Contributing Editor
The 2024-25 peanut season will be remembered as one of the most chaotic and unpredictable years in a row-crop farmer’s life. The erratic weather, including two hurricanes, tested the plans for a profitable year, and farmers had to couple proven university recommendations with “thinking outside of the box” to solve many problems.
With corn and cotton not profitable, peanut planting held all the potential. However, this often means too many peanuts, which tilts supplies and pushes contract prices lower. The new season got off to a rough start with cold soils, followed by two weeks of rain and numerous bouts of severe weather from late April through June.
Time was running out on planting decisions, and some planting was delayed until mid-June after the crop insurance deadline. The entire peanut belt was chopped into sections, some with too much rain and some areas of drought. In August, Hurricane Debby hit Northeast Florida, Southeast Georgia and South Carolina, and flooding delayed field work.
The First Production Estimate
Consumption updates showed peanut product sales were down about 5%, but prices were holding steady. Contract prices for peanuts were relatively low compared to university cost estimates, but cotton and corn were worse.
The U.S. Department of Agriculture’s Farm Service Agency confirmed planted area at 1.8 million acres, up 10% from last year. The first production forecast was 6.71 billion pounds or 3,354,000 tons, an increase of 14% over last year.
Beginning stocks from last season were about 740,000 for a total 2024 supply of 4,094,000 tons if the estimate is delivered to the warehouses. Deduct the demand or disappearance including exports, 3,283,000 tons. Ending stocks for this year are estimated at 811,000 tons. These are the peanuts needed to fill the pipeline from August until November each year or until the new crop is shelled and ready. With 200,000 tons of usage per month, four months will mean the market has a tight supply and prices should improve next year.
Hurricane Helene Devastates Agriculture
Just as buying points were gearing up for peanut harvest, which was already two to three weeks behind, Hurricane Helene hit the Big Bend area of Florida. The storm pushed north into Georgia and North Carolina and east catching East Georgia and South Carolina with very heavy rains and gusty, damaging winds. About one-third of the crops in Georgia, including cotton, soybeans, peanuts, pecans and pine trees were pounded with severe winds that caused catastrophic outcomes.
Producers should document all damage and losses before, during and after cleanup as well as financial records of cleanup and repair. Unfortunately, assistance and crop insurance will take some time.
Numerous peanut farms, buying points and shellers sustained significant damage to buildings and equipment. The Federal State Inspection Service reported that 26 buying points did not have power following Hurricane Helene and could not receive peanuts right after the storm. Roads were being cleared as quickly as possible so that trucks, trailers and tractors could get around to harvest and move peanuts. Farmers also had to remove fallen trees from farm roads and peanut fields before harvest could continue.
A Post-Hurricane Estimate
With less than 10% of peanuts harvested, growers waited for peanut fields to dry out so harvest could continue and hope that it happened quickly enough that the crop did not deteriorate.
These growers were working with buying points to determine drying capacity and availability of electricity. West Georgia and Alabama were still in dry conditions as harvest was picking up.
Peanuts planted in June needed about two weeks of warm weather to mature, but temperatures were already predicted to drop into the 40s at night, which would slow maturity even more.
Early projections are about a 10% crop loss caused by Hurricane Helene. If growers cannot harvest the remainder of the crop in a timely manner, the loss is expected to be more like 30% in a short period of time in storm-hit areas. Farmers are being urged to avoid areas that had water standing for days, or if drought was the problem, keep those pivot corners separate because of the likelihood of aflatoxin.
Domestic Markets
The 2023 crop was firm on prices and difficult to get offers on, depending on sheller and grade. Shellers have recently redeemed most of the loan peanuts and moved them to the market. Splits were .68 cents per pound and mediums/jumbos .70 cents per pound because the trade felt that inventory was short.
New crop offers have become hard to confirm with weather damage and unknown production totals. Prices are .57 cents per pound for splits, .58 for mediums and .59 for jumbos. Buyers sensed a big crop would lower prices. It all comes down to growing conditions and yield. Ultimately, who wants to hold the risk?
Contract offers to growers have remained at $500 to $525 per ton for runner type, if a farmer needed a guarantee to secure financing. A few perks included $25 per ton for irrigation, high-oleic varieties and hauling. Virginia-type contracts were mostly $550 to $600 per ton depending on growing area.
Export Markets
Export markets were up 17.5% in volume for the year at 585,789 metric tons compared to last year’s 498,330 metric tons. Domestic markets were down 4.1% in raw-shelled usage with in-shells down 5.9%. Government purchases were up 44% compared to the previous year for peanut butter and roasted peanuts.
While Congress is working on uniting the House and Senate Farm Bills, another agricultural delegation is proposing a direct payment or bridge appropriation to help farmers survive until the new Farm Bill is ratified.
Unpredictable and chaotic, that’s where we are. But hang on, it’s got to settle down soon.
