Well the Commission started its fifty first year today and it is in a new very efficient building which has an educational center designed to work for the farmer. We had our first out of state visitors today.
We had the ribbon cutting for the building yesterday and had about 300 folks here.
The drought continues to persist and promised rain never materialized yesterday.
The Midwest drought is about to impact us next year.
Chances are good we will fill the pipeline this year and no contracts will come close to those which will be offered for corn and soybeans. So next year we will likely short the market at planting.
My advice to a farmer is to put uncommitted peanuts in the loan after January 1 and wait the market out. I really think we are in a two year cycle and have to have vision further than the current marketing year.
Wednesday, August 1, 2012
Friday, July 6, 2012
Planted Acres Estimate
NASS released its planted acres report earlier and after some review this is one man's idea of what it means.
When everyone including the folks in Texas were thinking their industry would crawl under a rock and die, their farmers showed everyone and increased acres over last year. So much for the need to get new production areas. Still we have new production areas like those in Arkansas and Missouri.
If you don't have a contract then I am a bit doubtful there will be one before harvest which is much better than the loan rate so I wouldn't be in a hurry to sign a nothing contract if I was a farmer. The loan will pay you $355 plus or minus on grade.
This crop is a long way from done and there is a lot which can happen between now and harvest. Some areas are suffering from extreme heat and drought as I write this. As a rule the Georgia crop looks pretty good but it is far from perfect and far from done.
Drought can lessen yields, high nighttime temps can increase aflatoxin, a rainy harvest can reduce both yield and quality.
If you produce peanuts in excess of your contract there is no sense now asking why the market is not better. We had urged caution before planting but hindsight is 20/20 and some folks got a thousand a ton last year. If you do find yourself in that situation then you have an option...wait until after January 1 to put your peanuts in the loan and that gives you until October 31 to redeem peanuts from the loan. If the market is at $355 at the end of harvest then it may stand to reason there will not be any decent contracts offered next year and plantings will decline. If they decline enough then loan peanuts may increase in price especially after we plant and as the 2013 harvest approaches.
We cannot any longer look at a crop year when making marketing decisions.
And remember, the pipeline from 2011 is about empty so they do need some peanuts in excess. This makes patience a virtue as we market uncommitted peanuts. If there is any significant disruption in supply of 2012 peanuts then the market could well respond.
When everyone including the folks in Texas were thinking their industry would crawl under a rock and die, their farmers showed everyone and increased acres over last year. So much for the need to get new production areas. Still we have new production areas like those in Arkansas and Missouri.
If you don't have a contract then I am a bit doubtful there will be one before harvest which is much better than the loan rate so I wouldn't be in a hurry to sign a nothing contract if I was a farmer. The loan will pay you $355 plus or minus on grade.
This crop is a long way from done and there is a lot which can happen between now and harvest. Some areas are suffering from extreme heat and drought as I write this. As a rule the Georgia crop looks pretty good but it is far from perfect and far from done.
Drought can lessen yields, high nighttime temps can increase aflatoxin, a rainy harvest can reduce both yield and quality.
If you produce peanuts in excess of your contract there is no sense now asking why the market is not better. We had urged caution before planting but hindsight is 20/20 and some folks got a thousand a ton last year. If you do find yourself in that situation then you have an option...wait until after January 1 to put your peanuts in the loan and that gives you until October 31 to redeem peanuts from the loan. If the market is at $355 at the end of harvest then it may stand to reason there will not be any decent contracts offered next year and plantings will decline. If they decline enough then loan peanuts may increase in price especially after we plant and as the 2013 harvest approaches.
We cannot any longer look at a crop year when making marketing decisions.
And remember, the pipeline from 2011 is about empty so they do need some peanuts in excess. This makes patience a virtue as we market uncommitted peanuts. If there is any significant disruption in supply of 2012 peanuts then the market could well respond.
Monday, June 25, 2012
What a Year of Diversity and Perhaps Adversity
Peanuts were planted from Mid March to June this year. The market was terribly uncertain at planting but other markets were as bad or worse. Some farmers had 20/20 hindsight and planted without a contract. In Georgia and the Southeast there are a lot of peanuts planted. Stands range from bad to excellent. Today we are feeling a tropical rain in June which will be especially beneficial to those March planted peanuts. The peanut industry seems to have varying opinions as to what happens with a large crop and frankly it is a long way from being done. A large crop and low prices at harvest will take care of itself with lower plantings in 2013. It is the roller coaster of the free market.
Couple all this with the uncertainty of a farm bill which is still largely unknown and hopefully will end up with a safety net for southern farmers which is non-existent in the Senate version of the bill which passed last week...the ride will get to be interesting.
Couple all this with the uncertainty of a farm bill which is still largely unknown and hopefully will end up with a safety net for southern farmers which is non-existent in the Senate version of the bill which passed last week...the ride will get to be interesting.
Wednesday, June 6, 2012
Beneficial rains came to most of the peanut belt in Georgia over the past two weeks but we are still in a drought situation because subsoil moistures are limited.
Still with the apparent increase in acres the market is sluggish and is counting on the new varieties performing beyond expectations for another year. The reality is the new varieties have not been tested under more normal conditions as a whole so if the rainfall were to continue we might see the full potential.
Baker County, Georgia last year had a county average of about 5200 pounds which heretofore has been unheard of.
The shelled good market will not currently support a $750 which many growers got a piece of early on so contracting was a good decision. Shellers who have not sold forward to cover those positions may be wishing the crop would be tight again this year.
Stands as a rule were pretty good which is unusual given the difficult situation finding quality seed. The Georgia Department of Ag seed lab in Tifton had record numbers of peanuts sampled and apparently the shellers found enough quality seed to meet the demand for their customers.
Still with the apparent increase in acres the market is sluggish and is counting on the new varieties performing beyond expectations for another year. The reality is the new varieties have not been tested under more normal conditions as a whole so if the rainfall were to continue we might see the full potential.
Baker County, Georgia last year had a county average of about 5200 pounds which heretofore has been unheard of.
The shelled good market will not currently support a $750 which many growers got a piece of early on so contracting was a good decision. Shellers who have not sold forward to cover those positions may be wishing the crop would be tight again this year.
Stands as a rule were pretty good which is unusual given the difficult situation finding quality seed. The Georgia Department of Ag seed lab in Tifton had record numbers of peanuts sampled and apparently the shellers found enough quality seed to meet the demand for their customers.
Wednesday, May 30, 2012
Farm Bill and Weather Top the News
Well the Senate version of the 2012 Farm Bill is a real dog for southern producers. Our farmers need to be crying bloody murder on this one. It is nothing more than a food stamp bill. Research funded by the Commission through the National Center for Peanut Competitiveness has demonstrated the lack of a safety net for southern producers and now FAPRI which is the Food and Ag Policy Research Institute in Missouri has confirmed our worst fears.
For the first time ever in my recollection, the House has a much better deal for us than the Senate if we can just finally get out of Committee and through the House floor.
Meanwhile, at home east of I-75 in most areas Beryl dropped some much needed rain and an isolated cell moved from the northwestern GA belt southward but rainfall amounts were limited. For the heart of the Georgia belt drought conditions still continue. In the eastern production areas where acres were up the condition is better but this will not fix the ills of the drought on the final outcome. What we need is a tropical storm to come in from the Gulf and sweep across the entire GA peanut belt.
For the first time ever in my recollection, the House has a much better deal for us than the Senate if we can just finally get out of Committee and through the House floor.
Meanwhile, at home east of I-75 in most areas Beryl dropped some much needed rain and an isolated cell moved from the northwestern GA belt southward but rainfall amounts were limited. For the heart of the Georgia belt drought conditions still continue. In the eastern production areas where acres were up the condition is better but this will not fix the ills of the drought on the final outcome. What we need is a tropical storm to come in from the Gulf and sweep across the entire GA peanut belt.
Thursday, May 3, 2012
Everybody Talks About the Weather
We can talk about the weather but it is what it is. Experts had said a three in a row LaNina was not heard of but it sure is hot and dry right now. Soil moisture is down to 7% and that is not going to be solved by occasional showers. We need a major rain event.
We had peanuts planted in March and irrigated peanuts going in now and if the dry weather persists we may have peanuts planted as late as mid-June so it could be a long drawn out harvest.
I am pretty sure nobody knows what to do at this point as far as marketing so we seem to be in a hold tight mood. Chances are pretty good it will either be better or worse than we think right now which proves what Frank McGill told me when I first came to the Peanut Commission, "only a fool would predict a peanut crop before the Fourth of July."
On another note seed testing on peanuts was far higher than years past which tells me there is a search for something of adequate quality to put in the seed market. Some folks have mis-read this as an indicator of excess acres but I would lay odds everything tested will not end up in seed.
We had peanuts planted in March and irrigated peanuts going in now and if the dry weather persists we may have peanuts planted as late as mid-June so it could be a long drawn out harvest.
I am pretty sure nobody knows what to do at this point as far as marketing so we seem to be in a hold tight mood. Chances are pretty good it will either be better or worse than we think right now which proves what Frank McGill told me when I first came to the Peanut Commission, "only a fool would predict a peanut crop before the Fourth of July."
On another note seed testing on peanuts was far higher than years past which tells me there is a search for something of adequate quality to put in the seed market. Some folks have mis-read this as an indicator of excess acres but I would lay odds everything tested will not end up in seed.
Wednesday, May 2, 2012
Origin Discussions from International Peanut Forum
What I heard at this year's International Peanut Forum from other origins seems to follow what I hear from our growers...cost has risen and we cannot grow peanuts much cheaper than they are now. That is a new attitude from what used to be a cut-throat business only a few years back. It seems farmers worldwide have decided they need a profit, too.
On other notes, China suggested they would be using more of their peanuts for edible oil and will likely at some point become an importer of edible peanuts. India suggested a similar trend at some future point.
Meanwhile, it is hot and dry in the Southeast. A Bermuda High has set in and is keeping us from getting much needed rain to plant non-irrigated peanuts. Some models suggest it to weaken and the chance or rain to become more prominent. The problem is until we have a major rain event we are so dry a few tenths will not make the moisture meet. This has been complicated by an April filled with Summer temperatures and March like winds.
This is shaping up to be another very interesting year. Farmers without a contract at planting should watch the markets closely and keep an eye on conditions.
On other notes, China suggested they would be using more of their peanuts for edible oil and will likely at some point become an importer of edible peanuts. India suggested a similar trend at some future point.
Meanwhile, it is hot and dry in the Southeast. A Bermuda High has set in and is keeping us from getting much needed rain to plant non-irrigated peanuts. Some models suggest it to weaken and the chance or rain to become more prominent. The problem is until we have a major rain event we are so dry a few tenths will not make the moisture meet. This has been complicated by an April filled with Summer temperatures and March like winds.
This is shaping up to be another very interesting year. Farmers without a contract at planting should watch the markets closely and keep an eye on conditions.
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