Due to last year’s record-breaking peanut harvest and the current surplus supply, Georgia farmers will likely decrease the number of acres they plant this year.

Economists are hoping international demand for peanuts and rising domestic demand for peanut products will help to absorb some of the record number of nuts in the “pipeline” and stabilize prices.

Falling peanut prices, rising corn prices

Farmers are expected to drastically reduce the number of the peanut acres they plant this year because of high prices projected for competing row crops, like cotton, corn and soybeans.

“The peanut outlook for 2013 will be a reverse of 2011,” said Nathan Smith, a UGA Cooperative Extension crop economist. “Instead of concern about planting too many acres, the concern could be planting too few acres.”

High peanut prices, driven by a shortfall in 2011, led farmers to plant a near record number of acres in 2012. The large amount of planted acres paired with record yields per acre have forced peanut prices down to 2009-10 levels. Those prices will be slow to rise as the peanut surplus is worked down, Smith said.

“Production was expected to increase due to the large increase in acreage in 2012, but yields were well above expectations, leading to a great many more peanuts,” Smith said.

Smith predicts the total peanut supply, when tallied for the 2012 harvest, will jump from 1.84 million to 3.37 million tons.

Contracts offered to growers in 2013 will take into account current peanut supplies and where cotton and corn prices are headed, Smith said. Soybeans could be a player, too, in 2013. The price offered to growers will not exceed returns of cotton, corn and soybeans, he said. So the stage is set for lower peanut prices in 2013.

“The best case scenario would be if cotton prices all of sudden took off, which there is a low probability of that happening,” Smith said. “The other scenario that would raise prices would be low acres coupled with production problems.”

A perfect year for peanuts, in Georgia and across the U.S.

Georgia’s 2012 average yield was 4,550 pounds per acre. This surpassed 2011’s yield of 3,625 pounds per acre. Georgia growers planted 735,000 acres in 2012, up 55 percent from 2011.