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US: More peanuts may mean lower prices
According to the Georgia Peanut Commission, the state average last year was about 4,500 pounds. That's a thousand pounds more than the average 3,500 put out yearly in each of the past ten years.
However, more peanuts doesn't equal more profit. As supply goes up, the price goes down.
"Considerably lower than last year," Dawson says, referring to profits from buyers. "Last year, most contracts were about 500 dollars. The previous year there were contracts for 750 dollars. So it's declined. When you overproduce and flood the market, it does drive depressed prices."
Mother nature also plays a factor. A lack of rainfall means that the grower has to pay for higher watering costs.
"It has increased costs or production costs, but its part of a way to at least produce something and not come up with a negative," notes Dawson.
Lower profits and increased production cost means less money in the grower's pocket, but a little more in yours.
Greater production is a double edged sword.
"Farmers are trying to produce as many as they can per acre, so they can get that return per acre,"Dawson explains. "But, on the other hand, it does hurt you when you overproduce."
According to the Georgia Peanut Commission, Georgia produces fifty percent of the country's peanut crop, contributing more than a billion dollars to the farming industry.
Publication date: 7/28/2014
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