If peanut farmers produce as many peanuts in 2016 as they did in 2015, there will not be enough room in federally licensed warehouses to store the crop, according to a white paper released recently by the National Center for Peanut Competitiveness (NCPC).
Southwest Farm Press reports the concern over warehouse capacity began brewing last year when the peanut industry realized just how large the surplus of peanuts might be going into the 2016 peanut season.
“Given that cotton does not have a commodity program and only relied on crop insurance for its safety net, the recent and forecasted extremely low cotton prices, coupled with the other commodities’ low prices, have forced Southern farmers to look towards peanuts as the safety net for their farming operation,” the NCPC paper says.
According to the NCPC, Georgia has more than 200,000 tons of farm stock peanuts above the previous year. Georgia had a record 2015 peanut crop of 1.74 million tons due to a 24 percent increase of acres harvested and a high yield per acre of 4,470 pounds.
“The supply situation, coupled with expected low prices for alternative competitive crops, have become a concern for the peanut industry as it relates to needed storage capacity,” the NCPC paper says.
USDA’s Economic Research Service forecasted national peanut stocks to be 1.44 million tons by Aug. 1. The level of stocks would be a historical high. The NCPC paper says a storage capacity deficit of 627,000 tons is estimated if Southeast U.S. peanut farmers produce equal crops as they did in 2015.