performance. Bill Reed, vice president of corporate communications, said the company had sales of $1.1 billion during its fiscal year that ended July 31.

(Click here for a list of the largest private companies in southeast Arkansas.)

"Distributions to our farmer members were $692 million," Reed said, adding that those numbers were about the same as fiscal 2010.

Reed said each year Riceland's members deliver about 100 million bushels of grain to the cooperative's 32 grain facilities. More than 1,500 employees work for Riceland, with 1,000 in Stuttgart alone. Reed said Riceland would begin marketing field corn for livestock and poultry later this year. He said the decision to market corn was based on increased acreage in southern Arkansas. It will mostly be marketed in Riceland's southern receiving area near Dumas and McGehee.

(Click here for a sidebar on how Riceland's business model works.)

"Our business strategy is growth with two key components," Reed said. "One is growing our core business of grain orientation and storage, rice milling and soybean processing. The second is to develop value products with greater growth margins to build on our success."

Warren Carter, director of commodities and regulatory affairs at Arkansas Farm Bureau, said Riceland and Producers Rice Mill Inc., also in Stuttgart and also one of the state's largest private companies, account for about 70 percent of the rice purchased in the state.

"Riceland is certainly the largest rice miller in the country," Carter said, "possibly one of the largest, if not the largest, in the world."

Carter said the state had about 3 million acres of soybeans in the state, with rice filling up to 1.5 million acres.

"We've seen a little bit of a decline in acreage," Carter said. "We typically run about a million and a half acres, but last year with flooding it got too late to plant rice. We don't know what the final count was, but it's still in the neighborhood of 1.1 million."

Carter said about half the rice produced in the U.S. is produced in Arkansas, and while the country represents only about 2 percent of worldwide rice production, it also represents 20 percent of the worldwide export trade.

"We're a very important player in the world market," he said. "Riceland is certainly a significant reason for that, both in milled and rice exports."

Bell said Riceland was the single largest employer in Stuttgart, occasionally being upped by Lennox Commercial of Richardson, Texas, an air conditioning manufacturer that has a factory in the town. Riceland's Stuttgart facilities include three rice mills, a soybean processing facility, an edible oil refinery and its headquarters. The current jobs are in receiving, conditioning, storing, transportation, processing, packaging and marketing of grain.

"You do see a fluctuation in the Lennox workforce as the economy goes up and down," Bell said. "But the workforce at the mills stays pretty consistent."

Bell said Riceland had been a force for stability in the town. As technology evolved through the 1970s and onward, some labor was replaced by automation, but Bell said the cooperative replaced those lost jobs with higher skilled positions. "They still have seasonal help," Bell said. "When the harvest arrives, they not only mill the rice, they market the rice with farmers. It's a pretty substantial white-collar work force."

In fact, Bell added, about a quarter of everyone who lives in Stuttgart has some tie to Riceland.

"Either they work there or their spouse works there," Bell said.

Riceland is so critical to the city that it's become a part of Stuttgart's popular culture:

"It's important enough to us that the name Riceland is in the Stuttgart [High School] alma mater song," Bell said, "'over the fields of Riceland.'"

Reed said Riceland was devoted to the cooperative model.

"With the conclusion of the 2011 fiscal year, we completed 90 years as a farmer-owned co-op," he said. "We saw that as a milestone and a good time to remember why Riceland was formed by farmers. It was created to prove the marketing power of farmers, to reduce costs, to enhance marketing opportunities and to improve products and services. Those are all the same principles that support co-ops today."

 

 

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