Peanut Market Update: Higher Supplies and Slower Demand Pressure Prices
Peanut farmers across the Southeast are wrapping up this year’s crop as peanuts continue to move into buying points. Some buying points have already shut down for the season, and prices remain under pressure as supplies outpace demand. According to recent data, peanut supplies are running about 34 percent higher than this time last year, a major factor contributing to the weaker market tone.
New insights from the recently published USDA Peanut Stocks and Processing Report provide a clearer picture of how peanuts are being used during the first three months of the marketing year—August, September, and October. The report shows declines across several key usage categories, raising concerns for producers as the market slows.
Peanut use in the candy category during the first three months of the marketing year is down 1.4 percent. Industry sources note that candy manufacturers have faced challenges sourcing cocoa, which has delayed candy production heading into November and December. Those delays could further impact peanut demand tied to candy manufacturing as the holiday season progresses.
October data also shows snack peanut use down 6.3 percent. This category includes the use of raw shell peanuts for snacks, an important outlet for peanut growers. Even more concerning for many in the industry is the decline in peanut butter use, which is down 5.8 percent. That drop is particularly disappointing given peanut butter’s reputation as an affordable, nutritious protein source.
When all usage categories are combined, total raw shell peanut use is down 5.1 percent for the first three months of the marketing year. Despite higher overall supplies, demand has not kept pace, contributing to a slower-moving market.
On the processing side, commercial processors utilized 189 million pounds of peanuts, roughly the same level as last year for the same period. Government purchases for the year include 3.25 million pounds of peanut butter and 77,000 pounds of roasted peanuts, offering some support but not enough to offset broader demand softness.
With harvest winding down, buying points closing, and usage lagging in several key categories, the peanut market continues to lose momentum. Higher stocks combined with slower consumption are keeping prices low and putting pressure on producers as they move deeper into the marketing year.
Going forward, the industry will be watching closely to see whether demand improves in snack, peanut butter, and candy channels, as stronger consumption will be critical to working through the increased peanut supplies currently in the pipeline.
Audio Reporting by Tyron Spearman for Southeast AgNet.