Peanuts and Products
Peanuts are the edible seeds of a plant from the pea family. Although called a nut, the peanut is actually a legume. Ancient South American Inca Indians were the first to grind peanuts to make peanut butter. Peanuts originated in Brazil and were later brought to the U.S. via Africa. The first major use of peanuts was as feed for pigs. It wasn't until the Civil War that peanuts were used as human food when both Northern and Southern troops used the peanut as a food source during hard times. In 1903, Dr. George Washington Carver, a talented botanist who is considered the "father of commercial peanuts," introduced peanuts as a rotation crop in cotton-growing areas. Carver discovered over 300 uses for the peanut including shaving cream, leather dye, coffee, ink, cheese, and shampoo.
Peanuts come in many varieties, but there are four basic types grown in the U.S.: Runner, Spanish, Valencia, and Virginia. Over half of Runner peanuts are used to make peanut butter. Spanish peanuts are primarily used to make candies and peanut oil. Valencia peanuts are the sweetest of the four types. Virginia peanuts are mainly roasted and sold in and out of the shell.
Peanut oil is extracted from shelled and crushed peanuts through hydraulic pressing, expelled pressing, or solvent extraction. Crude peanut oil is used as a flavoring agent, salad oil, and cooking oil. Refined, bleached and deodorized peanut oil is used for cooking and in margarines and shortenings. The by-product called press cake is used for cattle feed along with the tops of the plants after the pods are removed. The dry shells can be burned as fuel.
Prices - The average monthly price received by farmers for peanuts (in the shell) in the first 5 months of the 2007-08 marketing year (i.e., Aug 2007-Jul 2008) rose +13.5% to 20.1 cents per pound. The record high is 34.7 cents posted in 1990-91. The average monthly price of peanut oil in the 2006-07 marketing year (through May 2007) rose +14.4% yr/yr to 50.89 cents per pound. The average monthly price of peanut meal (50% Southeast Mills) fell by -8.0% yr/yr in 2006-07 (through February 2007) to a record low of $98.40 per short ton.
Supply - World peanut production in 2006-07 fell by -4.6% yr/yr to 32.303 million metric tons, down from last year's record high of 33.865. The world's largest peanut producers are China with 45% of world production, India with 18%, U.S. with 5%, and Nigeria also with 5%. U.S. peanut production in the 2006-07 marketing year fell by -30.8% to 3.372 billion pounds, far below the record high of 4.927 billion pounds posted in 1991-92.
U.S. farmers harvested 1.213 million acres of peanuts in 2006-07, down -25.5% yr/yr. That was the lowest level since 1930. U.S. peanut yield in 2006-07 fell -7.0% yr/yr to 2,780 pounds per acre, farther down from the record high of 3,159 pounds seen in 2003-04. The largest peanut producing states in the U.S. are Georgia (with 45% of U.S. production in 2006), Texas (17%), Virginia (15%), Alabama (10%), Florida (9%), and North Carolina (9%). U.S. peanut oil production in 2006 rose +19.3% to 191.804 million pounds, but that was still only about half of the record high level of 358,195 million pounds posted in 1996.
Demand - U.S. disposition of peanuts in 2005-06 (latest data available) rose by +7.5% yr/yr to 4.332 billion pounds. Of that disposition, 60% of the peanuts went for food, 15% for crushing into peanut oil, 13% for seed, loss and residual, and 12% for exports. The most popular type of peanut grown in the U.S. is the Runner peanut with 86% of U.S. production in 2005-06. This was followed by the Virginia peanut with 13% of production and the Spanish peanut far behind with only 2% of production. Peanut butter is a primary use for Runner and Virginia peanuts. It accounts for 55% of Runner peanut usage and 53% of Virginia peanut usage. In a poor third place, only 5% of Spanish peanuts are used for peanut butter. Snack peanuts is also a key usage category and accounts for 40% of Spanish peanut usage, 35% of Virginia peanut usage, and 23% of Runner peanut usage. Candy accounts for 53% of Spanish peanut usage, 22% of Runner peanut usage, and 11% of Virginia peanut usage.
Trade -U.S. exports of peanuts in 2005-06 rose by +4.9% yr/yr to 515 million pounds. U.S. imports of peanuts fell by -45.9% yr/yr in 2005-06 to a 12-year low of 20 million pounds.