Peanut prices made a significant jump from Feb. 9 to Feb. 16, but contract offerings from shellers are still too low to tempt most farmers to switch acreage from cotton, which at $1.30 per pound offers better profit potential than peanuts at a price lower less than $750 a ton.

Prices for the last two weeks are:

02/16/11

02/09/11

“The increase in price is definitely related to competition for acres and cotton prices being so high,” said Shelley Nutt, executive director, Texas Peanut Producers Board in Lubbock.

“Dr. Stanley Fletcher (professor, agricultural and applied economics, University of Georgia) says that it would take a $690 a ton contract on peanuts to equal $1 cotton.  For every 10 cents cotton goes up, add $30 to the peanut price,” Nutt said.

“So with cotton up to $1.30, we need a $750 contract offer. And we’re still not there. Offers for $650 were ignored by peanut farmers, and who can blame them? Cotton is less risk, has better crop insurance, fewer inputs and is worth more. It’s a no-brainer not to grow peanuts—unless the shellers get the contract offers to $750 to $800 a ton.”

Competition also could play a role, she said.

“Argentina is growing very high quality peanuts and has the infrastructure in place to transport and process peanuts, so my worry now is that shellers and manufacturers will start importing Argentine peanuts for much less than we can afford to grow them here. (A representative from) a major manufacturer representative called wondering what it would take to get farmers to grow peanuts and when I told him, he stated that his bosses had him in Argentina not long ago checking the crop and said they will more than likely start buying from Argentina.”