The Enid News and Eagle, Enid, OK

Ag

January 12, 2013

Good peanut crop could mean lower prices in grocery stores

ENID, Okla. — ATLANTA (AP) — Choosy moms and dads may be packing more PB&J in lunches this winter, when the cost of a jar of Jif or Skippy is expected to fall even as other grocery prices rise.

Peanut butter prices soared last year after a drought and high heat in the Southeast, where most peanuts are grown. That region got a break in 2012 while farmers in most of the rest of the United States suffered huge losses in the widest drought in decades.

Farmers are expected to bring in two-thirds more peanuts than they did in 2011. That could mean a price drop at the grocery store.

“After last year’s small crop, we saw peanut butter prices on average rise 30 percent or more,” said Patrick Archer, president of the American Peanut Council. “With this year’s excellent crop, the supply and demand should come back into balance and peanut butter prices should come back to a more normal level at the retail level.”

A 10 percent decrease on a $3 jar of peanut butter, for example, would translate to a savings of 30 cents. That may seem nominal, but the impact is greater for food banks and other big buyers.

Bill Bolling, founder and executive director of the Atlanta Community Food Bank, said food banks usually must buy protein-rich items like peanut butter, beans and meat. His organization buys anywhere from 200,000 to 400,000 pounds of peanut butter each year, depending on the price.

“If costs go down 10 percent or 20 percent, we can buy that much more product,” Bolling said. A big supply also increases the possibility of donations — for instance, a company may donate large shipments if there is a mistake in packaging or a huge surplus, he said.

Bolling said peanut butter is one of the most popular products at the food bank because children like it, it’s high in protein and it has a long shelf life.

Peanuts are already considered a staple of the American diet, with the average U.S. consumer eating about 6 pounds of peanut butter and other peanut products each year, according to estimates from the American Peanut Council, an industry trade group. But peanut butter could become even more attractive as strong global demand, high prices for livestock feed and a huge sell-off of cattle and other animals in drought keep pushing up meat prices.

U.S. farmers are expected to produce more than 3 million tons of peanuts, according to figures from U.S. Department of Agriculture. That’s a 66 percent increase over 2011, when growers produced more than 1.8 million tons.

Experts say several factors created the perfect conditions for a banner year. High peanut prices after last year’s small crop encouraged farmers to plant more; USDA figures show acreage was up nearly 50 percent in 2012 compared with a year earlier. Farmers in the Southeast also got a break in the weather. Spring came early, allowing them to plant sooner. Temperatures were generally milder, and thunderstorms in August and September provided some much-needed relief in the weeks before farmers began the peanut harvest, which is currently in full swing.

Experts also say a peanut variety developed in recent years is boosting the record yields, in part because it tends to be resistant to disease.

“In this south Georgia area, we probably had as good a growing season as I can remember in a long time, and maybe in my 26 years (as executive director),” said Don Koehler, director of the Georgia Peanut Commission.

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