Peanut Prices May Skyrocket as Much as 30 percent

Peanut industry experts predict a short harvest of peanuts this fall will lead to big price jumps for peanut butter and other peanut products, perhaps as soon as Nov. 1. The manufacturers of Jif brand peanut butter, which hold 30 percent of the market, anticipate a 30 percent price increase. A historic drought this year in Texas and parts of Georgia are a major reason why.

“Unfortunately, consumers will be seeing what happens when bad weather hits our farmers,” said M.L. Everett Jr., a Southampton County peanut grower and Virginia Farm Bureau Federation board member. “Sometimes there is a shortage of raw commodities for items like peanut butter.”
With shortages come the opportunity for higher peanut prices for farmers, but not until next year. Most peanuts are sold under contracts signed the previous winter.

“I would say in Virginia probably as much as 90 percent of the crop was already under a contracted price, so we certainly aren’t able to take advantage of any peanut price increases at harvest time,” Everett said. “But I would suspect the 10 percent that wasn’t contracted could be sold at a premium this fall.” Everett said the increase could amount to as much as $150 a ton over the contract price of $650 to $700 a ton.”

A year ago Virginia peanut farmers were looking at lower-than-usual prices due to a glut of peanut supplies on the market. Virginia peanut plantings dropped this year as contract prices remained low and cotton prices hit record levels. The two crops compete for the same acreage in Southeast Virginia.
As of Sept. 21, Virginia’s peanut crop is estimated to total 54.4 million pounds from 16,000 acres, according to the National Agricultural Statistics Service. Peanut yields increased about 100 pounds an acre from the previous estimate in August, to 3,400 pounds an acre.

But some of Virginia’s cotton crop fared poorly after Hurricane Irene slammed the state. Everett said he’s struggling to harvest cotton from plants that were twisted and pushed over by storm winds. Production still will be up from last year, as Virginia growers harvest 115,000 acres, an increase of 33,000 acres from 2010.

via Va Farm Bureau

Comments

  1. Peanut butter and banana sandwich says:

    Does this mean that, even though I am working for peanuts, I am actually getting a raise?