Peanut prices are surging, sending retail peanut butter to all-time highs, after hot, dry weather reduced production in the southern U.S. this year and farmers cut planting in favor of other crops.
Farmers received an average 28.5 cents per pound of peanuts in the week ended Dec. 17, or 23 percent higher than the same time last year, the U.S. Department of Agriculture said last week. U.S. retail peanut butter prices surged to $2.238 a pound in November, the highest in records dating to 1984, according to the most recent data from the Bureau of Labor Statistics.
Much of Georgia, the biggest peanut-producing state, is experiencing “extreme” drought after months of below-normal rain, according to the University of Nebraska’s U.S. Drought Monitor. Drought conditions in parts of Texas, the second- largest producer, are “exceptional,” the most severe rating.
“The hot, dry summer in key peanut-producing regions, combined with rising energy prices, has resulted in a peanut crop that is smaller than last year,” R. Marie Fenn, the president and managing director of the Atlanta-based National Peanut Board, said in an e-mailed statement. “As food costs rise across the board, peanut butter remains an affordable and delicious source of protein.”
J.M. Smucker Co., the maker of Jif, the top-selling U.S. peanut-butter brand, last month raised prices for the product by 30 percent. That equates to an increase of less than 4 cents per 1-ounce serving, according to data from the National Peanut Board.
The U.S. produced 3.649 billion pounds of peanuts this year, or 12 percent less than last year, as both yields and acreage declined, USDA data show. Farmers planted 1.147 million acres in 2011, the second smallest area since 1915. Corn and cotton planting rose in 2011, according to the USDA.
Peanuts are planted in the U.S. in May and harvested from September to November, according to the USDA.