2008 Peanut
Situation and Outlook
T.D. Hewitt
N.B. Smith
UF- Marianna
UG - Tifton
2007 Situation
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more crop acres in SE
lower peanut and cotton acreage
dry weather in Southeast
yields pressured
disease problems
farm bill discussions
loss of storage costs program
Peanut Situation
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carryout dropped
demand has stabilized
exports up
costs higher
prices up slightly
Costs
Fertilizer up 45% in
four years
Fuel up 70% in
four years
Equipment up 5%
Peanut Current Situation
SUPPLY
• 2006 US Production down 29% and thus
carryover from ’06 crop dropped to 742,000
tons, a decrease of 30%.
• Overall peanut stocks according to Stocks and
Processing Report are down 23% from this time
last year.
• However, shelled stocks are up 4% and oil
stocks are up 54%.
• US Acreage is down .5% for 2007.
• Late planted crop in the Southeast.
Peanut Current Situation
DEMAND
• Edible use in primary products has slowed
down last 2 years:
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2003/04 up 9.6%
2004/05 up 5.8%
2005/06 up 0.5%
2006/07 down 0.1%
Exports were up 23% last year.
Crush was down 6% last year.
Seed and Residual down 5%
2006/07 Total Disappearance up 1% at 2.1
million tons.
Total US Peanut Supply
2007 Proj
.5% decrease in US acreage, 2803 lb yield, 1.9 million ton use
US Peanut Yield
Lbs/Acre
(1978 - 2006)
3,500
3,250
3,000
2,750
2,500
2,250
2,000
1,750
1,500
79
81
83
85
87
89
91
93
95
97
99 '01 '03 '05
Year
US
Avg
10 yr Avg
5 yr Avg
Peanut Disappearance by Use
Peanut Planted Acreages (1,000 acres)
2005
2006
2007*
AL
225
165
160
FL
160
130
125
GA
755
580
530
MS
15
17
19
NM
19
12
10
NC
97
85
93
OK
35
23
17
SC
63
59
59
TX
265
155
190
VA
23
17
22
US
1,657
1,243
1,225
*Source: NASS Production Report, Sept 12, 2007
Georgia Cotton & Peanut Average
Yield: 2000-2006
Peanuts: Supply and Disappearance
05/06
06/07
07/08
Stocks
1415
2167
1520
Prod
4870
3474
3335
Supply
6317
5699
4910
Food
2616
2585
2563
Crush
542
513
474
Export
491
603
525
Disap.
4150
4179
3930
Ending
2167
1520
980
Outlook
• Domestic market has slowed down, projecting a
small increase, however, for 2007 marketing
year.
• Basically consume 2 mil tons of peanuts per
year, over 50% of total consumption was
carried over from 2005 crop. Project 2007/08
carryover down to 25% of total use.
• Expect trend line yield due to dry conditions
and late planting.
2007 Farm Bill
• House passed it’s version on July 27
– Changes to Peanuts…
• Direct Payment Advance reduced
• CCP Partial Payment reduced
• Payment Limits
– DP increased to $60,000
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Loan Term ends on June 30th
Elect to receive CCP based on Price or Revenue
No Handling or Storage provided
Conservation payment for 4-year peanut rotation (PERS)
• Senate will begin markup in mid-September
• 2007 Farm Bill probably not passed until end
of the year
2007 Farm Bill
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president has other priorities
WTO
budget deficits
more involved USDA
congressional leadership issues
more players at table
net farm cash income predictions are
downward
Ag Policy
“Is evolutionary net revolutionary”