News about United State New Crop
USDA peanut production estimate
The USDA, NASS released its first production estimate for 2017 and they currently have the US peanut crop projected to come in at 3,714,435 tons with an average US yield per acre of 4,190 lbs./acre. Below is an executive summary followed by my thoughts on today’s news and the current peanut market. Attached is today’s report and US peanut crop history.
Today’s report left harvested acres unchanged from prior, 1,773,000 acres (up 14.6% from 2016).
Overall US yield is projected a 4,190 lb./acre, an increase of 14% from 2016 which would result in an overall crop size if 3,714,435 if realized. This would result in a massive 30.6% increase over 2016.
Georgia’s acres are projected at 840,000 with an average yield of 4,600 lb/acre, up 38%from 2016.
If realized, this crop would be 9% larger than 2012 (the previous largest on record).
Other commodities of note, corn production is projected to be down 7%, and cotton production up 20% from 2016.
Well, if today’s numbers hold true – there’s a HUGE peanut crop out there, and that might even be an understatement. An already quiet domestic market likely just got put on “mute.” None of today’s numbers are much of a surprise given it was already known that the acres planted were up and growing conditions have been as close to ideal as you could possibly get. Market convergence from current crop to new crop was already being seen in spot trades and in fall side coverage in most runner grades. The reality of the situation is that buyers have good coverage and shellers are well sold into 2018 so when will the market start to reflect the crop size is anyone’s guess. If the crop is indeed as large as projected today, there’s still perhaps 30% of this crop that is uncontracted farmer stock that the growers will likely have to place in the loan and contract at a later date. Shellers will likely take a wait and see approach on that as well.
Around the globe, Argentina had another rough year right at harvest, and still has about 10% of their crop left to harvest, of which quality of that remaining piece is certainly compromised. China has had good growing weather after a dry start at planting in some areas and experts project their crop is up 10% in plantings. If the US crop is as good as it has a chance to be today US shellers will have opportunities in Europe to offset Argentina’s losses, but blanching slots will dictate how much of that can be taken advantage of. China’s interest in US peanuts in the coming year won’t be known for some time, and they will likely hope for forfeitures a year from now.
Down on the farm, as mentioned earlier, growing conditions have been nearly ideal. If the rains continue and weather cooperates at harvest the size of the crop won’t be nearly as appreciated as a good quality crop. Aflatoxin and damage the past two years have caused shellers and manufacturers increased costs and headaches. Hopefully this crop will provide all with much needed relief in those areas.