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Submitted by George Elliott on Fri, 10/19/2012 - 1:40pm.
Too many peanuts has kept prices low throughout the 2012 growing season and the economic outlook isn't too rosy for next year as the crop seem headed toward large, if not record, this year. Alas! That’s great news for us consumers, however. Anything from spreads, to oils, to the raw, roasted and boiled kinds, prices will soon head down from near record highs over the last year or so.
The latest USDA reports have peanut production in the U.S. set at 3,832 pounds per acre, which is up 446 pounds per acre from last year. If harvest weather continues to be excellent, this could be the highest yielding peanut crop on record. Peanut industry experts warned growers prior to planning time against over-planting. With plenty of peanuts already in the pipeline before the 2012 crop was planted, it seems apparent there will be an over-supply of peanuts and correspondingly low prices for the 2013 crop.
As for livestock producers and consumers like us, the Southeast news is not good. The USDA estimates soybean production will be down by 9 percent from 2011 production. Combined with below average production in other parts of the world, it appears that global demand for soybean meal and oil will remain high and so will prices. You might not eat meat (like me), but believe me, soybeans and soybean derivatives, for sure.
You’ll be surprised where you’ll find some type of soy product, and not just in edible items. North Carolina has the largest acreage of soybeans among the Southeastern states and is usually a good barometer for overall production in the region. This year’s crop is estimated to average 35 bushels per acre, 1 bushel above the record yield set in 2009. Production is forecast to total 53.9 million bushels, up 30 percent from last year, and harvested acres are projected at 1.54 million acres, up 180,000 acres from 2011.
Corn production in the U.S. is estimated to be down by 13 percent from 2011 production levels. Though corn production in most Southeastern states is projected to be up slightly, severe losses in key corn producing states in the Midwest seem certain to drive overall production down. The combination of losses in both soybean and corn production seems certain to keep prices high. Subsequently, high grain prices seem destined to keep livestock numbers down, prices high, and getting a wide variety of grades a bit more difficult.
In general, U.S. producers grew too much of commodities that are in an over-supply situation and not enough of crops that are in high demand on a global basis. This combination of production and economic realities is sure to make crop planning difficult for Southeastern growers in 2013.
By: George Elliott