More peanut problems: heavy rains delay crop plantings

Articles
May 01, 2009

More peanut problems: heavy rains delay crop plantings

Peanuts have been getting crunched lately. First came the salmonella scandal, which prompted the largest-ever food recall in U.S. history. Second, extreme rainfalls began to douse the prime peanut growing areas of Georgia. How quickly can this industry rebound from two disasters in quick succession? Will the combined effect make the peanut industry look like a shell of its former self in 2009? What will be the impact on pricing, and in turn on demand, given the tight spending mentality that prevails? These questions may have to wait until after farmers bail themselves out so their peanut crops can grow. But the effect on supermarket categories and their suppliers could be broad, touching everything from peanut butter to baked goods, from snacks to sauces and marinades. Between late-March and mid-April, 12 to 18 inches of rain fell in rich peanut territories of The Peach State, that account for more than 40% of the United States’ peanut production, reported Storm Exchange: “This rainfall is 300% to 500% of normal precipitation for the period. Although weather has turned drier over the past week, the copious amounts of rainfall have caused significant field erosion, forcing farmers to haul in new dirt.”

Peanuts have been getting crunched lately. First came the salmonella scandal, which prompted the largest-ever food recall in U.S. history. Second, extreme rainfalls began to douse the prime peanut growing areas of Georgia.

How quickly can this industry rebound from two disasters in quick succession? Will the combined effect make the peanut industry look like a shell of its former self in 2009?  What will be the impact on pricing, and in turn on demand, given the tight spending mentality that prevails?

These questions may have to wait until after farmers bail themselves out so their peanut crops can grow. But the effect on supermarket categories and their suppliers could be broad, touching everything from peanut butter to baked goods, from snacks to sauces and marinades. 

Between late-March and mid-April, 12 to 18 inches of rain fell in rich peanut territories of The Peach State, that account for more than 40% of the United States’ peanut production, reported Storm Exchange:  “This rainfall is 300% to 500% of normal precipitation for the period. Although weather has turned drier over the past week, the copious amounts of rainfall have caused significant field erosion, forcing farmers to haul in new dirt.”

Temperatures that averaged 2 degrees to 4 degrees below normal in the first two weeks of April weren’t ideal for drying out fields. That delayed field preparation by at least two weeks, which will probably put off aggressive planting until later in May, Storm Exchange said. Peanut planting typically begins in early May and concludes by mid-June.

The weather-related problems are a factor in this year’s projected 25% to 35% reduction of planted acres vs. 2008—when Georgia yielded a record crop of 2.57 million tons of peanuts on 640,000 planted acres. Last year’s surplus is the bigger reason for the cutback.

For now, peanut farmers are slogging it out. In the coming months, with prices possibly higher, consumer demand will determine their fate for the coming year.