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Peanut price increase too little too late

Peanut price increase too little too late
Peanut posted price up $200 in two weeks. Increase is result of aflatoxin in the Southeast. Texas farmers switching to cotton.

Two significant price increases for peanuts in consecutive weeks will do little or nothing to encourage Texas peanut producers to add acreage.

“Even with $850 runners, Texas won’t see a significant increase due to the drought,” says Shelly Nutt, executive director, Texas Peanut Producers Board, Lubbock.

“And it’s too little too late,” she says. “Farmers have already gotten their budgets set with their lenders; cotton ground is being prepared for seed and, at this time, I doubt that half-a-dozen farmers will change their plans.”

She says recent USDA peanut planting estimates are off the mark, based on what she hears from growers and seed suppliers.

“USDA came out with an estimated acreage of 160,000 acres, which is ridiculous. Where in the world did they come up with that? We based our 2011 budget on 80,000 acres.”

The recent price jumps result partly from more of the 2010 peanut crop going to crush because of aflatoxin in the Southeast. “Supply is tight,” Nutt says.  “Manufacturers are finally realizing that if they don’t come to the plate with a fair contract, farmers will grow something else. Unfortunately, they’ve waited too late. And it hasn’t rained in over 5 months.”

National Posted Prices increased by $100 a ton the week of April 27. That followed a $100 per ton increase from the previous week. Posted prices include:

  • $849.54 per ton for Runner peanuts
  • $841.68 per ton for Spanish peanuts 
  • $853.06 per ton for Valencia peanuts
  • $853.06 per ton for Virginia peanuts
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