Virginia-Carolina peanut growers have done just what the experts said they should do — they got inventories of Virginia-type peanuts down to manageable levels.

Buyers did just what the farmers said they should do — they offered contracts for Virginia-type peanuts at $600-$700 a ton.

In addition, the U.S. demand for peanut products has increased across the board, ending a multi-year trend in declining usage. And, export opportunities are better than at any time in recent history.

The combination of prices and demand should mean a big boost in peanut acreage in the upper Southeast but that doesn’t appear to be happening.

Dell Cotton, executive director of the Virginia Peanut Growers Association says growers in his state have repeatedly said they couldn’t grow Virginia-type peanuts in the state for less than $500 per ton.

“Now, we are seeing contracts offered at up to $700 per ton and not many growers are interested. It’s really frustrating,” Cotton says. Peanut acreage in Virginia increased in 2010 to 18,000, still less than a third of production just 10-12 years ago. Record heat and drought reduced yields to 1,800 pounds per acre — less than half the 2009 yield.

Long-time peanut analyst, lobbyist and promoter Tyron Spearman says this time (mid-January) a year ago, he wouldn’t have believed peanut contract prices would be so high, or so inconsistent.

“We’ve seen contracts offered and pulled back, then offered again. A lot of it is driven by cotton — buyers keep thinking cotton prices are coming down, and they haven’t so far. Nobody seems sure at all where the contract prices will go. I have heard that some buyers in Texas have offered contracts of $800 per ton,” Spearman says.

Interest in cotton hasn’t just increased in 2011, it’s gone off the chart. Nationwide, some analysts contend cotton growers may push 13 million acres. All the cards — demand for cotton products, high prices and some exciting new technology to further boost production — are available, but unlike peanut growers, cotton farmers appear ready, willing and able to play the cards.