As we proceed through the 2023/2024 marketing year, crop prices are expected to decrease generally compared to the previous marketing year. While prices of corn, cotton, soybeans, wheat, sorghum, and rice are expected to drop this marketing year, peanut prices are expected to increase to a marketing-year average of $550 per ton, reaching their highest level in over a decade according to the USDA (Figure 1). This would be the fourth straight year of increased peanut prices and a $14 per ton increase from 2022/2023. While the other crops are seeing increases in their ending stocks, peanut stocks look to remain stable.
Figure 1: Peanut Prices by Marketing Year
On the production side, yields are projected at 3,740 lb. per acre, which would mark the lowest level since 2016. This would fall well below the 10-year average of 3,942 lb. per acre. Severe drought in 2023 across the predominant peanut-producing regions of Alabama and Florida — two of the top-four peanut-producing states— has led to forecasted 24% and 26% yield decreases compared to 2023 for those two states, respectively. This comes in a year that was expected to achieve a significant boost in peanut production, due to a 16% increase in planted acres. Now, peanut production is only projected to increase by 8% over last year and reach 2.99 million tons.
Accompanying the bullish production estimates, peanut demand is also looking strong. This is driven by a 4.5% projected increase in peanut exports and a 3.7% increase in domestic food use. If production and disappearance projections are realized, this would mean carryover at the end of the 2023/24 marketing year would remain almost unchanged at 1.02 million tons, providing support for continued strong peanut prices.
Figure 2: Peanut Production, Disappearance, and Ending Stocks by Year
Sources:
USDA Economic Research Service. Oil Crops Outlook: November 2023. Available at: https://downloads.usda.library.cornell.edu/usda-esmis/files/j098zb08p/8g84p626f/hx120116v/oiltables.xlsx
USDA. World Agricultural Supply & Demand Estimates: November 2023. Available at: https://www.usda.gov/oce/commodity/wasde/wasde1123.pdf
Sawadgo, Wendiam. “Why are Peanuts Bucking the Declining Crop Price Trend?” Southern Ag Today 3(49.1). December 4, 2023. Permalink
