Will Peanuts Respond to Good Ol Supply and Demand?
Nathan Smith University of Georgia The 2002 farm bill changed the rules for peanut farmers. The new peanut program places peanut farmers in unfamiliar territory and forces them to think differently about how they will market their crop. To get better-than-average prices for their peanuts in 2003, farmers will have to watch the peanut market more closely for pricing opportunities. The main driver for the new pricing system will be good ol supply and demand. Because of this change in drivers, peanut prices are expected to fluctuate and be more volatile in response to changes in the market. With this in mind, farmers planning their 2003 peanut crop should watch and understand the outlook for supply and demand. The 2001 peanut crop was a near record year and created an oversupply of peanuts which have carried over into the 2002 season. Total US production has averaged around 3.7 billion pounds the last 10 years. However, the 2001 crop totaled 4.28 billion pounds. To get rid of these extra
