Cooler than normal temperatures at peanut planting time has also cooled off the peanut market.

     At the farmer, buying point level, the discussions centered around the acreage estimate, cost of production, prices of competing crops, cost of producing competing crops and prices of corn, cotton and soybeans.

      After the USDA estimate of a 7% increase in peanut acreage, most agreed that a 7% would not flood the market, but if harvest was abundant, the hope of getting rid of the 1 million ton carry forward would be nil.

      It’s all about the money.  Cost of all inputs plus inflation has farmers worried and that brings on other problems.  Dr. Fletcher at ABAC Rural Prosperity has reviewed the peanut representative farms’ crop year 2021 cost of production as compared to 2022 costs and found that the total cost of production increase per ton was 26.31% percent from 2021 to 2022.

      Prior to the 2021 representative farm update, the peanut reference price of $535 per ton provided an effective safety net for growers. Total Variable Input Costs (TVIC) such as seed, fertilizer, fuel, crop insurance, etc., have increased 33.48% when comparing 2021 to 2022. Our 2021 cost of production was $545.97 per ton, and Dr. Fletcher reports our 2022 cost of production at approximately $668 per ton.

       Finally, some shellers started offering $525 per ton for runner type peanuts, $525 per ton on High Oleic and $550 per ton on Virginia type.  Some shellers are offering a sheller pool with $500 per ton floor hoping for prices to increase later this season. 

       Response has been weak and varied with some buying points booking contracts and other buying points reporting that farmers are in no hurry, keeping an eye on fall cotton and other industry problems like a drought in West Texas and even Argentina.

       Buyers continue to point to Dec. ’23 cotton ($.80 per lb.) as a reason peanuts should see peanut planting increases and falling prices for raw shelled kernels.  The option is $535 per ton peanuts vs $.80 lb cotton. 

      Current crop market is still very firm with prices in the low $0.60’s FOB SE for kernels. Prices seem to have been buoyed by strong demand at home and an increase in EU interest with the crop in South America very much in question.  New crop still trading very thinly in the mid $0.50’s. 

       The raw peanuts in primary products IS DOWN 1.3%    Peanut butter continues to show a growing, strong market, UP 4.7% for the 8 months.  In-shells are on a roll, up 9.5% during the last 8 months.         

        For the past 7 months, US peanut exports are down 2.82 %.  Mexico is still the top buyer, down only 2.55% as Canada keeps buying more, up +5.27%.  China is the 3rd largest buyer, still down 17.3 %.  Japan jumped up to #4 as the Netherlands is now #5.

         Price Loss Coverage program (PLC) will not have a payout in October, average price of peanuts paid to farmers will average above the $535 per ton reference price.  The U.S. Peanut Federation make a new higher reference price a top priority in the new Farm Bill. 

         As farmers seek out contracts for the 2023 crop, many are tuned in on what the industry is seeking in the new 2023 Farm Bill. The U.S. Peanut Federation had testimony for two major items.

        The Federation supports an increase in the reference price.  While the PLC program has worked for peanut producers, the rise in input costs and the cost of production necessitates a references price increase.

         Secondly, the federation supports a voluntary base update that includes growers with and without peanut base acres.  The 2014 base update excluded many young farmers and new production areas.   

          At the Senate Hearing, Senator Tuberville opened his questions stating, “In my home state of Alabama, over 558.9 million pounds of peanuts are produced annually. If the peanut reference price is too low, and the cost of production is approximately $668 per ton, why are some growers signing contracts for less than $600 per ton?”

         Karla Thompson outlined the reasons for this, including crop rotation, operating loans from banks which require a contract before granting the loan, the hopes that high yields will offset low prices, or the prospect that membership in a grower-owned shelling facility will help capture a profit on the shelling and sale of peanuts to manufacturers to recoup losses on a low contract price.  

        Awesome answer.


2023 Est. Peanut Acreage (+7%)                1,547,000 acres

2022 Est. Peanut Production (- 12.5%)     2,784,000 tons

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

2022-23 In Loan (5-1-23)                                 1,060,073 tons

2022 -23 Domestic Usage (8 Mo.)                 DOWN – 1.3 %

2023 Exports (Jan-Mar) (3 Mo)                      DOWN – 6.14 %

Posted Price (5-2-23) Runners -$424.68 ton, Spanish - $413.41 ton. Valencia and Virginias - $428.31