What is in this article?:
• The cards look good! Contracts in the Carolinas and Virginia are for $700 a ton for Virginia types and $650 a ton for runners, with a $25 premium for high oleic varieties.
• The big concern is that U.S. growers will plant a record number of acres of peanuts without having a contract in hand and turn the supply versus demand ratio from favorable for good peanut prices to one that will insure a return to low prices in future years.
THE 2012 PEANUT crop may be the most valuable in history.
The cards seemed to be stacked for a big increase in peanut acreage across the Southeast this year, but playing the hand out may be a wiser economic move than going all in with peanuts.
It’s been well documented that peanuts have sold for more than $1,000 a ton and plenty of growers who didn’t contract in 2011, taking the $355 a ton government loan, made lots of money when those peanuts sold for unsustainably high prices.
The cards look good! Contracts in the Carolinas and Virginia are for $700 a ton for Virginia types and $650 a ton for runners, with a $25 premium for high oleic varieties.
As of the last week in January those contracts had only been offered in the V-C Peanut Belt and in Arkansas. Yes, Arkansas. A sheller in Oklahoma is offering the same contracts to Arkansas growers willing to try peanuts.
Some things new growers should consider about the contracts include:
• As of late January no contracts have been offered to new growers. Contracts offered in the V-C area are based on 2011 acreage.
• Also, the contracts that have been offered are for a percentage of the crop at $700 a ton and higher percentage at $600 a ton. Some buyers are allowing growers to take the $700 and not sign the $600 contract and some are requiring growers to sign both contracts to get the higher prices.
Another indication of big increases in peanut acreage is the increase in sales of peanut equipment.
KMC, a major manufacturer of peanut equipment, has taken more pre-delivery orders for equipment than at any time in the company’s history.
New growers hoping to buy equipment will have two problems.
The first is availability accompanied by high prices for new or used equipment.