New Year, Old Problem

It’s hard to get through the holiday season without gaining a little extra weight, and it’s not just the Christmas cookies and treats, but also turkey and cornbread dressing and gravy — yum! The fruitcake is certainly safe with me — where do they grow those oddly colored fruit anyway? But it seems nothing much else is.

Stuffed is a pretty good way to describe peanut warehouses right now as well. As you can read from Tyron Spearman’s Market Watch on page 6, all markets are aware that there are too many peanuts. Even if the final numbers are not what USDA NASS had estimated, it is still too many.

As Spearman further writes in his Peanut Farm Market News, some additional factors impacting marketing decisions are as follows:

• Producers have until Jan. 31, 2018, to place peanuts in the Market Loan Program.
• Peanuts in the Market Loan can be stored for nine months at which time the peanuts must be sold to a handler or forfeited to the government as a farmer receives only the loan value.
• Offers: $20 per ton above the loan rate or about $375 per ton for un-contracted runner peanuts.

Another offer from Spearman’s report is a flex contract for unsold 2017 crop farmer stock. The base option is $ 0 – $ 354.32 per ton. The mediums price range is $.45 minimum to $.55 maximum, with the maximum the seller could collect at $ 135 per ton. For each cent per pound that the medium price exceeds $.45, the seller is eligible to collect an additional $ 13.50 per ton. The current medium price reported is $.46 pound. With the current $.46 per pound for mediums, contracts would be about $355 per ton plus $13.50 or $368.50 per ton.

Spearman says this contract will allow the farmer to ride with the market.

The New Year may usher in a fresh feeling and renewed enthusiasm to start another planting season, but it doesn’t bring easy answers to the peanut marketing dilemma.