Weather cause of costlier peanut butter

Published 9:56 am Wednesday, October 19, 2011


FRANKLIN—If you’re a careful shopper — and who can afford not to be these days — then you’ll notice sooner or later a higher price, albeit slightly, on something as American as apple pie: peanut butter.

What’s to blame?

The weather, of course.

“Because of a drought, there’s a short crop in Texas and Georgia, and a fair crop in Virginia,” said M.L. Everett Jr., a farmer in Capron. He is also chairman of the Virginia Farm Bureau Federation Cotton Advisory Committee.

“Peanut-butter prices will go up,” he said. “I don’t know how soon; the manufacturer will decide that, but I expect to see it right shortly.”

Dell Cotton, manager of the Franklin-based Peanut Growers Marketing Association, said most of the peanuts grown in Virginia, North Carolina and South Carolina are not used to make peanut butter.

Those peanuts are more likely to come from Georgia, Alabama, Florida, Texas and Oklahoma.

Chris Drake, Southampton County’s extension agent, said the “V/C type,” as they are called, are the jumbo kind, used at ball parks and fancy gourmet servings.

Cotton said rising peanut butter prices “can be attributed to a few different things.”

“Last year’s crop in the southeast (Georgia and Alabama) was not a really good quality crop, and that affected supplies somewhat.

“We needed a really good crop to offset last year’s crop. That’s not really happening. The southeast crop is OK. The issue is the southwest crop.”

A shortage in the latter area will cause peanut butter prices will go up.

“Smuckers did (raise its prices) a few months ago, and I learned of manufacturers announcing they’ll do the same.”

Drake stressed that shoppers won’t see a $3 jar of peanut butter go to $6.

“It’ll be a slight increase but not a drastic increase. Just like cotton, jeans won’t go from $35 to $55. Some of the cost will be absorbed by manufacturers.”

Meanwhile, the big issue for area growers such as Everett is that many will miss out on profiting from the higher prices.

“Our problem is that 90 percent of peanuts are already contracted. They’re in the $650 to $700 a ton range,” said Everett.

Prices are usually fixed in January or February for that year’s crop, he added.

For those non-contracted, the asking price could be as high as $1,000 a ton.

“People like myself won’t be able to tap into the additional price. I’m expecting we’re going to deplete our supply next year. I feel pretty certain we’re going to get higher prices next year. It’s supply and demand,” said Everett.