Moultrie Observer

Local News

September 6, 2012

Peanut crop prices vary widely

Early contracts fetch $750 per ton

MOULTRIE — While a record-breaking peanut harvest is expected in Colquitt County, the price growers get per ton can vary by $400.

Last year a peanut shortage nationwide led to record prices so farmers planted twice as many acres this year. Some farmers locked in early contracts at $750 per ton but that number recently has been cut in half, said Tyron Spearman of the National Peanut Buying Points Association.

“If they missed early contracts they are then at the bottom of the market,” Spearman said.

Approximately 50 percent of the county’s crop is under contract for $750 per ton. Sixty five percent of the local crop is purchased by Golden Peanut Co. and Birdsong. Another 35 percent is sold to smaller shellers.

Farmers without a contract get federal government loans at about $355 a ton. That crop is stored in warehouses for up to nine months during  which the grower can find a buyer.

What is not sold during that time becomes the government’s. The federal government can then sell those peanuts at lower prices for uses such as in peanut oil.

Spearman said that at harvest time during a big supply year such as the current one prices have declined, meaning the price should improve during that nine-month period.

With peanut harvest set to begin in the next few days, farmers without contracts have no option other than to accept the $350 per ton government option.

  Spearman estimates that it costs the famer about $500 an acre to grow peanuts, while a record crop this year has meant a harvest of three tons of peanuts per acre.

“The farmer is goiing to make some money this year if he got in on those early contracts,” Spearman said.

Adequate rainfall has meant there is likely to be a surplus for the first time in at least six years, he said.

  Colquitt County Extensiion Agent Glenn Beard said the high yield this year also can be attributed to peanut varieties that were not available 10 years ago. The newer varieties also are more resistant to disease.

Last year the weather had little impact on the Colquitt County peanut crop - a record-breaking yield - but now famers are hoping for dry weather while they get the crop out of the field. That work will continue for the next three or four weeks.

Also last year, farmers with early contracts were getting only about $400 per ton, Beard said.  Half of the crop was held back and sold at up to 4750 per ton when the shortage was realized.

“It’s a supply and demand thing,” Beard said.

 

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