It's hard to keep a peanut farmer from planting peanuts, at least for two years in a row anyway. The USDA pegs the U.S. peanut acreage to be 1.526 million acres this year, more than 100,000 acres than what was figured back with March's planting intentions report.
Last year Georgia, which produces half the country's peanuts each year, planted the fewest peanut acres in more than three decades. Due largely to high cotton prices and low peanut contract prices offered for the 2011 crop, Georgia growers last year decided they didn't have to drop peanut seed in the ground out of old habit if the price wasn't right. It shocked the system a bit. Peanut supplies got tight and harvest-time prices reached well over $1,000 per ton, the highest in recent memory.
But this year, according to USDA, Georgia growers planted 710,000 acres, or 50% more than last year.
"I expected the acreage number to increase more with Georgia being main driver but I was a little surprised a 1.525 million acres," said Nathan Smith, peanut economist with the University of Georgia Cooperative Extension.
Other peanut states, except for North Carolina, planted fewer acres than USDA's March estimate.
Overall, acreage is up 34% from last year. And this year's crop, unlike last year's, looks pretty good across the board, with USDA figuring near three-fourths of the crop in good to excellent conditions as of late July. And the crop is on pace to be harvested earlier, too, at least by a few weeks.
Using USDA's yield estimate of 3,380 average pounds per acre, and that at least 1.486 million acres will be harvested, Smith figures total production could now reach 2.5 million tons. If the average yield goes above the 3,380-pound mark, prices could push below $500 per ton, and just as easily see a 2.6 million ton crop.