Peanut farmers are producing about 50 percent more nuts than the nation needs this year. And the record yields are pushing prices to the basement.
The U.S. Department of Agriculture said last month farmers will produce about 3.2 million tons of peanuts this year – half of those grown in Georgia. All told, that will be about a million more tons than the current market demands. Many in the industry think those estimates are conservative.
Georgia Peanut Commission executive director Don Koehler said he expects farmers will put those extra nuts in storage for next year.
“What you would anticipate is, perhaps farmers don’t see the strength in price in 2013, [so] they plant fewer acres of peanuts and let the surplus be pre-production for the 2013 marketing year,” he said.
The USDA estimates peanuts are selling for about $525 a ton, less than half of last year’s peak prices. However, farmers typically get less than that estimate for their crops.
Koehler said farmers might be able to get better prices in the spring.
“If they’re in a position that they can hold some of these peanuts on into 2013 and after we plant the 2013 crop, there may be some improved pricing opportunities for the farmers at that time,” he said.
The bumper crop is a turnaround from last year when prices climbed as high as $1,000 dollars a ton amid poor production.