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In general the peanut markets
have been very quiet the past few weeks. Little to no offers on '07 Crop and
certainly no offers on '08 Crop.
Farmers are advising that some additional acres (planned for peanuts) have been planted in corn. The price for corn topped $6/bl. last week and some acres were planted in corn. The weather was good and University of Georgia planting guides allow planting of corn through April 15.
There is no way to tell how significant this increase in corn may be, but any reduction in peanut acres is not good.
Export Peanut numbers were released by FAS for February. They show total peanut exports up 72% Feb '08 vs. Feb '07. For the crop year Exports are up 14.7%. Most exporters agree, this trend will continue. The peanuts have already been sold and the numbers will come in as they ship.
This continues to bring concern that supply will be tight on peanuts as we move through the summer and it continues to be very hard to get price indications from any Sheller. The shellers are waiting to see how many acres are planted and shell a few more tons to see how yields come out. We may see some additional offers on '07 and '08 crop in late May or early June.
Let me know if you have any questions or comments.
Peanut shipments seem to have slowed during
the month, as we think price increases announced by many peanut manufacturers
have allowed early orders from their customers, and an eventual slow-down of
product movement. Many industry pros think industry consumption numbers will
slow some, but will not show up until later.
The Southeast growing region continues to build back water reservoirs during the winter months. They had their third consecutive month of 5 inches or more of rain. However, some weather specialists still predict a warmer, drier Spring starting during the month of March.
The biggest talk over the past month has been "What will peanut acreage be for 2008 crop?" Recent commodity prices have seen Wheat increase to over $24 per bushel for a few days once limits were removed. We have seen Corn just short of $6 per bushel for new crop, Soybeans at just less than $15, and now even more critical, have just seen Cotton reach almost $1 per pound.
Peanut professionals reported last week that they had canvassed the specialists in all peanut states for their expected ranges of increased peanut acres, and we could expect 17.6 % maximum increase. However, this was using the specialists' highest number in their range for their state, and was prior to the commodity markets latest flurry. At the same time, Tyron Spearman, a respected Peanut analysist, reported in a recent industry newsletter that the current number of peanut producers is still declining in our country.
Peanut Corp does not think that we should question the "extra" acres of peanuts as the number of peanut producers continues to dwindle. They also think we will continue to "be alarmed" as other commodity prices increase, especially in relation to peanuts, and we will wrestle with this question right up until planting.
Growers today are way more versatile, and can be more diversified than many businesses. They are also required to be better businessmen than earlier years, and most are in it for the long haul. They will plant what makes sense, and they will normally plant some regular percentage of their farms with crop rotation demands in mind.
We think our South East peanut grower will plant a reasonable amount of peanuts in his mix. However, with cotton in the $.94-$.98 per pound range, many growers will put their "extra" acres in cotton. We believe this "extra" part can only be 15-25% of his acreage normally, that he can afford to sway from his regular rotation plans. And the grower's equipment and labor requirements have some affect on his decision, as well.
The real problem comes with peanuts, in that we think we all felt like our largest acreage increase might come from the SW. However, high cotton prices will also affect this peanut growing region, and maybe even more drastically than the SE.
The shelled market is too quiet to try to publish prices that we know to be true at this time. And we suspect that most shellers and buyers are too concerned about peanut acres for 2008 crop to talk much prior to peanut planting time is over. I will say though that we continue to see strength in many export markets.
The peanut market continues to be an
unstable market. One thing for sure is that the Major Shellers are not going to
let this market slide backwards and in fact continue to be buyers from smaller
Shellers and currently are completely off the selling market ...again....
Briefly, the crop conditions (moisture wise) improved dramatically in the SE and the V/C areas. However, it is too soon to tell if the rainfall had a negative effect on the quantity and quality. Most acres dug and which took the brunt of the rain are just now coming in to the buying points. Other fields that had not been dug are in the early stages of field drying and combining. This should be a big week as far as digging and combining go as weather forecasters predict clear weather through the start of next week. The only possible trouble would be from the Tropical Storm Noel but predictions are for it to move out into the Atlantic. As of today the FSIS is reporting around 1.1 million tons delivered. The crop estimate is showing 1.7 million tons so there is still tonnage to go.
As for the S & P Report, the numbers are as follows:
Peanut Candy - Up 1.5% from previous month; Down 16.1% from same month last year; Down 17.7% for the year
Snack Peanuts- Down 5.7% from previous month; down 7.9% from same month last year; Down 2% for the year
Peanut Butter - Down 14.4% from the previous month; Down 9.3% from same month last year; Down 9.8% for the year
In Shell - Down 14.2% from the previous month; Down 20.1% from same month last year;; Down 10.5% for the year
Total - Down 10.8% from the previous month; Down 10.8% from the same month last year; Down 10% for the year
We believe this is yet another indication of higher prices coming into play or not being able to obtain peanuts on a timely basis. Probably a combination of both.
The peanut market has been at a stand still.
The only difference between today’s market and the market of 2 months ago is
that the supply is getting tighter and tighter, thus prices are increasing
rapidly. It is no longer a matter of where the market is but now a matter of
what one wants and what one can get.
Argentina still has some 2007 crop, but most probably up to 80% of the crop has been sold. Argentine shellers have not been offering any goods for quite some time. China did not have the bumper crop that everybody was expecting. Quality of the early peanuts is not good. Chinese exporters are worried about exporting to Europe because of tight export controls by CIQ. Prices on the Chinese domestic market have risen sharply. The US crop definitely seems better than once predicted but it is still a small crop that might be just sufficient to supply the US domestic demand and part of the export demand. Not only will there not be any carryover next year, but the market could end up short by midyear next year.
The market will not come down for the next year as there is barely enough supply for the demand. Prices can only go up. Not only are energy prices going up, but freight rates are going up. And if this was not enough, other competing crops’ prices are going up and they are at all time highs making it difficult to entice farmers in all major peanut producing countries to plant peanuts. History has shown that high prices mean dramatic increase in plantings, but because of the high prices on other crops, one can expect probably at best an increase of 10, maybe 15% on peanuts in the USA and Argentina. Plantings could easily be exactly what they were the previous year. Whatever increase Argentina and the US have, it will only cover the demand. It is very unlikely that stocks will be replenished. This means that prices will most probably remain firm for quite a while. It is unlikely that the market will see any relief in the prices for the next 12 to 18 months. After that, provided all major producing origins have bumper crops, prices could come down some. Don’t expect a big drop in prices. The other side of the coin is not to forget potential crop problems that obviously would be disastrous considering the lack of safety stocks anywhere in the world.
The Peanut Stocks and Processing numbers are
Peanut Candy - Down 9.4% compared to July 2006; Down only .8% for the year
Snack Peanuts - Down 17.1% compared to July 2006; Down 8.6% for the year
Peanut Butter - Down 8.2% compared to July 2006; Up 2% for the year
Inshell Peanuts - Up 17.8% compared to July 2006; Up 15.6% for the year
Total - Down 10.7% compared to July 2006; Down 1.4% for the year
The past month has shown a continued trend to rising prices so it is not surprising to see most categories down for the month. Peanut supplies became tight as shellers pulled off the market to ensure they could cover sales. There was an absence of any farmer stock contracting as the weather got drier and drier. Most of the month was spent with extreme heat and humidity in the SE and V/C areas with very little rain. Manufacturers needed peanuts but could get only limited supplies.
The cold storage report came out recently but only reflected a reduction of 7 million pounds. There was actually a 14 million reduction in the V/C and SE but a 7 million increase in the SW netting only a 7 million reduction. It appears there are enough peanuts to get the industry into the new crop but the question is whose hands are they in.
As for the weekly crop conditions, the most recent report reflected slightly worse conditions in the SE and the SW but an improvement in the V/C. However next weeks report should reflect a drastic improvement in both the SE and V/C areas with good rainfall reported falling in those areas.
While we did not get the general rainfall most were expecting over the Labor Day weekend, there were rain showers in the Southeast. More importantly, there were cooler temperatures and mostly cloud cover that gave a feeling of relief. New Crop Harvest is underway and although there has been very little harvested, the general feeling is what has come in looks good. What will really be the determining factor is if they can have a warm fall with plenty of rainfall to help the dryland acres that started so poorly. If that occurs they should have a very decent crop. The next concern will be the quality of the crop.
Rainfall seems to be drawn like a magnet this year to the Southwest. They could set records on yields if the sunshine returns.
In the V/C areas, everything is pointing to a good harvest. They have been a little shy on the rainfall but seem to get it just when they need it.
The industry enters this year (August) with 326,000 less Farmers Stock Tons available than last year. If the last crop estimate proves accurate then they will have another 27,000 fewer tons produced. Quality will be the key. If quality proves good, we should be able to make it to the 2008 crop. Prices will remain firm and may hurt consumption but we will have enough peanuts. Next year (2008) will be where we will need to get more acres planted, but the determining factor for that will be winter wheat, corn and beans. Prices still look good for those commodities so it looks like we are entering a period of much firmer prices for peanuts
Peanut Production is forecast at 3.37 billion, down 3 percent from last year’s crop and down 31 percent from 2005. Area for harvest is expected to total 1.16 million acres, unchanged from June but down 4 percent from 2006. Yields are expected to average 2,909 pounds per acre, 35 pounds per acre above last year. Planted acres, at 1.19 million, are unchanged from the June estimate but 5 percent below 2006.
Specifically by area, production in the Southeast States (Alabama, Florida, Georgia, Mississippi, and South Carolina) is facing extreme drought conditions throughout most of the States. Virginia-North Carolina production is forecast up 9 percent from last year’s crop. Southwest peanut production (New Mexico, Oklahoma, and Texas) is up 18 percent from 2006.
historically moved pennies from crop year to crop year. This year we have seen
it move dimes and quarters. This is happening for multiple reasons. Firstly the
country has ethanol expansion which convinced farmers to plant more corn acres
on good, irrigated peanut land and we put more peanut land into dryland acres.
Then the industry decreased peanut plantings to plant more corn and cotton and
now, they have delayed planting their dryland acres hoping for enough rain to
soften soil and allow balance of crop plantings. Then the end of May came and
farmers had to plant in order to qualify for crop insurance....and still no
rain. A further worry is that some farmers will plant strictly for insurance
only and thus instead of planting 160LBS of seed per acre may plant just 50
or 60 LBS and decrease input costs in order to limit expenses and not throw good
money after bad. Obviously this would severely cut dryland acre yields and even
if the rains do come later, yields are adversely affected in the SE. Wow, what a
Condition of the USA crop is mixed. SW and V-C is OK, but the SE is the real problem. The drought conditions in Georgia are the worst in 50 years. Of 159 counties in the state, last week 74 were rated in extreme drought and 79 in severe drought. The irrigated crop in the SE is planted and getting at least 13$ per acre costings of water every week and concerns are that irrigation ponds are being drained and they still have all Summer to water. Farmers are not interested in contracting 2007 crop with the sheller so the market is at a standstill with no sellers.
Lets look at numbers and make a very conservative estimate.....................if we look at dryland acres in Ga (65%), Fla (70%) and Ala (95%) and calculate vs. planted acres 2007 crop estimate in these states we are at 780,000 planted with 553,000 dry and 227,000 irrigated. Plug in 2006 yield on irrigated acres for these 3 states (2874LBS per acre) and lets just conservatively deduct 25% yields on dryland this year a number can be calculated of 922,198,075 tons short tons produced. Add balance of States at 2007 projected acres and last year yield comes to 528,816 for total USA crop of 1.451 short tons vs. 1.737 last year (decrease of 16.5% from last years crop which was the smallest since 1930.) Now you see why the industry has no. Don’t forget seed needs, the USA needs 1.7 just for domestic usage, so that leaves nothing for Europe to buy and possibly opens up the USA to imports from other origins.
We are in a new era in World supply vs. demand for peanuts. In 2 years we have gone from surplus to deficit for world needs. Argentina will supply Europe because the USA cannot and China will grow a huge crop, but use most of it internally. Most in the industry look for firm markets to continue for at least 18 months or more.
Mid May 2007
A cold front swept across the Southeast Wednesday, May 16, but again the front died out before it reached peanut country in Georgia and Florida and now weather forecast say it could be a week before rains return. Meanwhile irrigated farmers have to irrigate with higher priced fuel to get the seed to germinate. Officials met today with Federal Crop Insurance Companies about the drought. Peanuts and cotton have a planting deadline of May 31, two weeks away. Farmers could get paid under the preventative-planting clause; however, officials said today that if any grower plants in the area, the preventative-planting clause is no longer a valid excuse. Irrigated peanuts are not eligible for preventative planting. Some farmers are considering dusting in the seed just before the deadline to keep crop insurance coverage. Some indicate they may use lower priced seed, No mention of extending the deadline so far. More info to follow.
U.S. peanut producers, responding this year to warnings of an over-supply, dropped production by almost a third, down to 3.37 billion pounds harvested from 1.21 million acres. This is down 31 percent from the 2005 crop.
The national average yield is forecast at 2,780 pounds per acre, down 209 pounds from last year’s peanut crop. Much of the yield drop is being blamed on drought conditions experienced throughout the U.S. Peanut Belt this year.
Production in the Southeast states, including Alabama, Florida, Georgia, Mississippi and South Carolina, is expected to total 2.36 billion pounds, down 30 percent from last year’s level. Expected acreage for harvest, at 924,000, is down 23 percent from 2005. Yields in the region are expected to average 2,550 pounds per acre or 258 pounds below 2005.
In Virginia-North Carolina, peanut production is forecast at 339 million pounds, down 4 percent from 2005. Expected acreage for harvest, at 101,000, is down 14 percent from last year. Yield is forecast at 3,352 pounds per acre, up 352 pounds from 2005.
continues hot and dry in the SE and SW. Certified acres on the 2006 crop were
reported down 29.1% vs. 2005. This combined with the fact that shellers are, at
best 50% covered with priced farmer stock for the 2006 crop has heated the
market. Shellers in an effort to hedge their 2006 position have decided to
redeem all the good quality 2005 crop. (no big forfeitures for the SEAM to sell,
cheap) Shellers got active in the market buying 2005 shelled goods. There are
three main reasons for the concern on peanuts and in particular; Jumbos; 1) The
stressed and immature crop will likely yield less Jumbos, 2) The reduced acres
in Virginia type peanuts will likely increase demand for Jumbos, 3) Carry-in on
Jumbos is tight. The Repayment Rate has worked its way up to $342.43/ton
The rate of redemption from the loan has increased. As of Aug 1, 2006, there are 464,279 tons in the Loan.
Certified acres have been reported at 1,175,500 down 29.1% vs. 2005 crop. This is down from the June 30 estimate of 1,298,000. This is the smallest acreage since 1915. Weather continues hot and dry in the SE and SW. In the process of correcting rotation problems, 60% of the peanuts in GA are not irrigated.
Alabama has already declared 49 counties natural disasters (drought and heat). This qualifies farmers for emergency loans. There are reports of cotton and peanuts being plowed under, after insurance claims were approved. Note: we know the certified “planted” acres, but how many will be “harvested”?
John Beasley, UGA, reported at the National Buying Point Meeting (8/2) that the rain patterns were tracking almost identical to 1986. In 1986 the average yield was 2450 lbs / ac. in GA and 2408 lbs/ac for the US. In 1986 there was no W. Tx. Peanut growing area. Let’s say they average 2500 lbs /ac. This would produce 1,469,375 tons. It all depends on the rains in Aug and early Sep. For the record, the Jumbo yield was 231 lbs/ton.
In the last few days, all the shellers have pulled off of the market for Jan ’07 forward, 2006 crop sales. They are uncertain of supply, quality and the price they will have to pay for the balance of the farmer stock they will need. Other than that, every thing is great.
Today, 2006 crop Jan forward, it would take $.43 JR, $.41 MR, $.40 R/S and $.38 #1’s for anyone to even listen. It is not believed that they would sell and buyers seem to be willing to wait at these levels. No offers on Virginia type peanuts.
For the 2007 Crop they are scheduled to loose the storage and handling payments. This is worth 3-cents per lb. on the shelled peanuts. There is still a possibility that this funding could be restored. For planning purposes, plan on a 3-cent/lb. increase in cost starting Jan ’08. More should be known by the end of the summer.
It looks like prices will most likely be higher for the 2007 Crop. Here are the main reasons:
- Reduced carry-in from the 2006 crop
- Farmers will demand higher premiums to plant ($25 +/ton). This is due to fuel cost, other input cost and losses incurred in the 2006 crop, due to poor yields.
- World demand continues strong.
In conclusion, lets hope for some rain. August is a critical month for putting on peanuts. Fill-in for 2006 crop could be expensive. We will monitor the crop and will know more in the next 30 days. It will be a good idea to be prepared with your needs if peanuts become available.
Over the passed few weeks, we have seen the major peanut market factors continue to firm. This market and indicators are moving in the BULL direction. Planted Acres down, maybe 30%. Why are 2006 acres down from 2005 crop?
1) Yields on cotton were much better than peanuts for the 2005 crop. Farmers assume that same factor for 2006 crop
2) Shellers had Spring Buying point meetings and discussed the large surplus of peanuts, talked about lower contract prices and the possible problem of warehouse space in the Fall. No warehouse space, no Loan.
3) Contracts were $10 per ton premium in the SE and SW only on the first ton per acre. Last year, SE had premiums of $20/ton and the SW had premiums of $40/ton.
4) Very dry during planting time. Many acres of dry land peanuts were not planted due to lack of moisture.
5) Concern for water supply, in the SW. Peanuts need about 28 inches of water and cotton needs about 19 inches. This is also a factor for the SE when fuel prices are so high.
6) Some of the land was out of proper rotation. Farmers made the decision to get land back into proper rotation, this year.
During the Peanut
Congress, several conversations revolved about acres actually planted. It seems
that the SE may be down 25% to 28% and the SW could be down as much as 40%. The
Planted Acres estimate was issued Friday 6/30, acres down 21% from last year.
The general consensus is that acres are actually down 28-30%, this could mean a
crop of 1.7 to 1.8 mil tons.
Drought conditions in the SE and SW. Very hot conditions in the early part of the growing season can reduce successful pegging. EU will have to buy US peanuts for the late summer and Fall, due to stopped shipments from China and a lower volume crop from Argentina.
This could all add up to the surplus of peanuts being reduced to a balanced state in the 2006 crop year. Furthermore, this will likely set us up for higher farmer stock prices for the 2007 crop. These factors have increased prices 3 to 4-cents.
For 2006 crop, additional peanut needs, keep in mind that only 50% of the SE farmer stock is contracted at the $10 premium. Less than 50% is contracted in the SW. Farmers are certainly going to want more for the peanuts, as this dry weather continues. There is very little chance that the market will drop for the balance of the 2006 Crop. Already, shellers are quietly buying un-contracted peanuts at $25 to $45 per ton premiums
Late May 2006
The The 2005
market continues to trade at very low volume and weak prices. There has been
some strengthening in the market over the past 2 weeks, maybe 1-cent/lb. The
Repayment Rate had held steady for 3 weeks but on May 23, the repayment rate
increased $4/ton. Government officials suggest that this is due to the higher
prices on the Market Report.
There are, currently, two markets for the 2005 Crop. Sellers that have inventory are willing to sell at the levels mentioned above. Sellers that would have to redeem peanuts and shell would sell at prices 1.5-cent higher. With the conclusion of the Government Bid this week (13 mil lbs shipping Jul – Sep ’06), it is believed that this will go a long way toward cleaning up the cheaper peanuts.
There is almost 1 mil tons of peanuts in the Loan, compared to ½ that amount last year at this time. The first significant volume (24,600 tons) forfeits at the end of June ’06. This big Loan amount and the Sheller’s recently filed lawsuit against the USDA, may have some impact on how the USDA sets the repayment rate. We will have to wait and see.
The 2006 Crop plantings are well underway. NASS reported, as of May 21, 2006, 54% of the crop is planted. It is believed by some that by the end of next week (Jun 3) they will be 95%+. It is likely that TX acres will be down 40%, the South East may be down 20% and the V/C about even. The dry weather in the South East has stopped some from planting more peanuts. It is reported an unusually high amount of seed being returned.
In spite of the large carry-out (800,000 tons) and the surplus shelling capacity, the reduction in acres, dry weather and illogical repayment rates by the USDA have tried to firm the 2006 crop prices. There has been increased interest from Europe. This is due to quality problems in China and increased prices from Argentina.
Also, 2006 Crop is shaping up to be short on the Virginia variety. This will especially be felt in Virginia Inshell and Large kernels (Ex Lg Vir and Super Ex Lg Vir). Shellers are not offering at this point, waiting to see the final crop harvest.
As far as looking ahead to the 2007 Crop, the industry is scheduled to loose the storage and handling payments. This is worth 3-cents per lb. on the shelled peanuts. Recently, the House attached an amendment that would have funded the Storage and Handling for 2007 crop. On Tuesday May 23, the amendment was disallowed on a “Point of Order”. There is still a possibility that this funding could be restored. For planning purposes, you could plan on a 3-cent/lb. increase in cost starting Jan ’08. We should know more by the end of the summer. In the meantime, thoughts should be towards covering the Oct – Dec ’07 position at current offered prices.
In Summary The 2005 crop market, with the increase in repayment rate and tightening of shelled inventory is likely to firm slightly. 2006 crop (thru Dec ’07), subject to final acres planted, weather, USDA, will likely stay where it is.
The following is
our Market Report on the Peanut Market and the 2006 Crop estimate.
There are two spreadsheets on the 2006 Crop. Click on the links below . . .
Sheet One uses the NASS Planted Acre estimate and the same yield as last year. This has already been adjusted for the reduction in acres in Texas. This shows a Crop Estimate of 2,024,077 Farmer Stock Tons. This would be plenty of peanuts considering we will have about 800,000 tons of carry-in from 2005.
Sheet Two is adjusted for the possible further reduction in Acres in TX. Some have said it could be as much as 40%. The spreadsheet projects 38% reduction is TX and 20% reduction in GA and 24% in OK. This is due to low contract offers, dry weather and the shift to cotton. The reduction in GA is due to lack of contracts and getting the land back into proper rotation. The sheet also calculates about a 10% reduction in yields from the 2005 crop (which was excellent). The yield reduction is due to forecast of drought conditions through the growing season. This shows an estimated crop of 1,772,155 tons. This would be slightly below demand of 1,800,000 tons, but when you add in the 800,000 tons of carry-in there would be enough peanuts.
The carry-out from 2006 crop will depend on Export sales. Argentina is in the beginning of harvest and had some freezing temperatures last week. At a minimum, it will firm Argentina offers and if the US prices will come down 2 to 3 – cents/lb, we will see some sales into Europe.
Today, in Current Crop, there are two current crop markets; The first where Shellers that have inventory to sell (in cold storage or not balanced) The second where Shellers that must redeem to sell.
As the surplus is reduced, the current market will move to the higher levels (up about 2-cents). Therefore, if you see needs for May thru Dec. (2005 Crop) it may be a good time to fill-in. Now, it is possible that the repayment rate can come down and create lower prices, but it would have to drop $26 per ton, for a shellers to offer for less.
Today, for the NEW 2006 Crop (Jan – Sep or Dec ’07) Raw Med Runners are indicated at $.3450/lb. and Raw Jumbo Runners at $.36/lb. Tight spec may be ½-cent per pound higher. The rain this weekend in AL and GA will help ease the planting worries and we will again see a lot of planting this week.
The market for peanuts has firmed over the last 45 days. This has been caused by:
1) Sell-off of 2004 crop, where most of this tonnage is being shipped against 2005 Crop contracts with
2004 crop options.
2) USDA increasing the Repayment rate from $330/ton on 9/13/05 to $343/ton. (most believe that this
will go to $355/ton)
3) Reduced estimates of the 2005 crop to 2.459 mil tons. The general thought is that the actual
harvest will be close to 2.2 mil tons.
have cleaned up their 2004-shelled inventory. Some will be crushed for oil with
the majority to ship against 2005 contracts.
2005 Crop peanut pricing has firmed, as the 2004 crop is cleaning-up. This again is due to the increase in the Repayment Rate, reduction of the 2004 crop inventories and reduction of the 2005 crop estimate.
The harvest is in high gear with the South East 80% complete, Virginia/Carolinas 65% and South West approaching 50%. SE Growers are disappointed with the yields, which are off as much as 20%. They are also seeing some aflatoxin in the SE. Only a few acres were treated with Aflaguard, but it looks like this will be a good crop of peanuts to evaluate. Aflatoxin looks good in the SW.
Yes, 2006 Crop. Talks have been going on with farmers and buying points about 2006 planting intensions. It looks like they could loose much of the increase in acres they got in 2005. Main reasons:
1) Cotton prices up (currently $.62/lb.)
2) Cotton yields were very good this year
3) Peanut yields were off 20% or more from '04
4) Some rotations were shortened to put more peanuts in '05, this will reduce acres available '06.
5) Farm input cost up significantly.
End September 2005
There has been a
significant change developing in the Southeast Peanut market for the past ten
days and the trend continues. Dry weather in the South East (no rain for 5 to 6
wks) has caused the South East crop to deteriorate and the surface of the soil
is so hard dry land peanuts cannot be dug until rain comes to soften the soil.
Irrigated acreage is being dug if ready but yields coming in are averaging from
750 to 1000 LBS decrease per acre on dry land.
A significant decrease in harvested tonnage is expected as it continues into mid-November and additionally, aflatoxin and diseased peanut tonnage will increase too. Late 04 crop deliveries are experiencing high levels of spotting after roasting.
Prices on new crop have gone up. Most of the cheaper 04 crop owned by shellers has been cleaned up and the first peanuts out of the USDA auction have sold for 306 and 311$ per MT. These peanuts will have a large % of weight loss and the quality is suspect on some lots. Also, the USDA on Tuesday the 20th raised the repayment rate again (now up to $340) and it is expected to be back at $355 in the next 3 weeks.
While with this large crop this is not, as yet shaping up, YET as a disaster.... with the Texas and VA crop still in good shape it will cause prices to firm.
The first yield
forecast of 2005 for Georgia's row crops indicate that some yields are down but
yet; some yields are up from last year’s numbers.
Peanut production in particular in Georgia is forecast at 2.39 billion pounds compared with last year's 1.83 billion pounds. If this production forecast is realized, it will be the highest on record. Harvested acres are expected to be 770,000 compared with 610,000 in 2004. The harvested acres are the highest since 1991.
Yields across Georgia's peanut belt are expected to average 3,100 pounds per acre compared with 3,000 pounds last year. The crop also has benefited from the summer weather conditions. Growers have been spraying regularly for disease prevention. As of Aug. 7, the crop was rated 20 percent excellent, 59 percent good, 16 percent fair, and only 5 percent poor to very poor.
The Peanut Crop is progressing nicely. As of July 31, 2005, the U.S. peanut crop is 88% pegging. Last week showed 78% pegging and last year 96% pegging. The 5-year average is 91% pegging. Peanut Conditions are 1% Very Poor, 4% Poor, 21% Fair, 59% Good and 15% Excellent. Last Year’s crop conditions on this same date were 1% Very Poor, 3% Poor, 22% Fair, 53% Good and 21% Excellent.
The June 2005
Planted Acres report was released today (June 30th) by USDA: Peanuts area
planted to peanuts in 2005 is estimated at 1.65 million acres, up 15 percent
from 2004. Area
for harvest is estimated at 1.61 million acres, up 16 percent from last year.
Southeast growers (Alabama, Florida, Georgia, and South Carolina) planted 1.25 million acres, up 25 percent from 2004. The increase can be attributed to provisions in the 2002 farm bill, which resulted in acreage spreading to regions that did not traditionally produce peanuts. Wet and cool weather delayed some planting, but drier conditions in May allowed planting progress to return to near normal rates in much of the area. Crop development progressed behind normal, as peanuts pegging for all States in the Southeast lagged the 5-year average.
Plantings in the Virginia-North Carolina region totaled 113,000 acres, down 18 percent from 2004. Crop development in this region is behind normal due to dry conditions. In North Carolina, the peanut crop had not begun pegging by June 19, and in Virginia, peanuts were only 1 percent pegged. Historically, the crop has been 4 percent pegged in both States by June 19.
Growers in the Southwest (New Mexico, Oklahoma, and Texas) planted 291,000 acres, down fractionally from last year. Two percent of the Texas peanut crop was pegging by June 19, four percentage points behind the 5-year average. Oklahoma peanuts were 6 percent pegging by this late, 11 percentage points behind the 5-year average.
demand for peanuts continues to surge while farmers in the Southeast look for
crop alternatives. The farmers intend to expand 2005 peanut plantings by 12
percent. U. S. farmers indicated that they would plant 1.6 million acres of
peanuts in 2005, which would be the largest planted area since 1994. Continuing
a pattern seen since the passage of the 2002 Farm Act, the share of the U.S.
peanut acreage from the Southeast will rise relative to the Southwest and the
VC. If planting intentions were realized, the Southeast would represent nearly
74 percent of national acreage, compared with 53 percent in 2001.
The report said that the rise in peanut plantings in Georgia is motivated, in part, by the search for alternatives to soybeans, corn and cotton. Area sown to these crops in Georgia would decline by an aggregate 215,000 acres due to a combination of their much lower prices and higher input costs versus the pre-planting period a year ago. If Virginia reduces plantings to 25,000 acres estimated, it would be the lowest on record dating back to 1909.
Peanut farming in the Southeast is mostly in Florida where planting continues. However, Georgia and Alabama continue to delay waiting for warmer temperatures. The average soil temperature in Tifton, Georgia for the week of April 17 was 64 degrees F. Sandier soils near Statesboro were 67 degrees F. and Plains at 64 degrees F. Most planting of crops lags behind normal due to the cooler than normal spring temperatures. Farmers need 3 consecutive days of 65 degrees F. at the 4-inch depth to start planting peanuts. Soil moisture in Georgia this early April was 0% very short, 2% short, 65% adequate and 33% surplus. Last year on this date, soil moisture was 17% very short, 49% short, 34% adequate and 0% surplus. So, farmers are starting off with a better than normal water supply for the 2005 peanut crop in the Southeast.
peanut production has a bright outlook with strong domestic demand and steady
exports, but the 2005 crop could prove to be the first real test of the new
Reviewing this past year, the 2004 crop did not turn out to be as good as 2003 for Georgia peanut producers. During late summer of 2004, the National Agricultural Statistics Service estimated a 3,300-pound per acre average yield for Georgia.
But storms from hurricanes Charlie, Francis, Ivan and Jeanne knocked down Southeastern yields in September and October. Georgia's final 2004 yield estimate was 3,000 pounds per acre. Much of the yield loss was due to delayed harvest as well as flooding and increased disease pressure.
Financially speaking, the lower yield was offset some by higher prices in 2004 for farmer stock peanuts. Marketing contracts offered by shellers were typically $45 per ton above the loan rate or $400 per ton. Seed contracts included a $25-per-ton premium.
Peanut acreage continued to increase in the Southeast and in Georgia in 2004. Producers planted 75,000 more acres in Georgia for a total of 620,000 acres. The Southeast has increased planted acreage to 1 million acres, which is up from 806,000 in 2002. Texas and Oklahoma's acreage continued to decline by dropping to below 300,000, while the Virginia-Carolina Region has steadied at 138,000 acres. U.S. total peanut acreage was 1.43 million.
Total peanut production exceeded 2 million tons again in 2004. The large crop was a result of several thousand late-planted acres in Georgia, and the second-best U.S. average yield on record. The 3,000-pound barrier was broken for only the third time.
This makes two consecutive years of excellent yields. Fortunately, strong demand had coincided with the large crops, and carryover stocks have not become burdensome.
Some believe there is the potential to reach 700,000 acres. This would be another large jump, but it could occur, given lower market prices for corn and soybeans. The cotton market also is lower but net prices - including the LDP - are in the 58 to 60 cents range, making cotton still competitive with peanuts.
Another factor favoring more peanut acres is an increase in fertilizer prices and an increase in seed technology fees for corn, cotton and soybeans. In addition, soybean producers are wary of additional spray expenses in 2005 due to Asian rust.
Peanut food use in 2004 is forecast to be 1.336 million tons, an 8.8 percent increase. Adding 100,000 tons for seed gives a consumption level of 1.436 million tons before exports, crush and residual. Using carryover stocks to meet part of the demand, a minimum of 815,000 harvested acres would be needed to meet food demand projections.
One factor that could change the outlook is the export market. Argentina increased acreage for 2005 and could again compete strongly with the United States for European exports. Or, Argentina could import again into the United States to meet part of domestic demand. We will have to watch to see what develops.
The USA peanut industry seems more excited this year than the last two decades as farmers, buying points, shellers and manufacturers approach 2005. Expansions are being reported in all segments. Consumption continues at a record pace with usage remaining strong with over 14 percent increases. Manufacturers are reporting new plant expansions, new products, orders are up and many plants are running at capacity. More peanut buying points are being established, especially in new growing regions. Orders for new handling equipment are reported up in early January and new warehouses are under construction. The government did not crush a peanut from the 2004 crop; all market loan peanuts were sold to the trade. Exports are beginning to come back as the dollar declines against other currencies, some as much as 25% less than last season. For the first time in many years, the market growth appears to have all segments making money and expanding, again and that has no always been true. This is good news as the farmer is now motivated to plant more peanuts to cover the growing consumption demands.
Peanut Stocks and Processing Report just came out. WOW! Peanut usage continues
to grow. Total edible usage was up 13.10% for October compared to Oct '03. This
makes YTD usage for Candy UP 16.69%, Snack UP 21.92% and P/B UP 9.30%. Total YTD
UP 14.58%. This attributes to continued fairly firm pricing, especially on the
It is felt that this growth can be continued, based on the following:
• Tree nut prices are almost double from last year, which cuts into margins.
• Peanuts remain low cost relative to tree nuts, therefore margins are good.
• Promotion dollars are moving to peanuts. There are several promotions underway and more planned for peanuts
We could see another 10% growth in usage over last years 9.4% growth.
Production is forecast at 4.20 billion pounds, up 2 percent from last month and up 1 percent from 2003. The area for harvest is expected to total 1.39 million acres, unchanged from October but up 6 percent from last year. Yields are expected to average 3,027 pounds per acre, up 55 pounds from October but down 132 pounds from 2003.
Production in the Southeast States (Alabama, Florida, Georgia, and South Carolina) is expected to total 2.83 billion pounds, up 2 percent from October and up 2 percent from last year. Expected area for harvest, at 968,000 acres, is unchanged from October but up 13 percent from 2003. Yields in the 4-State region are expected to average 2,920 pounds per acre, 68 pounds above October but 318 pounds below last year. Yield prospects rebounded from last month after producers were able to fully evaluate the effects of heavy rainfall received from September hurricanes. A record high yield of 3,400 pounds per acre is forecast in South Carolina. As of October 31, peanut harvest was 2 percentage points behind the 5-year average in Alabama and Florida at 87 and 94 percent complete, respectively. Georgia peanut harvest, at 85 percent complete, lagged the 5-year average by 5 percentage points.
Virginia-North Carolina production is forecast at 459 million pounds, up 6 percent from October and up 11 percent from 2003. Area for harvest is expected to total 137,000 acres, unchanged from October but up 3 percent from last year. Yield is forecast at 3,353 pounds per acre, up 176 pounds from October and up 227 pounds per acre from last year. The yields in Virginia and North Carolina are forecast at record highs of 3,200 and 3,400 pounds per acre, respectively. Virginia's peanut harvest, at 98 percent complete, exceeded the 5-year average by 3 percentage points. North Carolina's harvest, at 95 percent complete, exceeded the 5-year average by 16 points on October 31.
Southwest peanut production (New Mexico, Oklahoma, and Texas) is expected to total 916 million pounds, down 1 percent from October and down 4 percent from 2003. The region's area for harvest, at 283,000 acres, is unchanged from last month but down 12 percent from 2003. Yields are expected to average 3,236 pounds per acre across the region, down 47 pounds per acre from October but up 274 pounds per acre from 2003. The Oklahoma yield, at 3,250 pound per acres, is forecast at a record high level. Oklahoma harvest, at 76 percent complete, lagged the 5-year average by 3 points, while Texas harvest, at 39 percent complete, lagged the 5-year average by 10 percentage points at the end of October.
The peanut harvest remained behind the normal pace throughout the month, reaching 77 percent complete by month's end, 4 points behind last year and the average. Harvest was nearly complete in the middle Atlantic Coast States, at 98 percent in Virginia and 95 percent in North Carolina, with both States ahead of the normal pace. However, progress trailed behind normal elsewhere. Even though Texas growers began the month 3 points ahead of their normal pace, persistent rainfall in the peanut-producing area of the State slowed harvest which caused progress to lag 10 points behind normal by the end of the month.
Early October 2004
USA PEANUT CROP IS NOW DRYING OUT - Peanut farmers in all three
regions are waiting for the wet soils to dry to move into the peanut fields for
harvest. Buying points reported today, September 30th that Alabama was busy
after not getting too much rain from Jeanne. Georgia had some farmers trying to
fluff the peanuts that got rain when the peanut vines were turned upside down
during the storm. By running a fluffer or blade under the peanuts, air can
circulate under the peanuts and hopefully keep them from rotting and falling off
the peanut vine before the combine arrives. Many fields are having a difficult
time supporting the heavy combines with boggy conditions.
Hundreds of acres of peanuts are in this condition in Georgia and Florida. Hurricane Jeanne flooded the hills of North Carolina and Virginia, however the peanut belt located closer to the coast received showers. In Texas, the rains have slowed, but still getting a front in New Mexico that keeps the area cloudy. Texas and Oklahoma need more heat units and warm temps to get the peanuts mature. USDA shows 75% maturity in Oklahoma with about 5% dug. Peanut farmers in the USA need sunshine.
The next crop estimate will be issued on October 12.
Late September 2004
Tropical storm Jeanne came through the SE peanut belt Sunday &
Monday the 26th & 27th of September. East GA got 3 to 6 inches of rain, west of
I-75 2 to 3 inches. Alabama 1 inch in the east and none in the central and SW.
This has shut down the harvest in GA and Florida and will have a negative impact on the yield. Farmers dug as many peanuts as possible, so they are exposed to the rain, which will create some aflatoxin and crop damage.
Next 10 days shows good weather. They should be digging by Friday and picking by Thursday.
South West growing regions got 4 to 6 inches of rain. It is time to start the harvest in TX. Next 10 days show 60% chance of rain, not good. Virginia is looking at a lot of rain today with peanuts on the ground.....
Early September 2004
Hurricane Francis (tropical storm) came through GA and the SE
peanut belt last week. Winds were at 25 to 35 MPH and had minimal damage in the
area. Rain amounts were 5-6 inches and in some Florida peanut areas up to 10-11
In general, the rain has been good for the SE crop. With clear weather, farmers should be in the fields in 4 to 5 days
Further reports later in the week in the Peanut Growing areas of the south indicate rain was as far west as Enterprise, AL. The SW Alabama growing areas did not receive any rain and in fact are now. Farmers are digging and picking peanuts that are ready. They will need to continue to watch Ivan and make sure they can get any peanuts dug into the warehouse before Ivan brings rain.
Hurricane Ivan is tracking toward Florida and the SE. If Ivan, brings 3 to 4 inches of rain to the SE, this will delay the harvest another week. Some of the peanuts will be past their optimum harvest dates. This could have some negative impact on the yields.
There are some other disturbances in the Atlantic that could form into hurricanes or tropical storms. If they came into the SE a week after Ivan, this could have an even more serious impact on yield. The 2002 crop had a very wet harvest in the SE and significantly reduced the yield that year.
End August 2004
USA Peanut CROP
As of Aug. 30, 2004, U. S. peanut crop is rated nationwide as 2% Very Poor, 5% Poor, 30% Fair, 47% Good and 16% Excellent. On this same date last year, the peanuts were 3% Poor, 22% Fair, 55% Good and 20% Excellent.
The Crop is not quite as optimistic as last year, but heat units continue to develop the crop helping maturity. Hot and dry conditions in most regions should move the crop forward with development
Specifically, in Georgia it's been a mixed bag with some farmers receiving isolated showers and some areas hard hit with drought conditions. Tomato Spotted Wilt Virus increasing daily mainly with early planted peanuts. Rainfall: Cordele .05", Camilla .95", Dawson .00", Statesboro .21", Plains .02" and Tifton.58"
Virginia farmers welcomed a dry week with temperatures normal. A tropical depression was aimed at the coast today and expected to team up with Gastor and bring rains to the region.
Middle August 2004
Recent Rain in
the South East this week of August 9th has relieved the drought stress on the
peanut crop. The SE has received 1 to 3 inches of rain over the last two days
and more is expected with tropical storm Bonnie. Bonnie is predicted to bring 4
to 6 inches of rain to the peanuts areas on Thurs and Friday of next week. This
could bring the total this week to 10 inches in some areas. That may too much of
a good thing.
The new Crop Report 8/12/04 shows estimated peanut production at 2,160,100 tons. UP 4.2% from 2003, this should be a good thing. Estimated yield for the US is 3,198 lbs per acre, UP 1.23% from the record crop in 2003. Estimated harvested acres are 1,351 ac, UP 2.97% from 2003 crop.
USA PEANUT STOCKS & PROCESSING -The beat goes on! Peanut consumption is setting a record pace and the U.S. markets continue to BOOM. May 2004 showed a 21.97% increase in edible peanuts. June was another winner; up 10.6%over the same month last year with peanut snacks posting a 46.5% increase over the same month last year.
For the year, peanut and peanut butter usage is UP 10.1%, for the first 11 months of the year. All this is happening with peanut stocks higher than normal. Peanut stocks are UP 21 percent over last year at 1.16 billion pounds equivalent farmer stock. Shelled peanuts on hand totaled 847 million (equiv. Farmerstock), up 7.9% from last year. Roasted stocks were 79.6 million pounds, also up 27.7% from last year. For edible stocks by type, Virginia stocks up28.1 percent vs. same month last year, runners up 1.8% (488 million pounds) and Spanish UP 35.9% (43.2 million pounds) from the same month last year. June, 2004 millings totaled 309 million pounds, down 4.6 % from same month last year.
Commercial processors used 156 million pounds of shelled edible peanuts in June compared to same month last year, up 10.6%. Government purchases for Nutrition Programs now totals 29.3 million pounds for the first 11 months, down 9.4% from last year.
This past week, (week of 4/26) much needed rain for the Peanut Crop came to the South East area of this country. The rain was all across all of the South East, including Miss, AL, GA and FL. Rainfall was from .5 in to 5 inches
Some areas received 1.5 inches west of Albany (Main Peanut Growing Area). More rain is predicted for the end of this week and this weekend. This is just what they need to get the moisture up for planting. Seed sales are robust and shipping is heavy.
Current plantings progress is: GA 3% AL 2% FL 8%