A Louisiana native, Danny Kennedy joined Riceland Foods in 2000 after 16 years with Monsanto, the agricultural chemical and biotechnology company, where he had jobs in domestic and international marketing, as well as strategic planning. He has a bachelor’s degree in agricultural economics from Mississippi State University in Starkville, and an MBA from Northwestern University in Evanston, Illinois.
Kennedy became CEO of Riceland in 2004, succeeding Dick Bell.
Could you explain how Riceland operates as a cooperative?
Riceland is truly a 100% farmer-owned cooperative. If you go back almost 100 years, there was a group of rice farmers in Stuttgart who raised a rice crop, and they collectively sent the rice down to New Orleans to a broker who was supposed to sell it on their behalf. They got a letter back from the broker saying the value of the rice didn’t cover his cost. The farmers knew they had to get into the processing business to make their farming business model work. They united, pooled their resources and formed the Arkansas Rice Growers Co-operative Association, which later became Riceland Foods. Farmers united to pursue better markets, and sustainable value is why the co-op was formed and why it exists today.
Last year the rice industry gained access to China markets after years of trying. Are China-bound exports on hold because of the trade war, and is Riceland coping?
Riceland is coping just fine. Our challenges with exports to China are not limited to just trade negotiations, but we are delayed as a result. It doesn’t make me lose my excitement for the opportunity in China, because I think it will be very unique for the United States.
One of the major reasons the Chinese consumer will want to buy American rice is because of food safety concerns in China. Instead of shipping bulk rice, where we’re competing with many other low-cost countries, this would be an opportunity for us to actually package rice in the United States and ship it to China for consumers. It would primarily be considered a luxury rice item.
The Chinese market holds great potential for the U.S. rice industry, and we are working hard to position Riceland to be a major player in this new market.
How will the wet growing season on Arkansas farms affect the industry this year?
Arkansas normally plants somewhere between 1.2 million and 1.6 million acres of rice. It is a short crop with less acreage [this year], making it tough on farmers and tough for those who have assets dedicated to handling rice. Farmers faced a wet spring in 2019 after fighting a wet fall in 2018. This put them behind. The impact is less rice, roughly 29% less, from what was planned. Since the crop is short, it should be bullish for prices this marketing year. Hopefully, our farmers will be able to get a lot of land work done this fall to prepare for next year. Soybean prices this coming year, which are directly tied to China negotiations, will likely be a factor in how much rice gets planted in 2020.
Does Riceland have a position on genetically modified crops and foods?
The consumer, in certain segments, prefers non-GMO products. We honor that commitment with our customers. There is no commercially grown GMO rice produced in the U.S.
However, we do believe the advancement of technology is going to be critical to keeping farmers in business in the long term. We are very mindful and make sure we listen very closely to what our customers want so that we create products that meet and exceed their demands.
