America's rice harvest is forecast to fall to its lowest level in 33 years. CBOT rough rice futures, the benchmark for US long-grain rice before milling, are surging higher at the end of summer after rising 69% so far this year.

USDA forecasts total production at 158.2 million hundredweight, roughly 23% below last year's 206.7 million. Harvested acreage is projected at just 2.057 million acres, the lowest since the 1972/73 season. 

"While beginning stocks are raised 4.6 million cwt to a 40-year high of 58.4 million cwt, production is reduced 0.2 million cwt to 158.2 million, a 33-year low, as a reduced forecast for harvested area more than offsets a higher yield," USDA wrote in a report.

The good news is that a meaningful supply buffer remains, with the year beginning with 58.4 million hundredweight in inventories, a 40-year high. This will provide a cushion against any lost production.

Even with that buffer, USDA expects ending inventories to shrink to 40.4 million hundredweight, down 31% from a year earlier. Its forecast for the all-rice season-average farm price is $14.90 per hundredweight, about 20% above the previous year.

USDA said there was a "notable shift to a relatively tight U.S. supply situation" from last year's harvest to this year's.

That is being reflected in CBOT rough rice futures, which have jumped 69% so far this year to $16 per hundredweight and could be on track to test the $19.65 high reached in the summer of 2023.

CBOT tracks US long-grain rough rice. International prices, especially in Thailand, have also risen.

Goldman analysts estimate this El Niño could push global food commodity prices up more than 15%.

It is not a great sign when the grain that feeds the world is soaring in price in multiple regions, suggesting further food inflation pressure on household budgets.