ALBANY, GA (WALB) - 2007 was a year that most farmers in the southeastern U.S. will never forget. Plagued by a lingering drought, many crops suffered. But despite dry conditions - the peanut crop prevailed - beating expectations and setting the bar higher for 2008.
"The USDA says an increase of 19% acres over last year. That's in the U.S." says industry analyst Richard Barnhill of Mazur & Hockman.
He says decent rainfall allowed for what early on appears to be a good crop. USDA estimates show a yield of 3,100 tons per acre in Georgia and a nationwide production forecast of more than 2.2 million tons. When compared with 2006 and 2007, production numbers are significantly higher. But according to Barnhill, the increase will prove beneficial on the market.
He says, "It's a fairly tight supply coming into the '08 crop. And the '08 crop will be harvested in September of this year. Supply and demand, we can use a big crop. We actually need a big crop this year."
A big crop, coupled with a weakened U.S. dollar, has the nation's peanut crop in high demand overseas. This also comes at a time when major peanut exporters like China aren't coming off as strong in the international marketplace.
"Exports are up significantly this year. Maybe as much as 20% because China is not such a big factor. They're not exporting like they traditionally have. Mexico, Canada, Europe are in demand for U.S. peanuts," says Barnhill.
Barnhill predicts '08 prices at around 60 cents per pound and says that production will need to be maintained in 2009. But with farmers facing other planting options next year such as corn, soy beans and cotton, it's unclear if the '09 peanut crop will be as strong.