After battling another difficult growing season, farmers are
getting
low paychecks when they take some of their peanuts to the
market.
However, consumers will see no change in prices at the
supermarket,
says a University of Georgia expert.
Market prices for peanuts remain low. This is due to world
competition,
says Nathan Smith, a UGA Extension Service economist.
“The world market is trading at about $345 per ton, with
Argentina and China selling for even less,” Smith said. This
is below the cost of producing the crop for many Georgia
growers.
Domestic, Export Markets
Each year the U.S. Department of Agriculture predicts how many
peanuts will be needed for U.S. consumption. These are known as
quota peanuts. They’re used for peanut butter, candy bars,
snacks
and other goods made for American consumers.
Farmers get about $610 per ton for these peanuts through a
federal
program. Georgia will produce about 487 million tons of quota
peanuts this year, about 40 percent of the national crop.
Many farmers grow peanuts beyond their quota. These are known
as additional peanuts and are commonly grown for markets outside
the country. Since these markets are limited, farmers with
additional
peanuts are having to compete this year, Smith said.
Many farmers may have to put this season’s additional peanuts
into the government loan, which gives a minimum of $132 per ton,
Smith said. That’s far below what it costs them to grow the
peanuts.
No Change in Store Price
Despite the third year of poor growing conditions, farmers are
expected to reach the national quota. This means that consumer
prices shouldn’t change, Smith said. For every 25 cents’ worth
of a candy bar, he said, the peanuts cost 1 cent.
“Even if the quota is not met, additionals can be converted
into quota peanuts to assure enough peanuts for making peanut
butter, candy and snacks,” Smith said. Americans eat about
2 million pounds of peanut butter and 1.6 million pounds of
roasted
peanuts every day.
Peanuts Vital to
Economy
Peanuts comprise one of the state’s largest cash crops, worth
about $400 million this year. The crop is grown in 70 counties
in the state.
The total value of the crop is hard to pin down. But peanuts add
about $1.1 billion to the state’s economy in direct income,
related
jobs and other jobs, services and economic activity, Smith
said.
About 95 percent of the crop is planted to runner varieties, the
kinds that make the best peanut butter. Around 75 percent of the
state’s peanuts are used to make peanut butter.
Improving Production,
Appeal
A spending bill recently cleared both the House and Senate to
provide for several agricultural research projects. The projects
will promote the quality and competitiveness of the American
peanut
industry and reduce the risks of peanut allergies.
Congress approved $250,000 for research on Tomato Spotted Wilt
Virus, $400,000 for the National Center for Peanut
Competitiveness
and $500,000 for peanut allergy research.
The NCPC works to increase profitability for farmers and looks
for better ways for peanuts to appeal to consumers. The research
focuses on reducing peanut food allergy risks. In its second
year, the UGA project will support efforts to reduce the
potential for peanut-related illness. One of the goals is to
develop a vaccine for people who are allergic to peanuts.
