Peanut Market News – November 23, 2016

PEANUTS ARE THE MOST SOUGHT AFTER EDIBLE NUTS

Medgadget (Food Marketing Insight) News reports that edible nuts are gaining popularity as a healthy alternative to comfort foods. FMI estimates global edible nuts volume to surpass 44.5 million MT in 2016, representing market value of over US$ 70.47 Bn.

In addition to their direct consumption, demand for edible nuts for use in making spreads, confectionary fillings & bars, gravy and salad dressings is also growing. “Consumer sentiment on edible nuts is overly positive, as edible nuts are known to be beneficial in managing high blood pressure, metabolic syndrome, and visceral adiposity. Manufacturers are aware of the favorable consumer perception towards various edible nuts, and are incorporating them as ingredients in their offerings”, says FMI.

Confectionary and bakery is the largest end-use sector for edible nuts, and is expected to account for over 29% of global demand in 2016. Demand for edible nuts from the confectionary and bakery segment is expected to reach 12.5 million MT in 2016 – a 7% increase over 2015.

Among all the product types, peanuts are the most sought-after edible nuts, holding nearly 90% volume share of the market in 2016. FMI estimates global production of peanuts to surpass 40 million MT by 2016, an increase of 5.3% in 2016 over 2015.

China remains the largest producer and exporter of peanuts, with total production estimated at 14.3 million MT in 2015. Fluctuations in peanut production in China have global ramifications, especially in Europe – one of the largest importers of peanuts.

Diamond Foods, Inc., Archer Daniels Midland Company, Olam International Ltd., and Select Harvests Limited are the market leaders in the global edible nuts landscape. The global edible nuts market is highly fragmented, with the top 10 players accounting for nearly 23% revenue share of the global market in 2015. Leading companies are looking to expand their production capacity and launch new product offerings in a bid to cater to the growing demand for edible nuts. The rapidly growing middle class in emerging economies remains a key target audience for edible nuts manufacturers.

FMI maintains a positive long-term outlook on the global edible nuts market, estimating global revenues to surpass US$ 100 Bn by 2025. Volume-wise, the global edible nuts market is anticipated to increase at 3.1% CAGR through 2025.

2016 U.S. PEANUT ACREAGE UPDATE 

The Farm Service Agency of USDA has released the 2016 of peanuts as reported by farmers with adjustments.  This should be the final acreage by state.

STATE

2016 NASSacres(11-10-16)

2016 FSA

acres(Sept)

2016 FSA

acres(Nov)

2015  FSA   acres(Nov)

Alabama

173,000

173,632

172,640

193,946

Arkansas

23,035

23,089

16,311

Florida

146,000

151,567

152,218

181,258

Georgia

710,000

710,669

714,168

774,138

Louisiana

 

525

525

1,058

Mississippi

39,000

37,271

37,279

41,450

Missouri

 

4,003

4,000

1,423

Nebraska

 

69

69

68

N. Mexico

 

7,979

7,976

4,902

N. Carolina

101,000

100,310

100,355

88,989

Oklahoma

12,000

11,214

11,366

7,250

S. Carolina

106,000

108,075

108,074

109,917

Tennessee

 

177

177

Texas

250,000

300,706

300,853

162,793

Virginia

20,000

20,131

20,179

18,096

Other

30,000

Total

1,587,000

1,650,365

1,652,970

1,601,718

 

USDA National Agricultural Statistics Service estimates the acreage in 2015 increased 2 percent to 1,587,000 acres.  The Farm Service Agency has reports from local FSA offices indicating that peanut acreage increased by 3.1 percent, up to 1,652,970 acres.  

Other states are growing peanuts, although the peanuts are a long distance from the shelling plants.  The new players include Arkansas, Louisiana, Missouri, Nebraska and Tennessee.  Also reported was Indiana (2 acres) and Minnesota (1 acre). 

The largest increase in peanut acreage was Texas, up 46 percent.  Arkansas was also up 41.5 acres indicating interest in growing peanuts.  Officials indicate that the acreage in Texas was generic cotton acres, planted in peanuts and may not be harvested. NASS continues to list the 9 major producing states and list smaller acreages as others.  The difference in reported acreage of 1,652,970 acres and NASS estimate is about 65,970 acres.  With a two-ton average, that’s a significant difference of 131,000 tons. The yield estimate from NASS is 3,934 pounds per acre.  That means 1,652,970 acres should produce a crop of 3,251,392 tons.   If NASS acres (1,587,000) is applied to the 3,934 pounds per acre, that’s a crop of 3,121,629 tons.  As of November 19, FSIS has graded 2,520,063 tons, 80.1 percent of the NASS estimate (77.5% of the FSA reported acres).

CHINA MARKET COULD HAPPEN AGAIN

Peanut production in China was expected to grow to 17 million metric tons (MMT) given the comparatively stable profits for peanut production plus the government lowered support for corn planting.  In July, reports raised the predicted production to 17.7 MMT, up 7.7% over the previous year.  As the government lowered potential profits for corn and cotton, farmers switched more land to peanuts.  Acreage was expected to increase to 4.61 million hectares, up 16.1 percent.  Good weather has yields up 10% from the previous year.

China imported 540,000 tons in 15/16, up from 161,000 tons the previous year.  The surge was said to be primarily due to price advantage for both imported in-shell and shelled peanuts. Even with the higher domestic peanut production, the 16/17 forecast shows 500,000 tons of imports.  The level of imports remains heavily dependent on the gap between domestic and international peanut prices.  If the price gap becomes small than the “duty + VAT” value, imports could fall significantly.  U.S. imports soared to 290,000 tons, up from 21,000 tonsExports from the U.S. to China look bright due to China’s growing demand coupled with limited potential in China significantly expanding acreage, yield and production. 

 

via Peanut Farm Market News, a peanut hotline service of The Spearman Agency, Tyron Spearman, editor