Spend Matters welcomes this guest article by Liliana Gonzalez of Mintec.
Accounting for over two-thirds of the snack nuts consumed in the US, peanuts are definitely top dog! Rich in protein and cholesterol-free, they’re also relatively inexpensive when compared to other nutritionally similar products, such as meat and dairy. US demand for peanuts has continued to grow, with consumption growth increasing at an annual rate of 2% over the past 3 years. In the US, on average, each person eats about 6 pounds of peanuts every year, with over half of that in form of peanut butter.
There are 4 main peanut varieties, but the “Runner” variety makes up roughly 80% of the total US peanut crop. The Runner variety is mostly used for peanut butter manufacturing rather than confectionary and snacks. It takes approximately 540 peanuts to fill a small jar of peanut butter.
Although 2014 was a challenging year for the peanut, with delayed plantings and wet conditions in some of the main growing regions of the South East, production is forecast at 5.2m lbs, up 25% on the previous year and up 43% on the disastrous production year of 2011. The higher production is a result of higher yields and an increase in the planted area, up 27% year-over-year to 1.3m acres.
Peanut prices have been falling since the middle of 2012 when they reached a peak of $0.34 per lb, and have now reached a level not seen since 2010. In fact, prices have fallen 13% in just the past year, from $0.30 per lb in January 2014 to $0.21 per lb in March 2015.
Despite the low prices, it is forecast that peanut plantings in 2015 will increase to 1.5m acres, up 9% y-o-y; thanks to the low prices of competitive crops such as cotton and maize. With plenty of peanuts being carried over into 2015 and more on the way, prices are not expected to rise much in the next few months so it’s a good time to thickly butter those PB&J sandwiches!