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."
That would be foolish.
While it is an imperfect solution, government price support of agricultural commodities are what guarantee us a stable and abundant food supply. Without them, we'd fall back into the natural cycle of "feast or famine" that is inherent in agriculture.
Having a "wasteful" and economicly "inefficient" food surplus is a luxury that we can afford.
It sure beats the hell out of the riots that would accompany food shortages.
Like the new Energy Bill of 2005. FedGov controls industry by spending money here and there rather than letting the free market run its course. Big Business is the business of FedGov.
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This is a second struggle for emancipation . . . If America is not to have free enterprise, then she can have freedom of no sort whatever.
1912 campaign-- Woodrow Wilson --
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Interesting that Conservatives agree with much of the Progressive platform
Should do well in CA, that's fer sure.
Well, now that's just nuts!
Care to suplement my food budget to cover the over priced products I purchase to pay for theat wasteful and inefficient food surplus?
I didn't think so.
The gov't guarantees the price paid to peanut farmers. This, at a cost above present "market value."
So peanut users, like makers of peanut butter and peanut oil have to pay more for their inputs than they would if the market operated freely.
Hence, you pay tax dollars to support farmers, inflating what they get for the goobers. And then you pay higher prices at the market for the products made with the artificially-inflated peanuts.
SD
government crop program guarantees them $355 per tonAnd that's why we have a peanut surplus.
In other words, Congress created a subsidy and, surprise surprise, they got a whole lot more of what it was they intended to subsidise. This is basic economics. If the gov't is going to guarantee a price that is attractive, they will get a lot of takers.
If they started a program to buy used beer cans for 50 cents a piece, they'd get flooded with used beer can "farmers" claiming their subsidies.
SD
*snort*
Nope. It's your fair share of the insurance against shortages.
If you can't afford the "over priced" food products that are in surplus because of government subsidies,
then there's no way you'd ever be able to afford them when the prices skyrocket due to shortages in a "free market".
You'd starve.
So be happy that we have such bountiful overproduction.
Willie, you've made some hilarious posts in your day, and I've thoroughly enjoyed many of them, but this one tops them all. Food riots if we didn't have government price supports?? We're doomed to starvation if we don't have the Federal Government offer price supports? How did we ever survive our days as colonists and then all the way until FDR's Soviet-inspired New Deal without these supports?? LMAO!!!!!
Private insurance would be better. Keep the government out of it.
Where was the peanut allergy epidemic in the 60's and 70's when I went through public school? Why now? That's the part I don't get...
I like peanuts, Actually I like all kinds of nuts (except liberals), but everytime I look at the prices for a little bag or can of peanuts, I continue looking for an alternative snack.
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They must be expensive...most of the airlines have discontinued those little bags of 2 peanuts each. :)
Let the markets dictate prices. Sheesh, subsidies are keeping nut prices so high it's just, well, NUTS.
What a surprise.
Kids used to play outside and roll around in dirt and, in general, expose themselves to all sorts of things. Now they live in heremetically-sealed homes with HEPA air filters and wash with anti-bacterial soap and allergies are through the roof.
They've proven that a simple thing like having a dog or cat can reduce your child's risk for developing allergies.
SD
I don't want to believe you are actually telling me that inefficient spending of taxpayer dollars is a good thing.
The subsidies should never have been started in the first place.........taxpayers supporting one segment of the population at the expense of another is not my idea of good, let alone smaller, government.
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