Wednesday, March 30, 2011
Well the peanut market is certainly in flux at the moment based on a lot of things but there seems to be at least some imbalance to me when I look at the price being offered to farmers and the price being charged for seed. I put our staff to work and sought out information on peanut prices and medium runners are currently being traded around 80 cents and one report was as high as 83 cents. Well now if you look at tradition seed has typically been 10 cents over medium runner price but for the sake of discussion lets even say 12 cents is within normal. That would be reasonable justification for seed prices being 91 to 94 cents per pound. Well if that is the case then lets look at the other end of the spectrum and see what we find. 80 cent mediums should yield a farmers stock price with at the least an 8 as the first number. So then we took in to account that the 10 crop had some quality concerns so we did a few calculations. Considering blanching cost of 5 to 6 cents and adding 10% more to our normal shrink considerations the price should still have a 7 in front for any uncommitted farmers stock from the 10 crop. I can understand how shelled good prices have escalated because of quality concerns and the concern we could see acres for 2011 in a very tight situation. What is not understandable is how it is farmers stock offerings for uncommitted 10 crop peanuts has held at $550 while the medium price has escalated. Farmers know this, too and in the meeting the other night in Coffee County GA I had a lot of farmers who are really mad at the shellers right now. I have heard the same across the state but it was very vocal in Coffee County. Be they the culprit or not shellers are not currently on the list for growers to send an Easter Basket. I know the best way to change farmer attitudes is with money. If that doesn't happen then I am pretty certain shellers may need to hire a good PR firm.