What is in this article?:
• To emphasize the over-supply problem, peanut growers in Alabama, Florida and Georgia grew more than enough peanuts to meet the domestic demand for peanuts.
• In theory, all the peanuts grown in the Carolinas, Virginia, Texas, Oklahoma and a few other states were excess.
OVER-SUPPLY is likely to cause big economic problems for peanut growers in 2013.
Prior to the 2012 planting season, peanut marketing experts warned growers against over-planting.
The message didn’t take and now growers are facing the consequences of over-supply and subsequent low prices for their crop.
To emphasize the over-supply problem, peanut growers in Alabama, Florida and Georgia grew more than enough peanuts to meet the domestic demand for peanuts. In theory, all the peanuts grown in the Carolinas, Virginia, Texas, Oklahoma and a few other states were excess.
In Georgia, it seems clear now that more than 50 percent of the peanut crop was planted without a contract. There is some hope these peanuts can be sold, but the only guarantee is they will go into the Federal loan program and the grower will receive $355 per ton.
The real problems for growers who put peanuts in the loan are the delay in getting additional money for their crop and the uncertainty of how much money that will be.
This year, there is real concern the market may not be there and these peanuts could sit in the loan program for a long, long time.
Though some growers contend they are at the mercy of shellers, the sheller is really the middle man in the whole peanut buying process.
If the sheller buys and shells the peanuts, he pays back the $355 and gives the grower whatever additional price he chooses.
Buyers who did not book long would typically get 50-55 cents a pound, but the market is just not there. Manufacturers are buying a month at a time, because they are waiting for peanuts to get to the lowest price.
Shellers are using the peanuts they contracted for $600-700 a ton first. Then, when they fill the contracts, they will start offering some price for the peanuts in the loan — what that price is nobody knows.