Peanut Butter Prices Kids

— Written By

See below. You will need to mold this into jargon appropriate for young readers. Good luck.

From: Laura Anastasia [mailto:lanastasia@weeklyreader.com]
Sent: Wednesday, October 19, 2011 1:50 p.m.
To: David Jordan
Subject: Weekly Reader interview request *on deadline*

Hi David, I am an editor for Weekly Reader, which publishes educational news magazines for kids nationwide. I am writing an article about the rise in peanut prices and I am hoping to interview you on the topic. We could speak by phone or by email, whichever is more convenient for you. (I have included my questions below.) Would you be available to speak this afternoon or sometime next Monday or Tuesday (10/24-25)? My deadline is Wednesday, 10/26. The article is for kids ages 7 to 11, so my questions are pretty basic. Thank you in advance for your help. I look forward to hearing from you.
Sincerely,
Laura Anastasia

QUESTIONS 1. What are the main causes for the jump in peanut prices?

Peanut planting in 2011 (the number of acres) was lower than normal because of prices the farmer could receive for soybeans, corn, wheat and cotton (and possibly other crops.) These crops had high prices, and while peanut prices were relatively good for the farmer, peanuts carry more risk because they are more expensive to grow. Thus, farmers were willing to grow crops other than peanuts because economically it was better for them and the other crops carried less risk.

2. Did the drought affect other crops and their prices as well?

Yes, the lower acreage of peanut in 2011 was going to make the stocks of peanuts (the actual supply) tight (just enough to go around, hopefully.) But then comes the drought in Texas and in some other areas. When you combine less acreage than needed and a drought on the acres planted, the production for the 2011 crop of peanuts (being harvested now) was going to be low. Therefore, when supply and demand economics are considered, the amount of farmer stock peanuts available for uses like peanut butter, candies, etc. is low compared to what is needed and thus raw peanuts (that are used for all these products) are worth a great deal because the supply is low.

3. Why might farmers have decided to plant other crops instead of peanuts last spring? Do peanuts cost more to grow?

See above and generally:

Cotton $625/acre
Corn $350/acre
Soybean $200/acre
Peanuts $825/acre

AND, peanuts have to be dug (out of the ground) and this can be stressful if we get wet in the fall or have tropic weather systems. The other crops do not have to be dug.

4. How long is the peanut price increase expected to last?

High peanut prices will most likely remain in place until next year this time, if I had to guess. It will take more peanut acreage in 2012 without a major drought or other production problem to get prices lower because there will be more peanuts available for people to use to make peanut butter and other products.

Thanks,
Laura

Laura McClure Anastasia
Contributing Editor, Weekly Reader
www.weeklyreader.com
(407) 826-1443

Home office:
10155 Bennington Chase Drive
Orlando, FL 32829

Article first appeared as North Carolina Peanut Note (PNNC-2011-061)