Federal-State Inspection Service has recorded a total of 2,780,478 tons inspected at peanut buying points for 2022 crop as of February 1, 2023.  That is 3,588 tons short of the USA estimate, so crop is close to the prediction.

   Over 250,000 tons have been purchased direct from farmers and classified as commercials ready for processing.  Another 1,700,000 tons are stored as a loan, with 809,000 classified as receipted. 

   In 2022, acreage was down 8.5% as cotton prices soared and competed for land.  Shellers had to pay higher contract prices to make sure enough acreage was planted.  Costs were rising and inflation rampant as manufacturers tried to cover needs at a reasonable price before prices moved any higher. 

   Some farmers(?) rejected the$500 per ton price offer and waited.  Shelled prices continued to rise and farmers who decided to wait, finally accepted $600-$650 per ton and even some $700 per ton. This year was the year to wait, however it pays to average in the long run. When a profitable contract is offered and you think it might go higher, book some, wait and book some later.  Or option for a sheller/farmer pool and ride the market up.   

    As harvesting ends for the producer, the sheller is busy shelling and selling.  Most of the peanuts were sold earlier based on early farmer stock contract of $450-$500 per ton.  Raw shelled peanuts for runners have increased from $.53-$.55 per pound to today’s $.62-$.66 per pound.  The perceived shortage is pushing prices higher, yet most of the peanuts were delivered at the lower prices.

   Producers and buyers will be pricing and sharing the sales for over a year.  A sheller recently announced a payout of $22 per ton, over and above contracts and other premiums from seed or irrigation.  A new ReGeneration cover crop program will net the famer another $10 per acre.  With higher shelled prices, sheller/farmer pools should pay a premium or bonus above the basic contract.  Coops have another economic strategy to pay dividends along the year after peanuts are sold.

    The market has some positives that merit a mention.  The Market Loan 2021-2022             2,568,453 tons have been redeemed entering the market and not having to be bought by the government. That is good news.  Per capita consumption and total peanut consumption are at record levels.  The US Peanut Federation has been notified that the US House Appropriations has approved over $4 million in FY 2023 working to mitigate aflatoxin in peanuts. 

     Also positive for peanuts is that the American Peanut Council was approved for $2,498,000 for MAP funding projects and $470,000 for FMD programs to promote peanuts and peanut products in selected markets in 2023.  There’s more, the Peanut Institute has published proof research that  peanuts helps heart health, improves blood sugar, protect you from certain cancers such as colorectal, gastric, pancreatic and even lung cancer, and improves your chances of living longer. The quality of the 2022 crop is another plus.

     All that is good, and there is more, but what will peanuts bring this spring?  With the increase in coops, they will offer a lower front end contract with another payment likely in October and then a payout next year. With higher average prices; the PLC is no help.

    If buyers refuse to buy the higher priced shelled peanuts, the sheller has not choice, but to wait on the farmer to negotiate with the sheller on a 2023 peanut contract.  Industry cannot wait til planting time, because cotton contracts may go to $1.30 per pound again.  Farmers tell me that if cotton is $.80 pound, they would plant peanuts.  Don’t wait too long.

   Another silent factor is China.    In 2021, China bought over 200,000 metric tons.  With higher prices, it will not likely happen this year, the US has few Seg. 3 or Seg 2 to sell . At one point, China was buying 40% of the US exports.

   Peanut market summary is the same as last month.  The market is quiet as buyers have good coverage and are not wanting to buy into the market at the prices it would take to find a willing seller. So, we watch cotton and China and pray for rain.  Industry supply seems adequate, but we need acres increased for 2023 and how do we get them if manufacturers don’t want to pay?