Peanut Market News – February 21, 2017

 NATIONAL AGRICULTURAL POLICY UPDATE

             As the 115th Congress and the Trump Administration gets down to business, agriculture policy is front and center.    U.S. Senate Agriculture Committee Chairman Pat Roberts (R-KS) has scheduled the first field hearing for the new farm bill at Kansas State University.  U.S. House Agriculture Committee Chairman Mike Conaway begins the process with a Capitol Hill hearing on the Rural Economy.  

            The peanut industry is excited that former Georgia Governor Sonny Perdue has been nominated by President Trump to be Secretary of Agriculture. Governor Perdue’s confirmation hearing is expected to occur in late February or March.

            The House Ag Committee brings back an experienced team of leaders including Chairman Conaway and Ranking Member Collin Peterson (D-MN). Important for peanut interests are a number of peanut state members of the Committee. Congressman Austin Scott (R-GA) is a Subcommittee Chairman.   Congressmen Mike Rogers (R-AL), Rick Allen (R-GA), Trent Kelly (R-MS) are all Committee veterans.   Congressman David Scott (D-GA) is a senior democrat on the Committee.   Florida growers should note that in addition to Congressman Ted Yoho (R-FL), the Committee has added three additional Florida members, Congressmen Neal Dunn (R-FL), Al Lawson (D-FL) and Darren Soto (D-FL).  Arkansas Congressman Rick Crawford (R-AR) chairs the Commodity Subcommittee and has the majority of peanuts in Arkansas in his district.

            Congressman Sanford Bishop (D-GA) has accepted the Ranking Member position on the House Agricultural Appropriations Subcommittee.  Congressman Robert Aderholt (R-AL) is the Chairman of the Subcommittee.

            On the Senate side, Senators David Perdue (R-GA), Thad Cochran (R-MS), John Boozman (R-AR) are peanut state members serving on the Agriculture Committee.  Alabama Attorney General Luther Strange has been appointed to fill the senate term for new U.S. Attorney General Jeff Sessions.   Senator Sessions served the first part of the 115th Congress as a member of the Senate Agriculture Committee.  Senator Strange will now serve on the Committee.

 

2017 CONTRACTS

SE $475 per ton dropped to $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.

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

2016 FLEX:  $ 400 ton base price = 0.52.  For each 0.01 increase in price above 0.52, add $ 13.50 ton up to a maximum of 0.61. Present price is 0.58, which equals 0.06 increase, or a price of $481 per ton. Maximum price achievable at 0.61 is $ 521.50.

2016 MIN – MAX:  $400 base.  Farmers sell peanuts based on sheller web price before end of March, up to MAX $500 per ton. ($475) This includes peanuts not contracted remaining in the loan

 

MARSHALL TALKS PEANUT MARKETS

Dr. Marshall Lamb, research leader of the National Peanut Lab, told Alabama/Florida farmers that for 2017, “We are in a good position.”  He reasoned that peanut and cotton prices have strengthened, and U.S. peanut markets are back in a balanced position.  There is more good news, “U.S. peanut demand is up, consumption strong and world peanut demand is up.”  Marshall cautioned that U.S. and world peanut markets change extremely fast and producers must start utilizing the marketing loan program more effectively.  He said, “The MLP (Market Loan Program) allows a producer to take peanuts across crop years for marketing purposes by considering marketing early, at harvest and post harvest by utilizing the loan.

              Marshall also noted the per capita consumption of peanuts continues to rise from 6.7# per person in 2012 to 7.4# per person in 2016…add oil stocks and the per capita usage is 8.6# per person.  He said he is concerned about the downward trend of yield in Georgia, Florida and Alabama from 2012 to 2016.

 

SMUCKERS TO BUILD IN COLORADO 

In January, the J. M. Smucker Company announced plans to build a 200,000 sq. ft. facility in Longmont, Colorado to churn outSmucker’s Uncrustables sandwiches and eventually employ 500 people. 

To seal the deal, Longmont City Council is offering the Ohio based company, $6.5 million in rebates on taxes and permit fees.  The deal also required Smuckers to pay its employees an average salary of $48,977 annually.  The incentive package is up for second reading and a vote on Feb. 21.  The city offer is on top of a $2.4 million personal property tax offered by Weld County.  The factory site is partly in the Longmont city limits and party on Weld County land.

 The plant is a $340 million investment by Smuckers with construction to begin this spring and production beginning in 2019.  The new plant will supplement an existing facility in Scottsville, Kentucky that producers up to 2 million Uncrustables a DAY!  Uncrustables are frozen disc-shaped sandwiches that consumer thaw and eat. Annual sales have grown from $10 million in 2000 to $200 million in fiscal 2016.  Company reports 17 consecutive quarters of double digit U.S. retail sales growth in Uncrustables.

 

U.S. PEANUT EXPORTS

U.S. peanut exports are booming!  December posted a 44.4% increase over last December and the 5-month exports are up 12.6%.  Raw-shelled peanuts are up 19.2% as the Netherlands increases 49% over last year.  In-shell is up 7.4% for the year, but look at China and Vietnam, they are back strong, up 44.7% and 78% respectfully. Peanut butter is down 13.7%, but overall, U.S. peanut exports are likely to reach the USDA prediction of 750,000 FS tons in 2016-17.

 

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