Monday, April 23, 2012

A Year of Variables

Not in my twenty six years as Executive Director of the Peanut Commission have I seen peanuts planted in the third week of March...until now that is.

For the past two years I have told farmers who asked, the downside potential of price was pretty limited. I am not sure that is the case for 2012. Cotton prices have softened and the Corn decision is already made and done by farmers.

Early on contracts for the two big shellers were conservative but adequate to get some acres planted. When there were not enough peanuts contracted a slight upward blip in the next wave of contracts got more acres. At least two shellers offered $750 contracts when $650 was about as good as it got from the big boys and while I applaud them for that I hope this is not a situation where they "should have been selling when they were buying."

So where are we now? Currently, the weather is the variable. We have never had LaNina years thrice in a row. Yes I spelled that correctly, thrice. Were that to happen we would likely continue disruptive market behavior and that would not at all be good. Some of the major manufacturers actually made decisions to try to quiet demand for peanut products. Remember we were showing record growth when the disaster in supply hit last year.

So let me get to the point. The variables this year are the greatest they have been in my 26 years in the position and we will have to watch things closely as the season progresses.

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