Growers who haven’t already contracted their peanuts are looking at the loan-rate now, says Smith.

“Loan rate means $355 per ton. If you put them in a nine-month loan, and that loan begins on the first day of the month that you put the loan in, you can hold them for eight or nine months and wait for the price to improve.”

When marketing the 2012 peanut crop, patience will be the key for non-contracted peanuts, says Smith.

It’s really a guess as to how many peanuts were not contracted, he says.

“In the Southeast, we have more of a history of planting additional acres and non-contracted acres, so there were more acres planted without contracts, and right now there aren’t any bids for them, so they’ll be pushed straight into the loan for $355 per ton.

“In the next few months or so you might have an opportunity to sell them in the spot market.

“The hopeful high would probably be $400 per ton. If you put them in the loan, it’ll take $380 to get them out of the loan unless the sheller agrees to pay for the storage costs and handling fees.

“If you forfeit them in the loan, the government will pay for the handling and storage of those peanuts. We know what the bottom price is going to be for peanuts if they’re going to come out of loan — it’ll be somewhere around $380.”

Growers can store them and wait for the 2013 crop to see what the expectations are and maybe get a little better price from where they are right now, says Smith.

“If you’re able to hold them and pay for the storage into January, and then put them in the loan, the last day you can apply for a loan on peanuts is Jan. 31.

“Then, you could actually get into next October for the loan. A lot of people do that, and it’ll put pressure on the shellers, because they need their warehouses cleaned out. They’ve got peanuts coming into the warehouse in September and October, and they don’t have enough room to store two crops.”

The loan will be tested this year, says Smith.

“In 2013, the shellers and manufacturers are going to try and find a price that won’t encourage more acres but won’t lose too many acres.

“Peanut acres definitely will be going down, I think to about 1.2 million or a little less. I expect exports to increase and consumption to go up because manufacturers will be trying to boost peanut sales.”