The peanut market is quiet with levels unchanged for some time.  However, the market is considered by the trade as very firm, especially nearby needs for shelled mediums and jumbo runners.  There seems to be a shortage of Jumbo runners as the historic crop outturn on them is far lower this year and there is a near term squeeze based on a low supply.  Quality has improved and better than expected.

Blanching capacity remains strained as well with spot loads of blanched material very scarce. Availability of some cuts should improve April forward, but relief in shelled market price is not likely until the crop development is underway.

Current crop market is more like $0.69/lb. for splits and $0.70 for whole kernels if you can get an offer.  The market for new crop is being indicated at .57-.58 for splits and $0.59-.60 for whole kernels FOB SE, but shellers are reluctant to contract when none of the crop has been planted.  Peanut analyst often claim there is no direct relationship between the prices offered to farmers and the shelled market prices. 

There are still some buyers domestically that have waited for falling prices that haven’t materialized and some buying to cover nearby positions happen monthly.  Many producers placed peanuts in the loan, also hoping for higher prices before time runs out.

Farmers are quick to point out that as prices go up in the market; they should also be paid a higher price, after all the production costs just keep rising.  The current price of $.70/lb. likely caused some shellers to offer $650-$675 per ton for un-contracted peanuts as manufacturers became concerned about the supply.

There is new crop rumblings from both sides, farmers and shellers, but farmers are not prepared to take $550/FST after getting as much as $650 last year.   Many farmers will wait and plant without a contract this year as delaying has been beneficial the last two years.  Coop farmers are required to deliver to stock tonnage levels and final dividend payments are paid  later in the season.

Producers are faced again with low commodity prices.  With cotton and corn prices at a continuous low level, more peanuts are likely to be planted for 2024.

USDA reduced production of last year’s crop by 93 million pounds to 5.9 billion pounds (2,990,000 TONS) on lower harvested acreage. Peanut average yields are at 3,742 pounds per acre, down 7 percent from last year. Peanut harvested acreage is reduced largely in Texas as dry conditions resulted in higher crop abandonment rates, but increased beltwide by 14%.                        

 Peanut exports are forecast up 25 million pounds to 1.3 billion pounds as the United States has increased shipments to Mexico, Canada, and the Netherlands. From August through November 2023, the United States exported 497 million pounds of peanuts, up 4 percent from last year.

Peanut crush from August through November 2023 was 226 million pounds, down 23 percent from the same period last year. With strong exports and lower domestic production, crush is lowered by 25 million pounds to 750 million pounds. Ending stocks are lowered 0.1 billion pounds to 1.9 billion pounds, the lowest since MY 2016/17.

 As of January, peanut stocks in commercial storage totaled 4.81 billion pounds equivalent farmer stock, compared to 5.05 billion pounds last year, DOWN 6.2%.  USDA reported RAW SHELLED peanut usage DOWN 0.5% (5 Mo) in primary products with peanut butter showing an increase during the period of 0.6%.  Peanuts in candy made a recovery, up 4.5% over the 5 months through December.

Shellers are offering incentives to encourage farmers to continue peanut crop rotation.  One sheller had a payout $8 per ton, to be paid on eligible tons this year.  Funds were released January 1, 2024.  The ADM re:generations™ program has delivered an incremental $30 per ton above market based contracts back to growers.

Don’t forget the PLC program.  The average price paid to farmers in December 2023 was $.249 or $498 per ton.  That is lower than the $535 per ton reference price and a 12 month average could trigger a payment next October.

Market trending is positive for peanuts.  Domestic demand is steady, export market is increasing and new nutrition studies prove that peanuts were positively associated with improved thinking, reasoning and memory. 

Don’t be surprised if the Farm Bill is extended another year.

LEADING MARKETING INDICATORS (As of February 6, 2024)

2023 Est. Peanut Acreage (+14%)              1,574,000 acres

2023 Est. Peanut Production (3,742 #/ac)   2,945,010 tons

2023 Market Loan 2023-2024                      2,325,848 tons

2023-24 In Loan (2-1-24)                               1,914,416 tons

2023 -24 Domestic Usage (5 Mo.)                  DOWN -0.5 %

2023 Exports (Aug-Nov) (4 Mo)                        UP +  4.0%