With cotton, corn and soybean prices currently down compared to last year, peanuts have an opportunity to be more competitive depending on contract availability and prices. Further, when the council survey was taken, the new farm bill had not been passed and the provisions were unknown. While FSA has yet to write the rules and regulations, the new farm bill may offer opportunity for peanuts.

The new farm bill appears to provide opportunity for covered commodities (corn, soybeans, peanuts, etc.) to be planted on generic base acres and those acres be eligible for the PLC or ARC program. The PLC Reference Price for peanuts is $535 per ton.

The February supply/demand numbers released Feb. 17 were neutral to slightly bullish. World demand (use) was left unchanged (down very slightly), production was decreased just over a million bales, and thus projected ending stocks are down approximately 1.2 million bales.

U.S. exports for the 2013 crop year were left the same as in January, at 10.5 million bales. It was expected that the export projection might be increased. The China crop was cut 1 million bales and thus China’s stocks cut by 1 million bales. Chinese imports remain at 11 million bales.

U.S. acreage and production are expected to increase in 2014-15. Chinese production is expected to be down. On balance, world production is expected to increase. Production will still outpace demand and ending stocks increase further. China is expected to reduce imports from 2013 crop levels and this would likely reduce U.S. exports. U.S. ending stocks would increase.

This points to an overall weaker price level for the 2014 crop compared to 2013. The expected range in price is 75 to 85 cents. The upper half of this range, however, will likely depend on supply shocks, a change in China’s expected imports and use of stocks, and better than expected demand (use).