Three of the largest American peanut butter manufacturers, J.M. Smucker Co., Kraft Foods and ConAgra, the makers of Jif, Planter’s and Peter Pan, are all expected to increase their prices between the end of this month and the end of next month with Kraft putting its 40 percent hike into effect on Oct. 31. Unilever, the producer of Skippy peanut butter, is keeping a wary eye on the commodities market and has said that it will make price adjustments as needed.
Rising peanut butter prices are the latest price hikes facing American families that have seen the prices of food, from coffee to cereal, increase across the board this year. Prices of corn, soybeans and wheat, along with produce, meat, milk and fruit, have increased in grocery stores across the country this year. High food prices and high gasoline prices are wrecking havoc on the wallets of American families as families struggle with stagnant salaries and unemployment.
A blistering hot summer, lack of rain, and the decision of some farmers, in the two major peanut-producing states, Georgia and Texas, to shift cropland into more profitable cotton, corn, wheat and soybeans, have reduced peanut supplies as demand for peanut butter has increased rapidly. In Georgia, the nation top peanut-growing state, 70 percent of the peanut crop goes into peanut butter production and this, according to the United States Department of Agriculture, has pushed the price of “runner” peanuts, supplied to food processing companies for peanut butter, to nearly $1200 a ton from $450 a ton in 2010.
Record-setting heat, with blistering temperatures reaching 100 degrees or more, in Texas and Georgia, and no rainfall, are major contributors to this year’s reduced peanut crop. According to the USDA, this year’s peanut crop estimated at 3.61 billion pounds, compared to last year’s crop of 4.16 billion pounds of peanuts, signifies a 13 percent reduction. In Texas, the yield on an acre of peanuts, is expected to be 50 percent less than last year, while in Georgia, the peanut crop is expected to produce 1.8 million tons this year, a 13 percent reduction over 2010 production. In the United States, the peanut butter market is estimated at $2 billion in annual sales. Some grocery chains, producing their own brand label peanut butter, expect to cut back on peanut butter product lines, while increasing prices dramatically. An 18-ounce jar of Jif was priced recently at $3.19. With a 30 percent price increase that same jar is expected to be priced at $4.15 in the near future.
I am trying to think of ways to avoid the increase but the truth is that stocking up on peanut butter is no longer the answer. We live in a world where every week something new is being recalled or making people sick so it really does not seem like a good idea to buy a case of peanut butter because with my luck it will get recalled! What will you do when this increase goes into place???