Monday, October 11, 2010

Peanut Harvest Continues

October is traditionally a dry month but it was dry going in to October in many places and where it wasn't it is now.

Harvest continues and non-irrigated peanuts range from virtually not worth picking to surprisingly good based on where they are and how much rain they got. Irrigated peanuts are off a bit from what we would have anticipated.

Quality of the crop based on environmental conditions is somewhat less than recent years. Burrower Bugs, Aspergillus, Lesser Cornstalk Borers, and general weather conditions have combined to present some challenges.

We had the hottest Summer on record in the Georgia Peanut Belt. Also, there was prolonged drought in many of our peanut counties.

Many grades have been reported to be lower than recent years. Farmers report multiple crops on the vines which makes determining harvest time more difficult. Also, many pods have a blank where a peanut should be, most likely due to excessive heat.

So with all this said could there possibly be any good news?

Well, it has been said that God looks out for fools and little children...Early in this season many in the industry lamented the ills of a surplus of peanuts...I think that has been taken care of this year...question is, which are we? Fools or little children!

With the surplus depleted and cotton prices very strong for next year peanut prices will have to increase sharply if farmers are going to plant peanuts in 2011 and the market should be such to be able to afford stronger prices to the grower. For growers who survive this year that is all good news.

Thursday, October 7, 2010

Looking to 2011

This year has been an interesting year with great expectations and dashed hopes.

Damage from Burrower bugs has caused problems we have not ever seen in any significance. High nighttime temperatures caused an increase in Aspergillus. Drought reduced yields and grades have been quite low. It is safe to say at this point Mother nature has taken care of any discussion of a surplus of peanuts.

Complicate this with equally reduced cotton yields and even with increased prices for cotton many farmers find themselves in a difficult situation and wonder what 2011 will hold for them.

For 2011 peanut prices will have to increase if farmers plant them. Cotton this week was over a dollar a pound and contracts at two cents off of basis for next year are up to right at 83 cents. Some experts say cotton prices will go higher next year.

From the work done by the University's National Center for Peanut Competitiveness we know that in Georgia it will take at least $515 to $538 per ton to compete for acres with 83 cent cotton. What is more, uncommitted peanuts in the hands of farmers this year should still likely face some upside potential with some offerings already at $485.

Looking forward, the state climatologist says the current weather pattern will continue an that the drought will extend in to 2011 with hotter and drier conditions than normal. How long the pattern continues is yet to be known but it could well mean we go in to the season with inadequate soil moisture in some areas.

On the consumption front there are some bright spots. First, peanut butter sales are at a record high pushing consumption to record levels. Also, exciting news from Planters. Coming out in a couple months is the "Five Alarm" dry roasted peanuts. I am well convinced we could see a mini boom in the snack nut market with this introduction. The introduction of honey roast, now two decades ago, caused a real growth in the peanut market. This product has potential to have a similar, if perhaps smaller impact.