The peanut market is very quiet.  Current raw shelled peanuts are available from 68-72cts and buyers come in as needed for spot sales.  The market seems to believe that supplies will be below average causing the price to remain higher than normal.

Some coverage was needed through the summer, but buyers’ think markets will weaken as the planted crop germinates and progresses.  Any prolonged dry weather June forward will push new crop prices higher from 59 Jumbos, 58 mediums and 57 splits.

Buyer’s need to be aware that we need to produce a 3.1million ton plus crop of good quality peanuts as the carryover from 2023 crop will be below historic levels.  Many new crop buyers have taken some coverage and are now in a wait and see pattern until the crop is planted and progresses.   

With the anticipated short supply and higher cost of production, contract offers were above the  $500- $525 per ton level for Southeast and VC runner type higher. Virginias were also higher in the VC area and the SW.  Some buying points reported heavy action especially if a sheller/buying point pool was an option, hoping to price peanut higher later.

Buyers continue to point to cotton prices ($.75- $.80 per lb.) as a reason peanuts should see peanut planting increases and likely lower prices for raw shelled kernels.  

USDA says farmers report intentions to plant 6,000 more acres than last year for a total 1.65 million acres. Farmers in Georgia and Alabama, the two top peanut producing States, are expected to plant 50,000 more acres in MY 2024/25 compared with the prior year.

Whereas,  farmers in Texas report intentions to plant 65,000 acres less than last year.  Smaller producing states like Missouri, Florida, and South Carolina intend to increase their respective peanut planted areas in MY 2024/25 offsetting the loss of acres in Texas.  Some growers were not in agreement.

The first USDA planted crop estimate had acreage down 1% with major problems with the Texas drought.  Meanwhile, the USDA estimate of a 7% increase in SE peanut acreage, most agreed that a 7% would not flood the market, but if harvest was abundant, the carryforward would steady the market.

USDA is estimating a production of 2,945,000 tons. Total peanuts available for the market are 4,008,500 tons.  Disappearance markets are domestic food, crush, exports and seed/residual is 3,031,500 tons.  Ending stocks drops 4% to 977,000 tons. Domestic food usage dropped 0.6 % as exports increased 21% to 725,000 tons.

Contracts are not likely to be offered again until certified or reported peanut acreage is posted one month after the farmer deadline of July 15 by the Farm Service Agency.  Shellers are not likely to offer lower shelled prices until they get a more accurate accounting of crop tonnage.

Meanwhile, other storm clouds could impact progress.  Number one is weather.  Texas continues to miss rains in the Southwest, while floods and storms are destroying some Texas areas.  The Southeast has received early rains to get the crop off to a good start but more needed at pegging time.

Another factor that bothers leaders is the sudden drop in consumption.  USDA’s utilization charts show a 3 percent decline from last year.   Eight month USDA comparisons saw peanut usage in candy down 2.5%, peanut snacks down 13% and peanut butter down 0.4%...all leading to a decline of 2.9%. 

The cause seems to be inflation which has most food items with a higher price.  The costs of ingredients have also increased to manufacturers including peanuts and peanut butter. 

In the last fiscal year (FY) alone, U.S. agricultural exports declined by more than $17 billion, and recent forecasts show a further decline by more than $8 billion in FY 2024.  As a result, the U.S. agricultural trade deficit is projected to reach a record $30.5 billion in FY 2024.  This decline is unsustainable.

85%of U.S. peanut exports currently go to mature markets. The next step change in U.S. exports will need to come from new categories in existing geographies or new geographic markets.  Shipments are up 21% over last year.

Growth in total peanut kernel imports by Mexico has slowed, but peanut butter consumption is still nascent. Peanut butter also appears to be driving Europe/UK peanut consumption growth.

In Argentina, The current crop LOOKS GOOD and USDA forecasts PRODUCTION at 1.35 MMT in both MY2023/24 and MY2024/25 on 400,000 ACRES PLANTED.  YIELDS are expected to be average in the range of 3.4 to 3.5 tons per HA.  Recent high humidity, coupled with drizzle, have slowed harvest.

Peanut leaders are planning  to see a Farm Bill this year that includes the peanut program with an increase in reference price, maybe15%, an increase of base acres for new growers, a separate payment limit from other programs, keeping loan program, maybe an increase, along with storage and handling. 

Keep the faith. One commentator said this week “peanuts are medicine”. What a compliment!

LEADING MARKETING INDICATORS (As of May 8, 2024)

2024 Est. Peanut Acreage (-1%)                 1,651,000 acres

2023 Est. Peanut Production (+7.4%)       2,990,000 tons

2023 Market Loan 2022-2023                        2,294,257 tons

2023-24 In Loan (5-7-24)                                 1,137,796 tons

2023 -24 Domestic Usage (8 Mo.)                 DOWN – 2.9 %

2023-24 Exports (Aug-Feb) (7 Mo)               DOWN – 2.82%