Market Watch A Wait-And-See Attitude Envelops The Market

Peanut producers experienced an unusually rough start in getting the crop in the ground. In the Southeast, dry and relatively cool temperatures caused peanuts to emerge slowly. One Extension specialist says that the lack of heat units in the early season has the 2023 crop seven to 10 days behind. In Georgia, wet soils caused the seed to rot and not germinate properly. One farmer replanted more than 1,000 acres. Seed vigor was cited as a major culprit.

A Contract Disconnect

The peanut market has been trending higher as farm leaders try to convince policy makers that inflation and increased costs of production strongly encourage producers to consider other crops. In isolated cases, some farms are not planting any crop at all because of costs. There is definitely a disconnect between what is being offered for farmer stock and what a grower is willing to sign a contract for at this time. Some producers are even waiting until harvest, or at least during the growing season, to do their contracting. Corn and cotton prices have offered no excitement, either.

Producers figure that the 2.7 million-ton crop this past year and the 18% plus increased costs of production merited a higher offer for 2023 contracts. In Washington D.C., an ag economist testified that the cost of production in 2022 was approximately $668 per ton. With acreage estimates up 7% or more, shellers started offering $500 to $525 per ton for runner-type peanuts, $525 per ton on high-oleic crop and $550 to $575 per ton on Virginia type. Some shellers offered a sheller pool with a $500 perton floor hoping for prices to increase later this season. Prices were higher for

Southwest varieties because of the cost of production on irrigated peanuts.

Markets A Bit Firmer

The market reports that there was a lot of new crop business done in late April/early May, and shellers are comfortable. Officials believe that what has been contracted has been sold, and farmers, shellers and buyers seem content to watch and wait until planting is finished and the crop gets up.

Markets are a tad firmer with good demand having been booked into new crop. The thinking is that shellers are comfortable with a bigger crop as an increase in demand from Europe will continue due to an Argentine crop shortfall. Buyers’ ideas remain in the low to mid 50 cents per pound, making it difficult for shellers to want to sell much. Shelled prices for runners for 2022 crop are 61 to 64 cents per pound.

Buyers seem content that there is a big quality crop on the way and are willing to wait at this point. European Union activity for current crop continues to come in as the Argentine crop issues have created a need for U.S. peanuts.

J. Tyron Spearman Contributing Editor,

There are inquiries for the U.S. new crop from EU buyers, but shellers are reluctant to offer until acres are better understood, and of course the quality of the crop won’t be known until harvest.

Domestic And Export Markets

Raw peanuts in primary products are down 2.5%. Peanut butter is also down 3.6% for the nine months. In-shells are on a roll, up 9.3%, with peanut usage in snacks down 12.5%.

For the past three months, U.S. peanut exports are down 6.14%. Mexico is still the top buyer, up 9%, as Canada drops only 1% compared to the same period last year. China is the third-largest buyer, down 7.73%. Japan jumped up to the number four spot, and the Netherlands is now the fifth-largest export market.

If 96% of sown acreage is harvested and yields improve by 5% to 4,230 pounds per acre, U.S. peanut production is forecast to increase to 6.3 billion pounds or 3,150,000 tons from 5.6 billion in 2022.

accounting for lower beginning stocks, supply is forecast to reach 8.6 bil-