Peanut Surplus

It's amazing how screwed over the U.S. taxpayer is...

U.S. Appears Headed for a Peanut Surplus

Right now, the United States has too many peanuts and that, experts say, could be bad news for the peanut commodity program unless something is done to whittle down the piles.

"We're afraid if we cost the government a lot of money, we'll get less in the next farm bill," said Tyron Spearman, executive director of the National Peanut Buying Points Association.

Some 215,000 tons of peanuts are still unsold from the 2004 crop and agricultural officials predict growers will produce another 2.3 million tons this year, Spearman said.

Despite recent growth in peanut consumption, Americans use only about 1.6 million tons a year and another 300,000 to 400,000 tons are exported.

That leaves a surplus of about 485,000 tons.

Farmers won't lose because their government crop program guarantees them $355 per ton. The losers could be federal taxpayers who pay the difference between the guaranteed price and the actual market value of the peanuts.

Low peanut prices increase government costs, while higher prices reduce government costs.