The peanut industry is a vital economic engine for many rural economies in the Southeast.

Trouble is, it tends to run in fits and starts, resulting in a bumpy ride for those who are dependent on it.

“Over the past several years, the engine has been running at many different speeds, all dependent on supply and demand and the impact of high production years on the acreage and total production in following years,” says Marshall Lamb, research director at the National Peanut Research Laboratory in Dawson, Ga.

The United States peanut industry, says Lamb, generates approximately $4 billion annually in economic activity, and much of this activity is located in rural areas that are directly dependent on peanuts to sustain rural economies and foster rural economic development.

“Our industry is a vital component of the economic engine that supports these rural economies,” adds.

Taking a look back at what has led the peanut industry to where it is now will give us an idea of where we’re headed in 2013, says Lamb.

“In reality, all of this started in 2008 when we delivered a 2.58 million ton crop that led to a carryout of more than 1 million tons going into 2009.”

Carryout, he says, is the amount of peanuts carried forward from one crop year to the next, basically reflecting the amount of peanuts available to keep the mills supplied from August until October.

“In the United States, we have a shelling capacity of 165,000 tons per month which means we need a carryout of at least 500,000 tons for this three- month period.

“Although production in 2009 was down, the amount of peanuts carried in from 2008 led to a carryout of more than 900,000 tons going from 2009 into 2010.

“Then, in 2010 and 2011, we had back-to-back droughts that led to significant problems in peanut quality resulting in high losses in processing due to re-milling and blanching.

“Supplies of edible quality peanuts quickly tightened which led to the price un-contracted farmer stock peanuts in 2011 reaching the $1,000-per-ton mark, as shellers and manufacturers scrambled to secure peanuts, says Lamb.