WEDNESDAY, MARCH 20,2013

www.southeastfarmpress.com

COMMENTARY

SOUTHEAST

Don't count peanuts out

for 2013 planting season

f you had asked me around Christmas time how many

peanuts Southeast growers would plant this April and
May, I would have said maybe half a crop.
At the time we had more than a six-month supply going
into the 2013 season.
Ask me now,, and I'm not so sure.
We still have too many peanuts. Thanks to foreign buyers, primarily China, the inventory is moving fast, nearly 50
percent more exports this winter than last winter.
Compared to corn, soybeans and wheat, peanuts are a
small acreage crop. As such, when a buyer, like China, buys
a large quantity in a short period of time, it can make a big
dent in supply, and subsequently demand, and price; and it
can amp these up in a big hurry.
One point of evidence is the Chinese purchase of pecans, an even smaller market than peanuts, but the impact
on supply and demand could be similar for the two crops.
Everyone, without exception, I've talked to about peanuts over the past few weeks is urging growers to wait as
long as they can to make decisions on how many acres of
peanuts to plant. The big trump card in the waiting game
is China and for growers who thought recent purchases by
the Chinese was a one-time thing, think again.
One veteran peanut buyer says, "The Chinese keep
coming back and coming back they really like the price,
quality and reliability of delivery of our peanuts. Now, we
are faced with some interesting choices from growers all
the way up to end-users."
With shellers running full tut, full time, the availability of
shelled peanuts has become uncomfortably tight for some

domestic buyers. One of those

interesting choices has to do with
China buying large quantities of
farmer stock peanuts.
"Unless we start to see farmer
stock being exported directly to
Roy Roberson
China, the sheller's will likely offer farmers stock pricing based
on where the market is now (March) and that probably will
not be enough to make the farmers plant a lot of peanuts,"
says veteran Stewart Parnell, former owner of Peanut Corporation of America, which was at the center of salmonella
issues back in 2008 and 2009 and still faces charges based
on that debacle.
Legal problems aside, Parnell remains an astute buyer of
U.S. grown peanuts. He says, one thing that could change
the price of peanut contracts is that he is getting inquiries
on farmer stock from China now, but just don't know how
best to manage or even work with that as it would cause a
huge uproar by the shellers.
"I just don't think I would want to be a part ofthat," Parnell says.
How much pressure Chinese buyers will put on domestic buyers to offer higher grower contracts remains to be
seen. As planting time moves closer and closer the window
of opportunity for peanut growers in the Southeast gets
smaller and smaller.
If growers could count on another perfect growing season, like 2012, the decision to plant more peanuts would

ft

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Searching for the meaning in gas prices:

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Business
Southeast Fami Press, Voiume 40 issue 9 (USPS 995-140; ISSN 0194-0937) is published the
first, second and third Wednesdays January through April, and thefirstand third Wednesdays

atching the dollars wheel spin feverishly past on the

gas pump these days is somewhat equivalent to the
cogs whirling in one's head, trying to fathom why prices
have skyrocketed in the past month, reaching historic highs
for this time of year.
In my town, prices are up more than 50 cents per gallon,
with almost daily increases. Some areas of the country are
already seeing $4.50-4.75 ... and the busy summer driving
season is still three months away.
Determining where the fault lies in escalating gas prices
is much like a hamster on a revolving wheel one gets
nowhere fast.
The blamers are many, their villain of choice diverse: It
is (pick one or all) Obama's fault, or the monopolistic oil
companies. Congress, OPEC, China, refiners, environmentalists, the EPA, the lack of new refineries, the closing
of refineries. Hurricane Sandy, Winter Storm Nemo, not
enough new energy, too much new energy, exporting of
U.S. energy, speculators, and on and on.
Ironies abound: The media talking heads were yammering
of late that U.S.-produced ou and gas supplies are at an aU-time
high. This on the heels of reports that ou, gas, and refined petroleum products are now the leading U.S. export.
Raising, of course, the inevitable question: If the U.S.
is producing so much more oil and gas, why aren't prices
stabilizing or going down? The analysts say, well dummo,
the oil market is just one giant barrel that everybody's oil is
poured into, and price of the oil in that metaphoric barrel
is a function ofthe world market, blah, blah and oh, just
incidentally, because the companies can get more selling it
to China and Europe and elsewhere than they can get here.

Then there's the refinery

paradox, spawning articles and
analyses that would stretch the
length of the in-limbo Keystone
pipeline. Critics point out that
no new refineries have been built
in the U.S. in 30 years because of Hembree Brandon
environmental opposition and
overly stringent EPA regulations, that besides, the oil companies have shut down almost half the refineries in the U.S.,
that refinery profits have been ballooning in recent years,
and the companies use refinery capacity as an excuse to
manipulate prices at will.
Not so fast, says the other side: Indeed, no new refineries
were built for over three decades and a lot of old, inefficient
facilities were in fact shut down, but at the same time capacity at existing facilities has been continually expanded.
Further, they say, it wasn't the EPA or environmentalists
that thwarted the building of new refineries, but the huge
investment required and the low profits in refining.
Others say it's all the fault of speculators, who care not
a whit about pump prices, as long as they can make a buck
trading futures. Ah, the traders say, but that's just the market at work a price-setting mechanism, don'tcha know.
As for the president and Congress, well, they have about
as little influence over pump prices as you or I. They can
bluster and bloviate, and even take some oil from the nation's strategic reserve, but any effect is minuscule and very
temporary.
You get the picture: He said, she said, and nobody's any
nearer to a revelation.

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