When You Hit Rock Bottom……

Tyron Spearman addresses a group of farmers and the agribusiness community. Mr. Spearman was optimistic for the peanut market in 2017.

Tyron Spearman addresses a group of farmers and the agribusiness community. Mr. Spearman was optimistic for the peanut market in 2017.

A highlight of the recent 2016 Columbia County Peanut Twilight Tour was the presentation by an enthusiastic Tyron Spearman. Mr. Spearman is the Executive Secretary of the National Peanut Buying Points Association. This followed on the heels of an uninspiring report from Spearman in 2015 at last year’s Twilight Tour. The industry faced growing concerns of storage issues and low prices associated with a growing peanut supply and building stockpiles of peanuts in storage. Farmers were faced with the lowest prices for peanuts in a decade coming into the 2016 Season.

However, Spearman reported a surge in optimism for the peanut industry in 2016 and into 2017. It was a presentation that reminded me of a favorite Wynona Judd song; when you hit rock bottom you’ve got two ways to go, straight up or sideways. In fact I thought any minute Mr. Spearman could burst out one of my favorite verses. “Things are tough all over, but I’ve got good news. When you get down to nothing, you’ve got nothing to lose.” We never got to the Wynona lyrics, but the presentation by Mr. Spearman was in-fact inspiring to the crowd of farmers and the agri-business community looking for a reason to be excited in an era of falling commodity prices.

Spearman rattled off case after case of favorable examples which will help the peanut industry work-through an oversupplied market. He suggested this will translate to improved prices at the farm level.

  • 200,000 tons of in-shell peanuts “disappeared” to China; the Chinese sent manufactured goods and shipping containers returned to China full of peanuts. Demand for nutritious, high quality peanuts is growing by the Chinese middle class
  • Month after month of increasing peanut usage in 2016
  • Huge exports; raw-shelled up 20%, in-shell up 90%, peanut butter up 13%
  • Domestic peanut usage up 3.8% for the year, expected to finish year up 4%
  • Peanut snack use up 18%
  • Government purchases for nutrition programs up 33%
  • Total USA production estimated to be below 2015 on lower acres planted
  • Crop harvesting challenges in Argentina reducing their crop by 25%. Exporters in Argentina having difficulty to meet shipping contracts. In some cases no goods available at all, in other cases peanut products are delayed or substituted
  • Millennials (18-34) are the largest group in the United States, and these consumers are very clear about what they want: simple ingredients, free from artificial flavors, free from gluten, less sugar, less sodium, and convenience

The participating group of farmers and agri-business came away from the discussion inspired. I was reminded of a comment by Mr. Spearman from years past.  Something to the tune of “If we don’t grow it, we can’t sell it.” The recent low prices encouraged greater demand, and will grow the consumer base at home and abroad. This nutritious and delicious product will find a satisfied customer somewhere in this great big world, and it all begins at the farm.

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