Posted on 08/09/2005 10:24:44 AM PDT by Hi Heels
U.S. Appears Headed for a Peanut Surplus By ELLIOTT MINOR, Associated Press Writer Tue Aug 9, 5:35 AM ET
ALBANY, Ga. - Peanuts in storage plus peanuts in the field.
Right now, the United States has too many peanuts and that, experts say, could be bad news for the peanut commodity program unless something is done to whittle down the piles.
"We're afraid if we cost the government a lot of money, we'll get less in the next farm bill," said Tyron Spearman, executive director of the National Peanut Buying Points Association.
Some 215,000 tons of peanuts are still unsold from the 2004 crop and agricultural officials predict growers will produce another 2.3 million tons this year, Spearman said.
Despite recent growth in peanut consumption, Americans use only about 1.6 million tons a year and another 300,000 to 400,000 tons are exported.
That leaves a surplus of about 485,000 tons.
Farmers won't lose because their government crop program guarantees them $355 per ton. The losers could be federal taxpayers who pay the difference between the guaranteed price and the actual market value of the peanuts.
Low peanut prices increase government costs, while higher prices reduce government costs.
Last year's 2.1 million ton crop peanut crop has already cost the government $320 million, said Spearman, who spoke Friday at the Georgia Peanut Producers Association's annual buying point meeting. The 416 buying points stretching from New Mexico to Virginia buy peanuts from the farmer and grade them before shipping them to shelling plants or storage warehouses.
Georgia Sen. Saxby Chambliss (news, bio, voting record), chairman of the Senate Agriculture Committee, addressed legislative issues and the outlook for the new farm bill, which will be approved by Congress in 2007.
Costly commodity programs tend to be singled out in Congress, but Chambliss said the 2002 Farm Bill, which created the new peanut program, is successful and the peanut program has been a bargain most years.
"There's always somebody who wants to take a shot at the peanut program," said Chambliss, who challenged the industry to find new uses of peanuts.
Peanut acreage has increased after the elimination of the old Depression-era peanut program in 2002. That opened the door for peanut farming in new areas.
This year, more farmers opted to grow peanuts because it seemed to have the best economic potential when compared with cotton, corn and soybeans, Spearman said. As a result, peanut acreage increased 25 percent in Georgia and 15 percent nationwide.
Growers have been grumbling for several years that the U.S. Department of Agriculture's "posted price," the price U.S. peanuts can be sold on the world market, is too high and is pricing American peanuts out of the market. The current posted price is $337 per ton.
Stanley Fletcher, a University of Georgia agricultural economist who specializes in peanuts, said USDA officials could increase demand for American peanuts by lowering the posted price, but it would increase government costs.
"If we don't move the prices, we're going to have a lot sitting there," he said in a phone interview Thursday. "Prices have to move down to move them into the marketplace."
Spearman said U.S. shelled peanuts are currently selling for $850 per metric ton in Europe, compared with $695 per ton for peanuts from Argentina and $725 per ton for peanuts from China.
"Everybody is looking for an answer, but no one knows what the USDA is going to do," Spearman said.
Chambliss, noting that he'd been given a golf shirt made from corn the day before in Minnesota, urged the industry to "get creative" and increase peanut demand.
Then, reflecting on potential uses of peanuts, he said, "I don't know if we can make golf shirts out of it."
Great, bring down the price of peanut butter.
It won't...gov't subsidies detach the peanuts cost from your peanut butter.
"There's always somebody who wants to take a shot at the peanut program,"
The poor, embattled peanut industry. I didn't realize things had gotten so bad. These people are victims.
[/sarcasm]
When will I see the price of my favorite peanut butter come down? :)
When the price of the sugar put into it also goes down (you might want to look at the price supports on domestic sugar production).
Does this mean the consumer prices will fall?
If this means less money in the profit column for the Carter peanut farm, I'm all for it.
Thanks to your peanut oil car the rest of us will have to certify peanut free to sell our cars lest the peanut allergy folks sue.
If they'll deliver free I'll take 200 lbs boiled.
MMMMMM, my favorite.
Here's a use invented by You Dirty Rats -- use peanut oil to power Jane Fonda's loozer antiwar bus tour. She can take Jimmy Carter with her.
Better yet, Uncle Sam should stop providing a price guarantee for commodities. Let the market work.
Utterly insane.......the excess tonnage is going to rot in those warehouses, and the price of peanuts and peanut butter particularly continues to rise in the supermarket..........
Nope, this one falls squarely on Bush. From the article:
Costly commodity programs tend to be singled out in Congress, but Chambliss said the 2002 Farm Bill, which created the new peanut program, is successful and the peanut program has been a bargain most years.
Which is exactly what prompted the airlines to action.
That is the best solution.......and on all of them.
I'm calling the Senate right now:
"Senator Chambliss, as a small-government Republican, do you think you can end all government subsidies and anti-free-market support of commodities, beginning with peanuts? Hello? Hello?"
Seems that on some issues, our boys are as bad as theirs. Oh well -- we get shelled again. That's politics!
Then why is peanut oil do damn expensive?
I think you are right on there - I've seen people get positively FREAKY about peanuts being in some cookies, and there not being any warnings posted...
You are preaching to the choir, FRiend, preaching to the choir.
Interesting note on these crop subsidies...the tobacco subsidy is currently being phased out.....primarily due to the lobbying efforts of Philip Morris looking for lower prices on leaf. I've read numerous stories of tobacco farmers jumping on the buyout an immediately switching crop to thumb their nose at PM.
ping
When I was in elementary school in the 50-60s, the school snacks and cafeteria ran on government surplus. We had a snack of salted peanuts mixed with raisins given to us in little paper cups. I loved it!
One year there was a turkey surplus and the cooks made a whole Thanksgiving style lunch about every week until they used up the turkeys.
Another dish I loved was buttered corn bread served with pitchers of honey on the cafeteria tables. No wonder I was a fat kid!
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