Market Watch Could EU Purchases Help Firm Up e Market?

How many acres of peanuts will be planted in the United States and in the biggest state, Georgia? That’s what the market wants to know. With 50% of production coming from the Peach State, a 10% acreage increase is significant. It is hard to chase a market you can’t catch.

The acreage planting mix is a decision influenced by items such as contract offers from local buying points and shellers, cost of production, prices and costs of competing crops, working equipment, farm labor, availability of chemicals and even seed costs and availability. After a 10% reduction last year, farmers are coming off a good year in 2022 with positive thoughts.

Marketing Mix

Looking ahead, farmers know an increase in costs of production is certain. So, they are looking for more this year. The current crop market is still very firm with prices in the low 60 cents per pound. Prices seem to have been buoyed by strong demand at home, and by a questionable South American crop outcome, the usual source for the European Union’s peanut-buying interests.

New crop is still trading minimally, and 2023 contracting in all regions for farmer stock has not picked up. Once again, buyers’ ideas are in the mid 50 cents per pound. Things could still change before planting, so farmers have not rushed to buying points to sign up.

Adding to the marketing mixture are grower cooperatives. Growers plant a required number of acres as quota to cover cooperative stock. Estimating acres above co-op stock is not easy. Some industry experts estimate co-op designated planting could be as high as 800,000 acres.

Options And Decisions

Most shellers have offered $525 per ton for runner-type peanuts, $525 per ton for the high-oleic oil varieties and $555 per ton on Virginia-type peanuts. Some shellers are offering a sheller pool with a $500 per-ton floor.

Buyers continue to point to cotton at 80 cents per pound as a reason peanut should see acreage increases and falling prices for raw-shelled kernels. However, one survey has cotton acreage estimated down 17%. The option is $535 per-ton peanuts versus 80 cents per-pound cotton. It’s decision time.

Higher Reference Price

The Price Loss Coverage program will not have a payout in October because the average price of peanuts paid to farmers was above the $535 perton reference price. The U.S. Peanut Federation has made increasing the reference price a top priority in the new Farm Bill.

One sheller recently announced a pay-

J. Tyron Spearman Contributing Editor, e Peanut Grower

out of $22 per ton, over and above contracts and other premiums from seed or irrigation. A new ReGeneration cover crop program may net the farmer another $10 per acre.

Seed cost is only a penny more than last year. Certified Georgia-06G is 84 cents per pound and registered seed is quoted at 86 cents per pound. Farmers paying on fall terms are priced at 87 cents per pound for certified and 89 cents per pound for registered seed.

Domestic Demand

Just when the trade thought demand was slipping, Peanut Stocks and Processing makes a major adjustment. Candy usage was down 36% last month and is now up 3.8% for the month. The raw peanut usage in primary products is suddenly changed from down 2.3% to down only 0.6%.

Peanut butter continues to show a growing, strong market, up 4.4% for the seven-month marketing year. In-shells are on a roll, up 11.8% during the same