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Peanut Butter Prices Headed Up
November 2, 2011
That peanut butter and jelly sandwich is going to cost you more after the next time you pick up peanut butter at the local grocery store.
Some peanut butter brands expect to raised prices by as much as 40 percent due to a short supply of peanuts. Drought across the nation cut peanut production by about 13 percent, according to the USDA.
Pictured above: The sun sets in the distance behind a dust cloud created by a recent peanut harvest at Gobbler Road and Highway 97 near Walnut Hill. NorthEscambia.com photo, click to enlarge.
Comments
18 Responses to “Peanut Butter Prices Headed Up”
REGARDING:
“Wish I could do it with gasoline for my car.”
You can. Drive less. Make each trip count. Live closer to whatever you actually need. Buy and drive smaller vehicles when you do drive.
Everytime the price of gasoline goes up, demand goes down. Everytime the price goes down, demand goes up. If we only drove based on necessity, consumption wouldn’t change. Since consumption of gasoline does change, it means we have options.
David loving oatmeal and peanuts and life
(among many other things and people)
Last chance to order that peanut butter waffle the local restaurant is offering. Next it will be an oat shortage which means no oatmeal. I hate to live without my two favorite cookies to make but I won’t die. Refusing to buy a product at 40% higher prices is our right as consumers. Wish I could do it with gasoline for my car.
REGARDING:
“Surely the price of peanut butter will fall right back down as soon as a good harvest comes in. Won’t it…..?”
I don’t know what the history of peanut butter prices is prior to January 2001 but the monthly prices are listed at:
http://data.bls.gov/timeseries/APU0000716141?data_tool=XGtable
The price for peanut butter was $1.959 pound January 2011, dropped to a low of $1.619 in February 2005 down to 82.6 percent of the January 2001 price), has been over $2 per pound most of the time since November 2007, was $2.134 in September (9% higher than in January 2001) but that is still lower than it was December 2008 or the first six months of 2009.
This assumes you can trust the government workers who put the history together and you can check the site to see if I just made it all up or check my math to see if I messed up.
Wait a minute, I just checked, you can change the starting date back to 1984 and see the monthly data as well as a graph showing it going up and down from a low of $1.476 at the beginning to a high of $2.208 in April 1991 then down, then up, then down, then up, with lots of jiggles along the way but with April 1991 still the highest cost/price.
David in a changing world
I wouldn’t mind the higher price for peanut butter so much if the additional cost was going to our farmers. They work hard and put out mega-bucks before 1 peanut is ever produced, then they hope and pray for a decent crop. The good Lord sends the harvest, but the farmers break their backs to do the work. When the price of peanut butter goes higher than meat, or higher than people are willing to pay, the shelves will be full of expired peanut butter no one can sell and no one can eat. It will then fill a landfill rather than a hungry belly.
Craig said…”Where does it end?!? Every time you turn around something has to go up, With a lame excuse to explain why.”
I said…Aw heck,Craig. Surely the price of peanut butter will fall right back down as soon as a good harvest comes in. Won’t it…..?
Where does it end?!? Every time you turn around something has to go up, With a lame excuse to explain why.
REGARDING:
“Farmers make no sense around here, they are losing money on the cotton ”
If a farmer does something which does not make sense to you, that doesn’t mean he is stupid.
It would be funny if it were true that farmers lose money every time they plant cotton. I guess they do it just to get rid of all that excess money they all have?
AND:
“South America does it, with no chemicals”
Actually, nobody grows plants without using any chemicals at all. Water is a chemical, carbon dioxide is a chemical.
David made of chemicals
@Just me Again- Thanks
I would rather see peanuts planted than the poisonous cotton. Farmers make no sense around here, they are losing money on the cotton 1. because it requires so many inorganic applications 2. because they don’t go organic which would costs a lot less and poison less of us. South America does it, with no chemicals. It would sell for a lot more. Crop production losses that are 13% less peanuts can equal a 40 % increase, look how many peanuts it takes to make the product.
REGARDING:
“if the crop is only down 13% why would the price of peanut butter rise 40%? ”
One would assume set demand drives the difference.
Some users will only use peanuts if they are cheap. Others MUST have peanuts to put out their product so they are willing to pay more to keep their share from being reduced.
For examples, peanut butter cups and Reese’s Pieces can not be sold if they don’t have peanut butter in them. Cooking oil might be peanut oil or safflower oil or canola oil or whatever but producers will only switch if the price goes above that of the alternative which might well be 40 percent higher or the total supply of oils might be more limited since draught will effect other plants too. Thus, both sets of users will try to continue to try to use peanuts at the previous rate but can’t.
Cooking oil users have more flexibility but not unlimited, Reese’s doesn’t have anywhere near the flexibility. They can’t switch to almonds or walnuts or cashews and still sell the same product.
They figure if the price rises that amount, demand will drop in line with supply. it isn’t a linear thing. (And of course, they could be wrong. This is just economists estimating.)
David in a nonlinear world
REGARDING:
“Are peanuts still subsidized by the federal government?”
Yep.
David for unlimited peanut production
Inexpensive Alternative fer peanut butter ….make your own .
2 cups peanuts …pre roasted
1 1/2 teaspoon peanut oil if desired
1/2 teaspoon sugar if desired
Place all ingredients in a food processor with metal blade
Pulsate till creamy
Scrape into air tight containers place in fridge for day or two
To set for paste consistency
No added chemicals, additives, preservatives
Eat. Enjoy . Be happy
OH NO!! What will lunch be @ the County Jail…LOL!!!
I hope the chinese people, do not get turned on to peanut butter. Goodness knows we need the exports, but peanut butter, I don’t know where to start. I bought four large jars yesterday at the advantage, I wish I could have bought, a few dozen. Rotate your stocks, do quality surveillance inspections, with some fig pursurves or preserves if you like,
Are peanuts still subsidized by the federal government? If so, it might be a good time to end that program.
I’ve been reading about the current situation with climate, water resources, food production, etc. and it is scary some of the things happening. One thing of interest is that with some pushing the use of certain grains to make fuel, we are really setting ourselves up for a world of hurt. There are serious concerns the production level of grains is going to fall short of demand by the world’s population for we’re starting to see production levels drop in some areas of the world due to climate changes. Higher temperatures can cut yields by 10% or more and if temperatures get too high, the plant will simply stop producing.
As to making fuel, this ties our grain prices to oil prices and in the future every time oil goes up grain prices will shoot up accordingly. And this doesn’t even consider water issues, which the US is seeing in the Southwest now.
The effects of inflation are being felt, and nobody wants to admit it. “Quantitative Easing”, as the Fed likes to call it. Things will get much worse before they get better, unless you elect the only man running who knows about and is willing to address the root of our nation’s monetary and fiscal problems, RON PAUL 2012.
if the crop is only down 13% why would the price of peanut butter rise 40%? something smells in Denmark