Peanut Market News- April 10, 2017

NEWS AROUND THE BELT

Mars Chocolate North America is upping its investments in U.S. manufacturing and creating about 250 new jobs in the process, President Tracey Massey told CNBC this week. The company plans to reinvest $70 million in existing factories across the country. The move ensures that more than 95 percent of Mars’ chocolate products for the U.S. are made here.  Specifically, Mars will be producing more of its core M&M products, which are seeing “really good growth,” and will focus on creating more varieties and flavors for its new Goodness Knows product – that’s made in Albany, GA.  That means more High Oleic peanuts will be needed in the future.

 

FROM THE WESTERN PEANUT GROWERS MEETING 

With his background as an certified public accountant, U.S. House Ag Chairman Mike Conaway (R-Midland) admitted to a large crowd of onlookers Friday he was adamant in ensuring there were no delays in the path to passage of the next Farm Bill, being targeted for 2018. Conaway said that lawmakers have to decide whether or not to include Supple­mental Nutrition Assistance Program (SNAP) in the 2018 legislation, or develop separate legislation, that remains up in the air.

Conaway said ‘a goal of his and others associ­ated with crafting the 2018 federal legislation was the reintroduction of cotton under the Title I commodi­ties. In the 2014 Farm Bill, cotton was eliminated from the program, and cutting off the path of resources and assistance for cotton produc­ers. Additionally, under the 2014 Farm Bill, several significant changes were adopted, which included income assistance only provided in cases of significant yield losses in an area or deep price-based losses, of which cotton was eliminated and dairy was reorganized to a margin protection program, and livestock producers were given additional protections.  Conaway also stated international trade would be a key factor in the development of the 2018 Farm Bill,

Beginning in 1933, farm bills have included titles on commodity programs, trade, rural development, farm credit, conservation, agricul­tural research, food and nutrition programs, and marketing, to name a few. The farm bill has grown consider­ably since then. Though it once comprised solely farm aid, other programs such as the food stamp program became part of the bill in the 1970s. Since then, food stamp spending in particular has grown: it now comprises nearly four-fifths of the bill’s total spending.

 

CONVINCING CONGRESS TO CONTINUE PEANUT PROGRAM 

Tim McMillan, farmer from Enigma, Georgia, testified Tuesday in support of maintaining the peanut provisions of the 2014 Farm Bill and the Price Loss Coverage (PLC) program in the next farm bill.

 In his testimony, McMillan says, “If the PLC program had not been in place, I am afraid many farms in the Southeast would no longer exist because of the downturn in the farm economy which has plagued us the past three years.” McMillan testified on behalf of the Southern Peanut Farmers Federation at the hearing titled, “The Next Farm Bill: Commodity Policy Part II” before the U.S. House Committee on Agriculture Subcommittee on General Farm Commodities and Risk Management.  

The Southern Peanut Farmers Federation’s member organizations produce approximately 80 percent of the U.S. peanut crop. The Federation members include Alabama Peanut Producers Association, Florida Peanut Producers Association, Georgia Peanut Commission and Mississippi Peanut Growers Association.

The Federation supports maintaining the current PLC program in the 2014 Farm Bill including the current reference price for peanuts, a separate peanut payment limit and storage and handling provisions.  According to McMillan’s testimony, the 2014 Farm Bill was drafted during a period of high prices on the farm. “When we compare average prices in 2011-12 to 2016 prices, we see a 30 percent decline in peanut prices,” he says. “I see the real impact of these numbers in the faces of my neighbors and hear it in discussions with lenders and our suppliers.”

The U.S. Department of Agriculture projected 2017 net farm income in the U.S. to be $62.3 billion which translates to a 49.6 percent decline in net farm income since 2013.  

The PLC program has worked for peanuts, McMillan adds, but peanuts are not sufficient to carry an entire farming operation. “In a time when corn and cotton prices have been depressed and with the lack of a cotton PLC program, more pressure has been placed on farmers to plant peanuts by lenders,” McMillan says. 

Currently, demand of peanuts has kept pace with the supply of peanuts. U.S. per capita peanut consumption increased 12 percent from 2012 to 2016. The peanut industry has also witnessed strong growth in the export market growing by 71 percent between the 2008 and 2014 Farm Bill.

No word on when the next Farm Bill hearing involving peanuts will be held.  Filing comments open for10 days.

 

 

2017 CONTRACTS

SE- $450 per ton but plus $25 per ton for seed production, $50 per ton premium for High Oleic production.  Some contract sign-up is l/2 last year’s production at $450 per ton, plus $25 per ton for seed production.  Some $450 per ton reduced to $425 per ton for freight differential, hauling from long distance production areas to shelling plant.  Some shellers off the market.

VC- $500 per ton for regular Virginias (Bailey and Sullivans, etc).   $475 per ton being offered for HO Runners and $450 per ton for non HO runners, GA 06G with no restrictions.  Seed production premium is usually $25 per ton. Some limits.

SW- contract prices presently; $ 500 HO runner, $ 525 HO commercial Spanish,  $ 550 HO Virginia.

FLEX-  $ 400 ton base price = 0.52.  For each 0.01 increase in price above 0.52, add $ 13.50 ton up to a maximumof 0.61. Present price is 0.60, which equals $0.06 increase, or a price of $508 per ton. Maximum price achievable at 0.61 is $ 521.50.

 

                     PEANUT PRICES

NATIONAL

Week- April 4, 2017

SHELLED MKT

Date – April 4, 2017

MARKET LOAN

Date – April – 2016 (tons)

WEEKLY

Date – Mar.25 2017

$424.43 per ton/Runners

Shelled Runners/SE

 

2015 Crop

2016 Crop

Runners – $.193 – $386 t

$409.00 per ton/Spanish

$.61 Jum R. $.61 Med R.

Date

Apr 4, 2016

Apr 4, 2017

Spanish –$.213 – $426 t

$429.97 per ton/Valencia

Splits – $.61 ish  too

Loans

2,075,021

2,270,000

Virginias -$.207 – $414 t

$429.97 per ton/Virginia

Markets quiet.

Redeemed

743,219

1,146,577

Average – $.195 – $390 t

Same as last week

4-4-16 Med- $.44, Jum-.45

In Loan

1,331,802

1,123,423

Runners- 52,895,000 #

4-6-15 $.45 Med/Jum$.46

Estimate

3,106,895 t

2,842,305 t

Spanish – 3,200,000 #

 I = Inspected (3-23-2017)

Inspected –

3,005,902 t

2,776,545 t

Virginias – 3,596,000 #

 

U.S. 16 CROP INSPECTIONS

 3/23/2017 – 2,776,545 tons

 

           UP 0.2 ct/lb

Prices Received by farmers/ PLC

Aug. 2016

$0.190

$380 t.

Sept 2016    $0.191     $382 t.

Oct 2016     $.191       $382 t

Nov 2016     $.186      $372 t

Dec 2016     $.185      $370 t

Jan 2017     $.195      $390 t

Feb2017  $.198 $396 t

2015-16 -$.193 – $386  

Total – 59,655,000 #

 

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