Recent Peanut Price Changes
There's been some talk of late about what's happening with peanuts and hence wholesale peanut butter prices.
Looking at the production side of things on a week-by-week basis since late August 2011, production has been fairly steady. Sure, there was a blip around the New Year where production plummeted, but all-in-all it's steady.
Looking at the prices though shows a different picture, where wholesale prices are around $.35 per pound vs the $.25 or so we saw all through August and September of last year.
Have a look at this graph that shows production vs. price. (Production is thousands of pounds; price is per pound.)
With most commodities, there's a clear correlation between production and price; in this case, the only thing we're seeing is a steady upward price trend that seems to be detached from production.
Looking back over the past few months and taking out the blips in price from November 12, 2011, and the blip in production from the New Year, production is fairly consistent, but prices aren't.
Well, I guess you could say they are in that they're consistently up.
What this means long term for manufacturers of goods who rely on peanuts and peanut butter remains to be seen, but when you're looking at a 50% increase in price at the producer level, it typically means two things:
- short term: higher prices for manufacturers
- long term: lower prices for manufacturers as more producers come online to take advantage of the higher prices
Whether or not it'll come to that remains to be seen, but given the current trends, I'd be surprised if prices don't go up--at least a little bit more--before they go down.
Labels: peanut butter, peanut butter prices, peanut prices, peanuts
Post a Comment