Fortunately, exports, including large sales to China and Europe, will help consume much of the surplus.

Spearman said both regions got back into the U.S. market after prices dropped to $450 and below. "China likes our high quality peanuts for their cooking oil," he said.

There are projections of 600,000 tons of U.S. export sales. But if Argentina has a short peanut crop, that could reach 800,000 tons.

Spearman added that U.S. shellers may require nine months to wade through surplus peanuts in storage before reducing stocks.

 "A lot will depend on whether farmers hold peanuts in storage and wait for higher prices, or move them through the government loan program at $385 per ton," he said.

Planted acres are projected in the 1.16 million to 1.2 million range, with USDA projections out March 28.

The 1.2 million acreage level, sought by shellers, would produce about a 2.2-million-ton crop, Spearman said.

"A lot will depend on cotton prices and peanut prices," he noted. "If cotton is at 85 cents to 90 cents and peanuts are at $450, we will see more cotton acres.


Texas peanut acres are projected at about 110,000, down about 15 percent, while Oklahoma acres are forecast at about 20,000, down from 22,000 for 2012.

Mike Kubicek, executive director of the Oklahoma Peanut Commission, said there remains demand for high oleic peanuts grown in Oklahoma and Texas, so acres with those varieties should remain steady.

Enhanced peanut promotion campaigns through the National Peanut Board should increase domestic demand, said Bob Parker, NPB president and CEO.

"Health and wellness, and flavor and value" are keys areas of the campaign, he said, pointing out that NPB's "peanut butter for breakfast program is a great opportunity for consumers to eat more peanuts."

Parker said that even though only 0.6 percent of the population suffers from peanut allergies, "we have a public relations problem because there is a huge gut reaction" by some to ban or limit peanuts in schools, airline flights and other public areas.

“However, thanks to overall efforts by NPB to educate consumers and food service providers, peanut butter consumption has increased steadily the past decade, Parker said.

Spearman said the peanut industry is hoping the next farm bill maintains a good peanut marketing loan program, crop insurance, research funding and export promotion. "The MAP (market assistance program) helps generate our foreign sales," he said.


Want access to the very latest in agriculture news each day? Subscribe to Southeast Farm Press Daily.


          You might also like:

Incremental crop sales can be useful method of securing return on risk

Prospects for later corn, soybean plantings may alter market direction

Beltwide assessment would fund South Texas boll weevil buffer

Four challenges of herbicide-resistant weeds