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Georgia peanut losses not enough to influence markets

Peanut buying point in Georgia
Buying points in the heart of Georgia’s peanut production area have been idled by power losses and damage from Hurricane Michael.
Burdensome peanut supplies that have built up from recent crops indicate adequate supplies.

Southwest Georgia peanut losses from Hurricane Michael likely will not be significant enough to affect markets, says Tyron Spearman, executive director of the National Peanut Buying Point Association.

EDITOR'S NOTE: This story contains an update near the bottom.

Spearman says the burdensome supplies that have built up from recent crops indicate adequate supplies. “We have an oversupply of peanuts,” Spearman says, “1.3 million tons to carry forward, and we need only 500,000 to 600,000, so we will end up with nearly 1 million tons of surplus stocks.”

He says the storm will reduce production for southwest Georgia, southeast Alabama and the Florida Panhandle, “but not enough to affect prices.”

Infrastructure damage, however, could affect delivery and processing, Spearman says. “A GFSIS survey shows as of Sunday morning (Oct. 14), 52 buying points in southwest Georgia were without electric power, and consequently GFSIS is not able to grade and inspect the peanuts.” By Tuesday (Oct. 16), that number had dropped to 24 buying points without power. “We’re moving in the right direction,” Spearman says.

“Georgia had harvested about 40 percent of the crop before the hurricane, so we have some good peanuts in the pipeline.”

Buying points still without power cannot dry peanuts that farmers had picked before the hurricane. “Most of these are in deep southwest Georgia, which took the brunt of the storm,” Spearman says.

“The hurricane exposed some vulnerabilities in the Georgia peanut industry. “Michael plowed right through the gut of the heaviest concentration of peanuts in the state,” he says. That area in southwest Georgia produces 80 percent of the state’s peanuts. “Georgia produces 50 percent of the nation’s peanuts,” Spearman adds.

Farmers are looking for options. Some will dig peanuts and let them dry in the field to 10 percent; others will look for facilities outside their usual areas to transship peanuts.

“We’re trying to get farmers to delay digging peanuts if the crop is in good shape,” Spearman says, to allow buying points to get back online.

Not all in good shape

Not all of the crop still in the ground is in good shape, he says. “The crop left in the field may be in crisis. Wind beat up the plants so bad we are looking at crop collapse. Those peanuts need to be dug.”

Spearman says several peanut manufacturing plants operate in the area hit by the hurricane, and those facilities are having trouble with product delivery. “Peter Pan in Sylvester, produces 100 percent of the brand’s peanut butter. They are having trouble getting peanuts in.” Other plants in the region are also experiencing peanut delivery problems.

Update Oct. 18, 11:30 a.m.: In the Oct. 17 version of this story, Tyron Spearman said it was difficult now to get truckloads of raw shelled peanuts out of the storm zone and was stated in saying that a JIF plant in Kentucky couldn’t get enough trucks to bring in peanuts. Representatives from JIF Oct. 18 said the Kentucky plant has an ample supply of raw shelled peanuts and doesn’t use trucks to haul peanuts.

“For now, buying points are trying to figure out how to get one dryer going,” Spearman says. “But we have assurance that if we get peanuts ready, the inspection service will send a team to grade them.”

Spearman says buying points need to photograph and record hurricane damage to use as support “should any assistance is available.”

After the 2018 crop is harvested, delivered, shelled and graded, Spearman says, “we still have to figure out what to do with 1 million tons of surplus peanuts.”

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