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US peanut prices plunge on imminent increase of availability from this year's harvest

October 23, 2020

1 mins read

The USDA has cut its 2020/21 US peanut production forecast from September’s 6.793 billion pounds to October’s 6.695 billion pounds (3.04 million tonnes), slashing the estimate by almost 100 million pounds, following recent crop losses from Hurricane Sally and Tropical Storm Beta, which hit parts of South and Southeast US in September.

The Hurricane Sally, stronger of the two storms, landed at western Florida, hitting the coastal areas along the Florida and Alabama border particularly hard and causing significant damages to field crops including peanuts, cotton and soyabeans. Losses in peanut yields are likely to be less severe than for some other crops, according to the University of Florida, however the storm has delayed harvesting and caused logistical issues.

Despite the downward revision, the 2020/21 US peanut output is projected to increase by 22% from the poor-yielding 2019/20 season, following a large expansion of production area. Farmers are anticipated to harvest peanuts from 1.62 million acres, up 17% y-o-y. The average yield has been revised down 60 pounds per acre from the previous month but up 191 pounds per acre from the 2019 harvest (+5% y-o-y).

In the week ending 18th October, 55% of the peanut crop was rated in good condition in comparison to 46% the previous year, and 12% were rated as excellent, against 8% last year, according to the USDA. Overall, the peanut industry maintains their view of a good quality US harvest this year, despite the latest weather setbacks.

Following from the imminent increase in supply availability, the Mintec Benchmark Price of US peanuts, un-blanched 40/50 per ounce, delivered CIF Rotterdam, fell 18% in the four week period to 14th October, to USD 1,555/tonne.

Jara Zicha
Jara Zicha

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