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Aftermath Of An Outbreak: Peanut Prices Down

The deadly Salmonella outbreak caused by peanut processing plants in Georgia and Texas is still being blamed for costing growers money, but it may just be good old supply and demand at work.

For certain peanut prices for now are down.

Peanut prices received by farmers for all farmer stock peanuts averaged 23.8 cents per pound for the week ending October 10. The price per pound decreased 0.5 cent from the previous week.

The U.S. Department of Agriculture’s (USDA’s) Agriculture Statistics Board released the Oct. 10th report on Oct. 16.

Marketings of all farmer stock peanuts for the week ending October 10 totaled 11.0 million pounds, down 130 million pounds from the previous week.

The average price of Runner type peanuts was 16.8 cents per pound for the week ending October 10, down 6.1 cents from the previous week.

Marketings of Runner type peanuts were 5.45 million pounds, down 90.6 million pounds from the previous week.

Growers are reporting peanut plantings of about 1.1 million acres nationally in 2009, about 28 percent less than 2008.

Fewer acres were devoted to peanuts this year because of fear demand would be lower due to the Salmonella outbreak involving the now bankrupt Peanut Corporation of America (PCA) facilities and because of the huge 2008 crop.

Manufacturers using PCA’s peanut butter or peanut paste were forced to recall more than 3,900 products, and for a while demand for peanuts plunged.   Demand has since recovered nicely, but there is still a supply overhang in the market from the 860 million pounds of peanuts produced in the U.S. in 2008.

A year ago, peanut growers were getting around $500 per ton for their product.  At today’s rates, they are getting more than $100 a ton less.   They do, however, expect demand and supply to get into a better balance.

Texas, the second largest peanut-growing state, planted just 160,000 acres this year, down from 257,000 in 2008.  Similar drop-offs are being reported in other peanut-growing states.

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