Peanut Situation & Outlook
Southern Outlook Conference
Atlanta, GA - September 30, 2009
Peanut Situation
• US Acreage down 28% in 2009, lowest since
1915
• Sept 1 US Yield Projection of 3,397 lb. per acre
– Estimating 1.082 million Harvested Acres leads to
1.838 mil tons (record 2.574 mil tons in 2008)
• Over supply going into 2009/10 marketing year
with 2nd highest carryover of 1,056,000 tons.
• Domestic consumption appears to have
withstood salmonella outbreak at beginning of
the year.
Peanut Planted Acreages *
2006
(1,000 acres)
2007
2008
2009**
AL
165
160
195
155
FL
130
130
150
115
GA
580
530
690
505
MS
17
19
22
21
SC
59
59
71
49
SE
951
898
1128
845
NM
12
10
8
7
OK
23
18
19
13
TX
155
190
257
165
SW
190
218
284
185
NC
85
92
98
67
VA
17
22
24
12
V/C
102
114
122
79
US
1,243
1,230
1,534
1,109
*Source: NASS Crop Production Report **Sept 11, 2009
NASS June 1 FSA Cert. Acres NASS Sept 1
Alabama
170
155.4
155
Florida
120
107.1
115
Georgia
460
503.5
505
Mississippi
20
20.1
21
New Mex.
7
6.9
7
N. Carolina
75
65.6
67
Oklahoma
17
12.3
13
S. Carolina
55
45.9
49
Texas
160
128
165
Virginia
12
11.5
12
U.S.
1,096
1,056.3
1,109
Source: NASS Crop Production Report and State FSA Offices
Georgia Peanut Planted Progress(%)
by Date, 1999- 2009
Source: Crop Progress and Condition, GA Office of USDA's NASS
100
90
2009
99-08Avg
80
70
04-08Avg
60
50
40
30
20
10
Provided by National Center for Peanut Competitiveness
6/17/2009
6/10/2009
6/3/2009
5/27/2009
5/20/2009
5/13/2009
5/6/2009
4/29/2009
4/22/2009
4/15/2009
0
Georgia Peanut Pegging Progress(%)
by Date, 1999- 2009
Source: Crop Progress and Condition, GA Office of USDA's NASS
100
90
2009
99-08Avg
80
70
04-08Avg
60
50
40
30
20
10
Provided by National Center for Peanut Competitiveness
8/12/2009
8/5/2009
7/29/2009
7/22/2009
7/15/2009
7/8/2009
7/1/2009
6/24/2009
6/17/2009
6/10/2009
0
Peanut Yields
2006
2007
2008
2009
AL
FL
GA
MS
2500
2500
2780
2900
2600
2700
3150
3300
3300
3200
3400
3900
3300
3100
3500
3500
NM
NC
OK
3600
3200
2850
3500
2800
3400
3200
3700
3500
3200
3400
3200
SC
TX
3000
3550
3100
3950
3900
3400
3300
3400
VA
3200
2700
3300
3400
US
2863
3130
3416
3397
Source: NASS Crop Production
Record Yield
GA 2009 Peanut Yield Prediction by Weeks
3,600
3,500
Yields(pounds/acre)
3,400
3,300
3,200
3,100
3,000
GPC Model
2,900
Revised Model
2,800
Trend Model
NASS Forecast
2,700
Last Year Actual Yield
2,600
Wk01 Wk02 Wk03 Wk04 Wk05 Wk06 Wk07 Wk08 Wk09 Wk10 Wk11 Wk12 Wk13 Wk14
Source: National Center for Peanut Competitiveness
GA 2000-2009 Peanut Crop Condition
Index
410
2000
2001
2003
2004
2005
2006
2007
2008
2009
350
330
3000
2870
370
Crop Condition Index
2002
3450
3330
3500
3400
3150
390
310
290
270
W
ee
k0
1
W
ee
k0
2
W
ee
k0
3
W
ee
k0
4
W
ee
k0
5
W
ee
k0
6
W
ee
k0
7
W
ee
k0
8
W
ee
k0
9
W
ee
k1
0
W
ee
k1
1
W
ee
k1
2
W
ee
k1
3
W
ee
k1
4
250
Provided by National Center for Peanut Competitiveness
2700
2780
2600
Source: Crop Progress Report, NASS, USDA
Peanut Disappearance by Use
3000
1,000 Tons
2500
2000
1500
1000
500
Food Use
Crush
Production
Source: Oil Crops Outlook, ERS, USDA
'0
5
'0
6
'0
7
'0
8
'0
9
'0
0
'0
1
'0
2
'0
3
'0
4
99
98
97
96
95
94
93
92
91
90
0
Exports
Seed, Shrink, Resid
Carryover
Shelled Edible Use in
Primary Products
1,000 lbs
Candy
Aug 08’ to
Jul 09’
% Diff from
Prev. Year
367,478
-13.6%
1,102,698
+ 8.9%
Snacks
316,775
- 1.2%
Total
2,130,557
- 0.5%
153,353
+ 2%
Peanut Butter
In-Shell
Source: Peanut Stocks and Processing, NASS, USDA
US Peanut Butter Consumption
(1997.4 --- 2009.2)
290,000,000
Actual
Split
270,000,000
40.1% increase
Lbs
250,000,000
230,000,000
1.4% increase
210,000,000
190,000,000
4Q
97
2Q
98
4Q
98
2Q
99
4Q
99
2Q
00
4Q
00
2Q
01
4Q
01
2Q
02
4Q
02
2Q
03
4Q
03
2Q
04
4Q
04
2Q
05
4Q
05
2Q
06
4Q
06
2Q
07
4Q
07
2Q
08
4Q
08
2Q
09
170,000,000
Source: Dr. Stanley Fletcher, The University of Georgia National Center for Peanut Competitiveness
This Chart Data come from US Peanut Stocks & Processing.
Kelsey Whittenberger and Erik Dohlman, ERS, USDA
Kelsey Whittenberger and Erik Dohlman, ERS, USDA
Kelsey Whittenberger and Erik Dohlman, ERS, USDA
US Peanut Exports
1200
1000
M lbs.
800
600
400
200
Crop Year
Exports = 18% of total disappearance
'0
8
'0
6
'0
4
'0
2
'0
0
98
96
94
92
90
0
Source: NASS Weekly Peanut Price
Source: NASS Weekly Peanut Price
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Cents/Lb
Shelled Peanut Prices by Grade Type
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
Ones
Splits
Mediums
Jumbos
Golden Peanut Contract
• Flexible Marketing Plan
• Basics
– Option contract with a $0 option. ($355 base grade)
– No shrink charged.
– No storage and handling fees.
• New Feature
– Potential for price better than $355 through a Market
Rebate or 50/50 split in the “Golden Market Loan
Gain”
– Market Rebate = $13.50 per farmer stock ton, base
grade for every $0.01 per pound increase in runner
medium shelled goods price above $0.45 per pound.
Flexible Marketing Plan
• Similar to a minimum price contract or
delayed price contract.
• Producer locks in a price between loan
date and until 2 weeks prior to loan
maturity.
• Golden Market Loan Gain and shelled price
updated weekly.
• Shelled price to be determined by survey
of peanut brokers.
Highlights and Concerns
•
•
•
•
•
•
•
•
No shrink ($11 to $14 per ton)
No worry about storage charge upfront by warehouse.
Potential to receive higher price than $355 after harvest.
Potential to do better than Market Rebate? (i.e. bidding
for peanuts if have production shortfall)
Can you do better than 50/50 split in “Golden Market
Loan Gain”? (MLG determined by the FSA loan
repayment rate)
Where is the shelled price for medium runners right
now?
Requires Producer to continuously monitor of the
market.
Cap on how high price, 51 cent = $436 per ton
Areas Represented by the 22 United States
Representative Peanut Farms
Established and Maintained by the National Center for Peanut Competitiveness
Georgia—8 farms
Florida—2 farms
Alabama—2 farms
South Carolina—1 farm
Mississippi — 1 farm
Texas—3 farms
New Mexico—1 farm
Virginia—1 farm
North Carolina — 2 farms
Oklahoma — 1 farm
Georgia Farms: Prices to equate returns above TVIC to highest
returning crop each farm
Farm A
Farm C
Farm D
Farm F
Farm H
Farm I
Farm J
Farm V
Irrigated
Peanuts
$375
$375
$375
$405
$429
$450
$396
$375
Non-Irrigated
Peanuts
NA
$397
$503
$458
$519
$476
$470
$496
Irrigated
Cotton
$.63
$.71
$.65
$.67
$.62
$.62
$.62
$.73
Non-Irrigated
Cotton
$.96
$.87
$1.00
$.91
$.92
$.89
$.78
$.94
Irrigated
Corn
$4.21
$4.42
$4.56
$3.27
$4.11
$3.86
$3.91
NA
Soybean
NA
NA
$15.96
NA
$12.23
NA
NA
NA
Economic Viability of US Representative Peanut Farms over the
Period 2008-2015 based on AUGUST 2009 Baseline
Overall Economic Viability1
P(Negative Ending Cash)2
P(Real Net Worth Decline)3
Farm A
41-95
1-71
Farm B
69-99
1-99
Farm C
99-99
1-99
Farm D
1-1
1-1
Farm E
14-49
1-47
Farm F
95-99
1-99
Farm G
58-99
1-99
Farm H
99-99
1-99
Farm I
8-89
1-64
Farm J
99-99
1-99
Farm K
99-99
1-99
Farm L
1-7
1-30
Farm M
1-3
1-36
Farm N
65-44
1-19
Farm O
38-86
1-68
Farm P
99-99
1-99
Farm Q
1-1
1-1
Farm R
99-99
1-99
Farm S
99-99
1-99
Farm T
67-99
1-98
Farm U
65-94
1-78
Farm V
1-1
1-1
1) Viability is classified as good (green), moderate (yellow), and poor (red) based on the probabilities of
<25
26-50
>50
having negative ending cash reserves and losing real net worth:
2) P(Negative Ending Cash) is the probability that the farm will have a negative ending cash reserve. Reported values represent the probabilities for 2008 and 2015.
3) P(Real Net Worth Decline) is the probability that the farm will have a loss in real net worth relative to the beginning
net worth. Reported values represent the probabilities for losing real net worth from 2008 to 2009 and 2008 to 2015.
Economic Viability of the
Southeastern Representative Peanut Farms
over the Period 2005-2010
based on August 2004 Baseline
Overall Economic Viability1
P(Negative Ending Cash)2
P(Real Net Worth Decline)3
Farm A
1-1
1-1
Farm B
3-99
1-86
Farm C
1-35
1-1
Farm D
1-1
1-1
Farm E
1-1
1-1
Farm F
1-43
1-48
Farm G
1-1
1-1
Farm H
96-99
1-11
Farm I
1-1
1-1
Farm J
1-3
1-1
Farm K
1-1
1-1
1) Viability is classified as good (green), moderate (yellow), and poor (red) based on the probabilities of
<25
26-50
>50
having negative ending cash reserves and losing real net worth:
2) P(Negative Ending Cash) is the probability that the farm will have a negative ending cash reserve. Reported values represent the probabilities for 2005 and 2010.
3) P(Real Net Worth Decline) is the probability that the farm will have a loss in real net worth relative to the beginning
net worth. Reported values represent the probabilities for losing real net worth from 2002 to 2004 and 2002 to 2010.
Outlook
• Potential for another record yield according to
crop conditions, however, lateness of crop is not
likely taken into affect.
• Another acreage adjustment down?
• I lean toward 1.75 million ton crop and 600,000
ton carryover.
• 2010 plantings will depend on
– Spring contracts, $425-$450
– Rotation
– Prices of cotton, corn and soybeans