\nAs of mid-September there were 3.8 million tons of approved warehouse capacity in the U.S. with 1.9 million tons in GA.\u00a0 At first look, this has the potential to create a shortage of warehouse space of about 118 thousand tons in the U.S. and about 12 thousand tons in GA.\u00a0 However, expectations are that a worst case scenario would be a logistical issue and not a question of where to store these peanuts.\u00a0 Coming into this harvest, warehouses have been basically empty and shellers are prepared to start moving the current crop through the system.\u00a0 Combine that with a longer than typical planting season and the industry should have little problem in finding space for these peanuts.<\/li>\n
\nThis becomes a question of supply and demand.\u00a0 Basic economics tells us that as the supply increases prices will be driven down.\u00a0 There is little anyone can do to prevent the supply situation at this point, so one must look towards demand.\u00a0 The industry needs to continue to look for opportunities to expand demand in order to maintain or increase prices.\u00a0 We have seen domestic use of peanuts for food increase in recent years but there are few opportunities to impact consumer demand in a short period of time.\u00a0 The greatest opportunity for finding a market for this crop is through increased exports.\u00a0 Through August, total U.S. exports have been down compared to last year, and this is likely due to prices that increased late last year.\u00a0 While it is likely that exports will pick up, there is little indication that it will be without a drop in price.\u00a0 Right now the market is waiting to see how large this crop will be and that will determine how low the price will go to move this crop.\u00a0 Even with exports forecast to increase from last year, the ending stock created by this crop is expected to reach the heights of 2012.\u00a0 The industry needs to find a home for these peanuts as prices will be impacted until this surplus can be moved.<\/li>\n<\/ul>\n
So the big question of course is whether the crop will meet these yield expectations.\u00a0 We really won’t know until the harvest is complete but we can look at some of the historical USDA projections to get an idea of how accurate they have been in forecasting yields.![\"\"](\"https:\/\/site.extension.uga.edu\/aaecext\/files\/2017\/10\/Peanut-data-1-300x218.png\")
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As can be seen in the figure above, the blue line represents the actual yield in GA and the orange line represents the October forecast yield released by the USDA.\u00a0 This graph starts in 2006 which was when Georgia-06g was released.\u00a0 This variety currently represents about 80 percent of the peanuts planted in GA.\u00a0 We can see that every year, except the last two years, the USDA October forecast was less than the actual final yields.\u00a0 Generally this would project a very favorable expectation on the USDA forecast model as typically underestimating yields.\u00a0 There is further evidence of underestimating in 2012 when there was a big spike in yield such as is expected this year.\u00a0 The two most recent years when the USDA overestimated yields were during a period of a downward trend from the peak.\u00a0 It will be interesting to see what the final yield number is for 2017 and how that compares to the current forecast of 4,700 pounds per acre.\u00a0 This is certainly a big spike in yield from our actual 2016 yield of 3,900 pounds per acre, but with no major crop and weather issues this year it might just be achievable.<\/p>\n","protected":false},"excerpt":{"rendered":"
by Adam N. Rabinowitz The 2017 peanut harvest is well underway with over 70 percent of the Georgia crop dug and over 50 percent harvested.\u00a0 While Hurricane Irma negatively impacted the cotton crop, there was no widespread negative impact on peanuts.\u00a0 Both irrigated and dryland peanuts are looking good. Peanut yields in Georgia and the […]<\/p>\n","protected":false},"author":217,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,8,9],"tags":[],"class_list":["post-154","post","type-post","status-publish","format-standard","hentry","category-marketing","category-peanuts","category-row-crops"],"_links":{"self":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts\/154","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/users\/217"}],"replies":[{"embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/comments?post=154"}],"version-history":[{"count":5,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts\/154\/revisions"}],"predecessor-version":[{"id":161,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/posts\/154\/revisions\/161"}],"wp:attachment":[{"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/media?parent=154"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/categories?post=154"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/site.extension.uga.edu\/aaecext\/wp-json\/wp\/v2\/tags?post=154"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}