Prior to the 2010 planting season, the U.S. peanut industry was expecting an acreage increase of 8 to 10 percent. Instead, producers boosted their plantings by 17 percent, and the market is now reacting, says Richard Barnhill, an Albany, Ga., peanut broker.
“This likely will push farmer stock prices down,” said Barnhill at the recent Southern Peanut Growers Conference held in Panama City, Fla. “If there is any 2009 crop that hasn’t been contracted, you would expect low prices. The market just will not support it.”
When deciding how much peanuts are worth, it all comes down to what the market will bear, says Barnhill.
The latest USDA peanut crop estimate for 2010 calls for 2.1 million tons, he says. “We’re at a critical period in the crop year. It’s hot and dry, but so far we’ve been off to a good start,” says Barnhill.
It’s important, he says, to know where the peanuts from this year’s crop are going and what the demand is. Domestic usage is about 1.4 million tons, seed use is about 110,000 tons and the export market is 400,000 tons. “What does this tell us about supply and demand and what does it tell us about how many peanuts we’ll need?” he asks.
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