“This is not a good cycle to be on, but without a futures market to smooth some of the bumps and allow people to speculate a little, it’s probably where we’re going to be. We’re not going to have a futures market for peanuts, and as producers, you don’t want a futures market for peanuts. There’s not enough volume of trade in peanuts relative to other crops to have a really competitive futures market. I’ve been to Washington several times to discuss this, and the conclusion always comes back to the fact that we’re just not large enough to have a futures market,” he says.

Looking at the last three years, 2008 saw 1.5 million peanut acres in the United States, followed by an extremely low year of just over 1 million acres in 2009, and about 1.2 million acres last year.

“As far as yields, from 2003 to 2007, we had very stable yields, going from roughly 2,900 pounds per acre up to about 3,160 pounds per acre or so. But look at what happened in 2008, 2009 and 2010. We got a lot of new products to help manage our peanuts, Extension got the word out about these products, and we had new varieties that yielded extremely well,” says Lamb.

In 2008, the U.S. averaged 3,426 pounds per acre. In 2009, peanut producers averaged 3,400 pounds. Last year, growers averaged 3,250 pounds with one of the worst droughts in years in areas of the lower Southeast.

“Have we set a new yield plateau?” asks Lamb. “It might be a few more years before we find out.”

In 2004 and 2005, the U.S. produced about 2.4 and 2.5 million farmer stock tons, respectively. “We over-supplied the market, and in 2006 and 2007, we produced 1.7 and 1.8 million farmer stock tons. Going into 2008, the markets were very short, early season prices were high, and that spurred the acreage response, producing 2.6 million farmer stock tons. That was a long time ago, and we’re just now getting that pile of peanuts off our backs.”

In 2009 and 2010, the U.S. produced 1.8 and 2 million tons, respectively. “The carry-out that is healthy for the market is 500,000 tons. These are peanuts available from the end of the marketing year — July 31 — until new crop deliveries come in. U.S. shelling capacity is roughly 170,000 farmer stock tons per month, multiplied by three is about 510,000 farmer stock tons,” he says.

Coming into 2007, there were 630,000 farmer stock tons, 1.8 were produced, and 82,000 tons were imported for a total available supply of 2.5 million farmer stock tons.

Take off a 2-million ton demand, and this gave the U.S. 510,000 tons going into 2008.