If recently published U.S. peanut yield and production forecasts hold up through harvest, the U.S. peanut market is on track to remain more farmer-friendly than it's been in recent years, along with shellers enjoying a solid supply of peanut to keep moving forward.
According to the August 2021 Oil Crops Outlook, USDA predicts U.S. peanut growers in 2021 will average 4,183 pounds per acre, or about a 10% higher average yield than last year. U.S. peanut farmers plan to harvest 1.587 million acres in 2021, or almost 2% less than last year. The forecasted average yield matched with the harvested acres would produce 3.318 million tons of peanuts, or 8.2% more than the last marketing year.
According to USDA, market demand or disappearance are about 3.315 million tons, a 6.6% increase. The domestic food usage is forecast to be up 3.1%. Exports are expected to increase by 11.5% to 800,000 tons. Ending stocks will increase to 1.135 million tons, up from last month’s 1.075 million tons. These updated USDA numbers were also published in the Aug. 18 issues of the Peanut Marketing News.
Earlier this summer and before these new numbers, Marshall Lamb said the 'sweet spot' for the U.S. peanut market and the 2021 crop may be around a 4,100 pound per acre average, which is close to the average yield growers reached in 2017. Lamb is a peanut economist and research leader for the USDA National Peanut Laboratory. Even with the higher average yield and the 3.318-million-ton production that USDA now predicts, the current market status quo would hold with a slightly higher carryforward than the current marketing year. That's a good thing.
The carryforward supply from 2020 into the 2021 marketing year was around 900,000 tons, which was a healthy carryforward number from one marketing year to the next. The carryforward is an important economic indicator for the peanut market. Early planting contracts for 2021 peanut production were between $475 and $500 per ton, and the best growers have seen in several years.
"We’ll have to see if these new numbers hold correct. We still have a way to go with this year's crop. But these numbers look good for the market, especially with the increased demand numbers. For the market to remain healthy throughout the supply chain this year and next, growers need to be able to deliver a good-yielding, high-quality crop this year. That would benefit them, the shellers and consumers," he said.