Going into 2008, peanut contracts had hit $500, corn and soybeans were in a bull market, and cotton was having a difficult time getting into the game. But entering 2011, things have changed.

“Now, the roles of cotton and peanuts are reversed, and the big question is whether or not peanuts can hold onto the acres that were planted in 2010,” says Nathan Smith, University of Georgia economist. Smith gave an overview of the peanut markets during the recent Georgia Peanut Farm Show held in Albany, Ga.

This past year, U.S. peanut acreage was up 16 percent, he says. “Georgia’s increase wasn’t as high as the national average because we planted more cotton. At the end of the 2010 marketing year, we still had a large supply of peanuts, more than 900,000 tons,” says Smith.

U.S. yield for 2010 was pegged by USDA at 3,311 pounds per acre. Georgia’s yield was equal to the record in 2009 of 3,560 pounds per acre, despite extreme heat and drought late in the season.

“Domestic consumption continues to grow, driven mainly by peanut butter, and exports are projected to remain steady,” says Smith. “Crush will be increased this year with some of the quality issues we saw in peanuts from the 2010 crop.”

In Georgia, he says, cotton and peanut acreage both increased in 2010. “We had an impressive peanut yield considering the conditions. Varieties are certainly performing better than in the past. But what kind of yields do we need to use in projecting our acreage and production? We had good years in 2008 and 2009, and over the last five years we’ve averaged a little over 3,200 pounds per acre. If you use a trend yield in projections, I’d use about 3,300 pounds per acre,” he says.