Peanut Market News – November 14, 2016

U.S. PEANUT EXPORTS – TOP 10 – From USDA/Foreign Agricultural Service(American Peanut Council)

January – September -2016 (Total peanut kernels, in-shell, Peanut Butter and Processed) (Quantity in Metric Tons – MT)

Country

2014

2015

2016

% Mkt Share(2016)

2016 vs 2015

2016 Value

WORLD

330,747

320,757

527,761

100%

+64.54%

$655,878,771

China

11,735

9,886

170,361

32.28%

+1,623%

$147,295,665

Canada

78,062

79,349

88,146

16.70%

+11.09%

$132,764,162

Mexico

54,408

67,049

76,598

14.51%

+14.24%

$93,884,875

Vietnam

44

22,326

61,174

11.59%

+174%

$62,281,323

Netherlands

61,070

38,546

27,414

5.19%

-28.88%

$33,658,197

United Kingd

16,448

12,074

15,363

2.91%

+ 27.23%

$21,167,762

Germany

22,286

13,610

15,307

2.90%

+12.47%

$22,974,838

Japan

9,041

9,425

12,169

2.31%

+29.11%

$19,891,934

Spain

7,659

10,595

7,450

1.41%

-29.68%

$10,565,733

Norway

2,998

2,657

3,148

.60%

+18.47

$4,422,246

 

U.S. PEANUT EXPORTS

Although volume has slowed, China and Vietnam continue to buy American peanuts when available.  Through September the two countries have purchased 49 percent of the U.S. peanut exports (Jan-Sept).  Canada has moved back to the # 2 spot buying 16.7% of the exports including peanut butter, processed, raw kernels and inshell with Mexico capturing 3rd.    U.S. peanut exports to the Netherlands is down 28.8%, only a 5.2% market share, indicating that shellers are having trouble shelling EU specs which is required to ship into the EU (4 ppb aflatoxin).         

 

2016 PEANUT CROP

Production is forecast at 6.24 billion pounds (3,121,600 tons), down 1 percent from October but up 4 percent from the 2015 total of 6.00 billion pounds. If realized, production for the Nation will be the second highest on record. Harvested area is expected to total 1.59 million acres, unchanged from the October forecast but up 2 percent from 2015. Based on conditions as of November 1, the average yield for the United States is forecast at 3,934 pounds per acre, down 42 pounds per acre from the October forecast but up 89 pounds per acre from the 2015 average yield. The 2016 average yield will be the third highest on record for the United States, if realized. A record high yield is forecast in Alabama for 2016. If realized, production in Georgia, the largest peanut-producing State, will be the third highest on record.

As of October 30, seventy-seven percent of the 2016 peanut crop had been harvested, 9 percentage points ahead of last year and 3 percentage points ahead of the five-year average.

 

SIGN-UP STARTS FOR ARC or PLC

USDA FSA Administrator Val Dolcini has announced that producers on farms with base acres under the safety net programs established by the 2014 Farm Bill, known as the Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) programs, can begin visiting FSA county offices starting Nov. 1, 2016, to sign contracts and enroll for the 2017 crop year. The enrollment period will continue until Aug. 1, 2017.

“FSA issued more than $7 billion in payments in October 2016 under the ARC-County and PLC programs for the 2015 crop to assist enrolled producers who suffered a loss of price or revenue or both,” said Dolcini. “Since shares and ownership of a farm can change year-to-year, producers on the farm must enroll by signing a contract each program year. I encourage you to contact your local FSA office today to schedule an appointment to enroll.”

If a farm is not enrolled during the 2017 enrollment period, the producers on that farm will not be eligible for financial assistance from the ARC or PLC programs for the 2017 crop should crop prices or farm revenues fall below the historical price or revenue benchmarks established by the program. Producers who made their elections in 2015 must still enroll during the 2017 enrollment period.

The ARC and PLC programs were authorized by the 2014 Farm Bill and offer a safety net to agricultural producers when there is a substantial drop in prices or revenues for covered commodities. Covered commodities include barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (which includes short grain and sweet rice), safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer a covered commodity. For more details regarding these programs, go to www.fsa.usda.gov/arc-plc.

 

LOVATT & THE PEANUT MARKET

George Lovatt, peanut broker of Atlanta, told the SOUTHEAST FARM PRESS over his four-decade career as a peanut broker, he has learned to read peanut market reports with a dose of skepticism. Not that the data is unhelpful. “It’s the best we got,” he says, but you have to drill down into the data sometimes to find solid ground.”

“The official USDA carryout from the 2015 crop is 895,000 tons. And while I have some disagreement on how they calculate that, I think that is reasonably close to being accurate. It means we have a comfortable carry-out,” Lovatt said. He pointed out that the June Peanut Stocks and Processing Report, published in July, had the peanut supply grossly overstated. The July report, published in August, adjusted the reported carry-out by 842,000 tons. Where those tons went, he said, really can’t be accounted for. “But they are gone,” said Lovatt, who put those mystery tons down in his figuring as “disappearance not tabulated.”

USDA has the 2016 peanut crop production at 3.2 million tons (recently to 3,155,000 tons). As harvest proceeds across the U.S. peanut belt, the effects of adverse weather and pests in primary growing regions is becoming clearer. The USDA total production is likely too high. Lovatt’s adjusted number shows total U.S. production closer to 3,050,000 tons in 2016. The U.S. farm economy is going through rough times, rougher than those not close to the farm-gate understand. Commodity prices are low and sluggish. The critical concerns for peanut farmers and other agronomic-crop farmers going into next year will be financing and cash flow. With that in mind, he said:

“When you start looking at the 2017 crop, farmers are going to have to take a hard look at the average market price paid for the 2016 crop and try to make a projection on what the PLC payment may look like in October of ’17 (which is when payments are issued), and use the calculation and measure that against the options are available to them for cotton, corn and soybeans. I suspect we are going to see a slight decrease in peanut acres next year but everything is dependent on what these competitive crops can offer.”

 

SAFETY NET PEANUT PLC PAYMENTS BEING MADE

Peanut farms with peanut base have begun receiving payments caused by low peanut prices for the 2015 peanut crop.  USDA declared the average price to be $386 per ton or ($0.193 lb).  The Farm Bill provides that the reference price for peanuts if $535 per ton ($0.2675 lb).  To obtain the PLC payment amount deduct the average price from the reference payment yielding the PLC Payment or $149 per ton.  The payment is reduced by 6.8% sequestration.  Payments are limited to $125,000 per eligible producer.  Payment limitation includes benefits received from peanut market loan gains, loan deficiency payments and ARC/PLC payments for peanuts.  Another tremendous asset for peanut producers is that there is a separate payment limit (no other crops included).  Here is a summary of the payments from USDA – all influenced by low commodity prices this past year.

 

2015 PAYMENTS IN MAJOR PEANUT STATES

Issued by USDA’s Farm Service Agency.

 

Peanut PLC payments for 2015 totaled $489,527,571 and ARC-CO payments were $336,202 for a total of $489,863,773(7.2%).  Corn payments totaled $3,913,091,315 (57%), wheat payments were 1,048,041,215 (15%) and soybeans were $1,048,042,215 (15%)  The total generic acres planted as peanuts were 896,757 acres.

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