Third grade is oftentimes the first year standardized literacy assessments are mandated. In turn many policies aimed at improving literacy have focused on third-grade test scores as a key indicator. Yet literacy struggles begin well before third grade, as do racial and socioeconomic disparities in children's literacy skills. Kindergarten readiness assessments provide a unique opportunity to better understand the emergence of literacy disparities. We use unique kindergarten literacy data from nearly every school district in Virginia to document the relationship between children's early literacy skills and their later reading proficiency. Comparing children with similar literacy skills at kindergarten entry, we find significant racial and socioeconomic differences in the likelihood a child is proficient on their third-grade reading assessment.