At our board meeting this week the preliminary budget was set based on 450,000 acres for Georgia. This is the lowest acreage since 1980 and the rest of the country seems to be following this trend in cutting acres and planting other crops like cotton.
The board also agreed to a projected yield of 3150 which looked at the yield potential of the new varieties but also the belief that irrigated acres would be dedicated to cotton because cotton contracts have to be delivered with no accounting for any act of God.
If all this comes to pass and given the serious quality problems in the 2010 crop causing the crop to sustain heavy blanching loses to clean it up and this will be an interesting year in the peanut market.
I have always thought seriously that contracting some of your peanuts was a good idea but this year I wonder if that is true. I think the most recent contracts of $600 is really not even a floor given the market fundamentals.
I am pretty bearish on price for farmers who have uncontracted peanuts for the 11 crop and even the 10 crop may move up if a farmer has them in the loan and can wait until later in the year.
I think it is becoming a more safe bet that the 10 crop will all be needed to satisfy current demand given the significant kernel loss suffered in the blanching plants.
One early season concern is that many areas are dry and temperatures seem to be warming in a hurry. The current weather pattern is much similar to I believe the 2008 crop when it seemed that the rain angled in from the northwest and played out before it got to very much of the peanut belt.
One hope is that the ENSO currents will move to more neutral as the year progresses but as of yet no one has made that prediction.
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