Peanut acres in the U.S. decreased 5% in 2021, but with strong yields, total production ended almost 9% higher than in 2020. The 2022 crop year is shaping up to start with a similar story on acreage. However, early indications point to the potential for a different result at the end of the year. The prospective plantings report by the USDA was released on March 31, 2022, which showed U.S. peanut farmers intend to plant 3.4% fewer acres in 2022 compared to a year prior. This decrease in intentions has been driven largely by high prices for other row crop alternatives and thus favorable marketing opportunities for other crops. This competition for acres has been recognized by shellers who have offered higher contracts over the past few months than had been offered in recent years.
While a decline in acres of less than 4% does not seem to be very much, especially after a year of high yields, the distribution of that decline has the potential to have a much larger impact on production. In 2021, the top three states in planted acreage were Georgia, Alabama, and Florida (see Table 1). These three states accounted for about 71% of the total U.S. peanut acreage last year and are forecast to plant 95,000 less acres this year, a decline of 8.2%. Offsetting some of those lost acres are increases in South Carolina and Texas, with 20,000 additional acres planned in each state. The challenge here is going to be the weather.
The West Texas area where peanuts are produced is currently facing extreme drought (U.S. Drought Monitor as of April 14, 2022). The National Oceanic and Atmospheric Administration (NOAA) expects this drought to continue or expand throughout the spring. This may make planting extremely difficult in that region. Even if that intended acreage is achieved, it will be important to watch how yields develop, given the expected continuation of dry weather. Texas is also not the only part of the peanut belt with dry weather. Abnormally dry and moderate drought continues across the peanut belt in Alabama, the Florida Panhandle, Georgia, South Carolina, and North Carolina (U.S. Drought Monitor as of April 14, 2022). Beyond spring planting, the southeast expects neutral conditions where tropical moisture will determine if drought conditions persist (Knox 2022).
So, on the surface, a small decline in acreage after a large crop may help balance ending stocks for the 2022-23 marketing year. This would take the current 2021-22 forecasted ending stocks of 2.3 million pounds and significantly tighten market supply. However, the location of increased acres, current drought and dry conditions, and the potential for persistent drought throughout the summer could significantly impact the fall crop and the peanut market. The risk of lower yields and less harvested acreage could potentially drop ending stocks significantly to 2016-17 levels of around 1.5 million pounds.
|Table 1. Peanut Acreage in 2021 and 2022 Prospective Plantings|
|Source: USDA NASS Prospective Plantings, March 31, 2022|
NOAA. U.S. Spring Outlook 2022: Drought to expand amid warmer conditions, March 17, 2022. https://www.climate.gov/news-features/understanding-climate/us-spring-outlook-2022-drought-expand-amid-warmer-conditions
Knox, Pam. April and summer 2022 outlook for Georgia and beyond, April 7, 2022. https://site.extension.uga.edu/climate/2022/04/april-and-summer-2022-outlook-for-georgia-and-beyond/