Average Peanut Prices per Ton Growth, Peanut Association 2011

Average peanut price was $425 to $450 per ton. This year, shellers are already offering growers $550 per ton for peanuts. Last year?s drought and excessive heat in the growing season was bad news for Jackson County cotton and peanut producers.

But a silver lining has appeared, despite the cloudless skies of 2010. The drought caused a supply-demand crisis that may help farmers in 2011. According to Ken Barton, executive director of the Florida Peanut Growers Association, buyers are already offering higher prices for the coming crop.

The drought resulted in fewer high-quality peanuts going to market. Even though Jackson County farmers were able to realize yields of 3,200 pound-per-acre, many peanuts were crushed for oil rather than being packaged as edible products in candy, raw peanut snacks or for other uses that bring higher prices for growers.

Jackson County farmers planted about 35,000 acres of peanuts collectively last year.

About 35 percent of that never made it to the edible peanut market, compared to about nine percent in a normal year.

Buyers need to increase their supplies from last year?s shortfall, and ensure they?ll have enough in the coming year. So buyers are offering more lucrative contracts now, Barton explained.

In the cotton market, he said a similar increase is also being reported. But Barton also said there?s a. Phosphate fertilizer, which peanut farmers need in abundance, is going up in price. Last year, it cost about $440 a ton; as last week, the going price was $590 a ton.

Farmers use about a ton of fertilizer mix for every four acres. That, and the rising cost of fuel and other supplies, Barton said, could put a significant dent in peanut farmers profits.

Farmers can harvest more than 5,000 pounds of peanuts per acre in a good year, he said, if they irrigate. Rising expenses can easily erase the revenues from higher prices paid to a farmer for that 2.5 ton yield, he cautioned.

Having said all that, however, Barton is fairly optimistic about the coming year ? provided the weather cooperates.

If not, farmers who signed contracts for their coming yields will face tough times if they don?t produce enough ?edible? peanut crop to fulfill their obligations.

Barton said that, overall, peanut farmers are in a good position going into the planting season this March and April.

?This (drought and heat) is going to put the supply and demand back in line,? Barton said. ?It has increased the price because there?s not a huge abundance of peanuts. We?re in a position now that we haven?t been in for many, many years. We have options with good prices.?

He said cotton farmers find themselves in a similar position. ?Farmers here usually rotate cotton and peanuts, and both markets have higher prices now,? Barton said. ?A lot of farmers have the luxury now of waiting to see what?s going emerge as the best course. This is good, but of course there is a downside. Along with the increase in commodities prices, production costs are up for fertilizer, diesel, and crop protection materials.?