Yesterday, we began our visit with Bob Sutter, Executive Director of the North Carolina Peanut Growers Association on peanut prices and potential peanut acres this growing season.
Sutter says that while prices being offered this year are high due to a couple of factors: competition for acres and a marginal crop in 2010, he sees prices staying high due to low carry-out the past several years. Sutter says that the years of having barn after barn after barn filled with raw commodities are not a part of the present, and will keep prices elevated for the foreseeable future:
“Last year was not a particularly good year, as far as peanuts are concerned, for having a bumper crop, which we did not. So we have decreased our supply of peanuts and if acres go down, nationally, which I think they will -- some people are talking about 40 to 45% decrease in peanut acres in Texas and decrease in acres in the southeast -- so I think we could see considerably less production coming up for the 2011 crop, which will get our supply to the low side as far as carryout goes into the 2012 crop.”
As for the after effects in this country of the Japanese earthquake, Sutter says that we’ll probably see the most effect in energy:
”The issue of energy is a big issue in the United States and what this will do to the rebirth of interest in the nuclear energy in the US, I don’t know. I hope it won’t have a chilling effect, but I suspect it will have some effect, which will put more pressure on oil fired, natural gas generation of electricity, which means that we’ll have upward pressure price for petroleum, which runs the farm. It’s where our fertilizer is made from…natural gas. It very well will have some effect, just how much, I don’t know.”
As for humanitarian efforts going to Japan, Sutter says that while peanut products will surly be involved, but, doubts there will be any long-term effects on market expansion:
“We have had several trade missions to China and Japan, they produce a lot of peanut butter and a lot of peanut products in China for Japan. Japan actually has facilities in China that they import from China to Japan, the peanut products. There's going be a lot of humanitarian aid that goes to Japan and I’m sure that peanut butter and peanut products will be part of that. But it’s not an opportunity, I don’t think in terms of a lasting market, but it is an opportunity for humanitarian aid, and it will certainly take some of the supplies that are on the market.”
Executive Director of the North Carolina Peanut Growers Association, Bob Sutter