Peanut Situation and Outlook Peanut Situation and Outlook for 2000/2001for 2000/2001

Southern Region Agricultural Outlook ConferenceSeptember 25-27, 2000

Peanut Situation

Crop conditions a mixed bag U.S. production on a downtrend Domestic demand slowly increasing Exports flat Stocks at burdensome level but expected to

be trimmed in 2001 Lowest prices in a decade

Peanut Planted Acres by Region

0

500

1000

1500

2000

US Southeast Southwest VC

U.S. Peanut Yields

1600

1800

2000

2200

2400

2600

2800

3000Po

unds

US Peanut Production

20002500300035004000450050005500

Mill

ion

Poun

ds

Production

US Peanut Production and Quota 1990-2000

0

0.5

1

1.5

2

2.5

3

90 91 92 93 94 95 96 97 98 99 '00

Crop Year

Farm

er S

tock

Equ

ival

ent

Mill

ion

Tons

Basic Quota Effective Quota Production Food Use

Quota Plus Buybacks

U.S. Peanut Balance Sheet million pounds (Sept 13, 2000)

25.628.4Average Price103512291392Ending Stocks411641613575TOTAL USE391496401Seed & Residual720720562Exports710713460Crush229522322153Food Use515153904967TOTAL SUPPLY169169155Imports375338293963Production12291392848Beg. Stocks

2000/01 Proj.1999/00 Est.1998/99

World Peanut Production by Country

3%

1%

35%

21%

40%

US

Argentina

India

China

Other

World Peanut Production

0

2

4

6

8

10

12

14

Mill

ion

Met

ric

Tons

1998 1999P 2000F

USChinaIndiaArgentinaOthers

Source: FAS, USDA

Domestic Food Use Of Peanuts

0

0.2

0.4

0.6

0.8

1

1.2

1.4

89 90 91 92 93 94 95 96 97 98 99F

Crop Year

FS

Tons

Adjusted For Imports

Edible Peanut Use by Product 1999/2000

51%

23%

26%

PeanutButter

Candy

Snack

Domestic Peanut Use

0200400600800

10001200140016001800

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

Mill

ion

Poun

ds

Total Candy Snacks Peanut Butter

Use of Shelled Edible PeanutsAugust thru June

8.3

12.3

-1.6

2.8

-7.4

14.7

4.4 3.6

-10

-5

0

5

10

15

20

Perc

ent C

hang

e

97/98 vs 98/99 98/99 vs 99/00

Candy Snacks PButter Total

Government Purchases For Food and Child Nutrition Programs

0

5

10

15

20

25

30

35

40

95/96 96/97 97/98 98/99 99/00 *

Crop Year

Thou

sand

Ton

s FSE

* Through June ‘00

Trend in the Volume of Exports for USA

0

100

200

300

400

500

600

YEAR

THO

USA

ND

ME

TRIC

TO

NS

Major Peanut Export Destinations

29%

27%15%

12%

4%3%

10%

NetherlandsCanadaMexicoUnited KingdomSpainJapanOther

1999 Marketing Year

Old Crop Carry-In Stocks

0100200300400500600700

Farm

er S

tock

E

quiv

alen

t, 1,

000

Tons

Marketing Year

U.S. Average Peanut Price

232425262728293031

1991 1992 1993 1994 1995 1996 1997 1998 1999

Cen

ts /

Pouo

nd

Average Price

Price of 50% Peanut MealSoutheast Mills

0

50

100

150

200

250

91 92 93 94 95 96 97 98 99*

Crop Year

$ P

er T

on

* Estimated

Price of Peanut Oil, Southeast Mills

0

10

20

30

40

50

60

91 92 93 94 95 96 97 98 99*

Crop Year

Cen

ts P

er P

ound

* Estimated

Outlook for 2000-01

Prices at support level despite drought conditions

Continuation of current trends on supply and demand side– Reduction in additional peanut acreage– Increasing yields– Steady growth in demand– Global competition

Peanut Industry Issues

Quality - aflatoxin Irrigation receiving

contracts Increased Promotion –

National Peanut Board Competitiveness in

export market Future of the Peanut

Program