Although there are still too many peanuts overhanging the market from bumper U.S. crops in 2012 and 2013, U.S. producers may increase acreage this year because alternate crops don’t hold much promise for better returns.

“This is going to be a year in which growers have to make the right decisions about what to plant — and that’s going to be very difficult to do,” says Marshall Lamb, who’s research leader at the USDA/ARS National Peanut Research Laboratory at Dawson, Ga.

“If we have more peanut acres this year and another  high average yield, we’ll have another large carryout going from 2014 into 2015, there will be another oversupply, and prices will be low again in in 2015,” he said at the annual meeting of the Mississippi Peanut Growers Association at Hattiesburg.

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A look at estimated breakeven prices for key southern crops shows the dilemma facing growers.

“For 4,600 pound irrigated peanuts, breakeven [based on Georgia budgets] is $440 per ton; for 200 bushel irrigated corn, breakeven is $4.50 per bushel; for 1,150-pound irrigated cotton, breakeven is 80 cents per pound; and for 57 bushel irrigated soybeans, breakeven is $11.57 per bushel.”

Thus, irrigated corn would equate to $400 per ton peanuts; 80-cent cotton would equate to $453 per ton peanuts; soybeans at $12.41 per bushel would equate to $426 per ton peanuts; and double-cropped wheat/soybeans would equate to $465 peanuts.

“Although I’m not aware of any peanut contracts being offered today, I heard of some earlier at 22 cents per pound, or $440 per ton,” Lamb says. “So, that would make peanuts competitive for acres with corn, cotton, and soybeans.”

While no one can predict the vagaries of growing season weather, or conditions in competing countries, he says the potential is for growers in the U.S. Midwest to do what they do every year — plant a lot of corn and soybeans.

“And it’s what Midwest growers do that has the greatest influence on corn and soybean prices — not what we do here in the Southeast. With their potential to produce a lot of corn for a market that’s already in surplus, as well as a lot of soybeans, the outlook is not bright for significant price appreciation in either of those crops.”

Which means southern farmers, who’ve been riding the corn/soybean boom in recent years and who have the option of growing peanuts, may elect to plant more of that crop this year.