I would be remiss if I didn’t mention that the news has been full of articles about an approaching sharp rise in peanut butter prices, due to terrible drought conditions. Some articles and blog posts highlight climate change issues, some do not. I chose this one to share, from the Milwaukee Journal Sentinel, partly because it also provided fun peanut facts in a sidebar, including my fave – that arachibutyrophobia is the fear of getting peanut butter stuck to the roof of your mouth.
We are a two brand household, and I still have to buy Skippy for the hardliners as well as the natural peanut butter I like (either Trader Joes or Laura Scudders). Costco has not raised its prices yet – I was in there on Monday and the two enormous 48-oz. Skippy jars wedged together were $8.39 – but Safeway was selling its 16-oz. jar for $4.99 last week, a big jump from the standard mid to high two dollar range that it was going for six months ago.
Here is the article. Click through to the link if you want the sidebar http://www.jsonline.com/business/peanut-prices-to-soar-132115333.html
Drought in South to send peanut prices soaring
By Joe Taschler of the Journal Sentinel
Oct. 18, 2011
Peanut butter prices are about to go nuts.
Heat and drought have ravaged the U.S. peanut crop, sending peanut butter prices soaring. For families watching every dime in an uneven economy, that means yet another staple product will cost more soon.
And we’re not talking peanuts.
“It’s absolutely huge increases,” said Mary McLaughlin, a vice president at Sheboygan-based Piggly Wiggly Midwest, which supplies 116 grocery stores in Wisconsin and northern Illinois.
In the grocery business, where prices for commodities such as coffee, butter and sugar have been known to bounce wildly, the peanut butter situation is unusual.
“This is unique,” said McLaughlin, who’s been in the grocery business 20 years. “I cannot remember this happening with peanut butter.”
The J.M. Smucker Co., which makes Jif peanut butter, plans to raise its wholesale prices 30% in November. Kraft Foods Co., which launched its Planters peanut butter in June, is raising prices 40% Oct. 31. A spokesperson for ConAgra Foods Inc., which makes Peter Pan peanut butter, was not immediately available to comment, but multiple media outlets report that the company plans to raise its prices as well.
The price increases add up to about 4 cents per peanut butter sandwich, said Marie Fenn, president and managing director of the Atlanta-based National Peanut Board, an organization that represents U.S. peanut growers.
That 4 cents might not seem like much, but it could leave a bad taste in the nation’s mouth.
Americans eat enough peanut butter in a year to make more than 10 billion peanut butter and jelly sandwiches, according to the Peanut Board. At 4 cents per sandwich, the cost increase adds up to $400 million.
And forget about producers putting fillers or additives to make peanut butter supplies go further. That’s against federal law.
If the label says the product is peanut butter, it must contain 90% peanuts, said Patrick Archer, president of American Peanut Council, a trade association based in Alexandria, Va.
Most peanut butter is usually about 93% peanuts, Archer said. “Dilute it, you could call it a ‘peanut spread,’ but then you can’t call it peanut butter.”
Besides peanuts, salt, sweetener and a little bit of stabilizer (to keep peanut oil from rising to the top of the jar) are in of a jar of peanut butter.
“That’s what you can put in peanut butter and still call it peanut butter,” Archer said.
Two bad years
Two summers of dismal peanut growing weather are largely responsible for the price increases, Archer said. “Given that it’s two years in a row, it will be showing up in supermarket prices,” he said.
“There’s no way you can avoid the impacts of Mother Nature.”
The U.S. peanut harvest is currently under way.
In a crop report issued Oct. 12, the U.S. Department of Agriculture is forecasting a harvest of 3.6 billion pounds compared with 4.2 billion last year. Exact numbers won’t be known until the harvest is complete.
Some of the nation’s prime peanut growing regions in the southeast and Texas have seen severe heat and drought conditions, Archer said.
Peanuts actually are not nuts at all but are a legume related to beans and lentils. Not every peanut grown meets edible quality standards, Archer said. Those peanuts end up being crushed to make peanut oil. Peanut butter is the leading use of peanuts in the U.S.
Americans spend almost $850 million a year on peanut butter, nearly half the $2 billion retail value of peanut products, according to the Peanut Council.
Besides a lousy harvest, worldwide demand for peanuts is growing. China is the world’s top peanut producer.
“The world’s getting bigger, and there are more mouths to feed,” Archer said. “There’s been a lot of upward pressure on commodity prices, and then when you have bad weather, it just adds a little bit more pressure to those prices.”
Consumption in the U.S. is also growing, Fenn said.
“We all are looking for more nutritious foods and more plant-based foods,” she said. “We are all trying to be smarter about our calorie budget, and we’re trying to eat more nutrient dense foods.”
Even with the rising prices, peanut butter “remains the hard to beat value food for taste, nutrition and affordability,” Fenn added.
The price increases will hit just as holiday baking of such things as peanut butter cookies drives up seasonal demand, Piggly Wiggly’s McLaughlin said.
She said the chain has sufficient inventory and is determined to shield customers from price increases.
“We had some warning that prices are going to creep up so we built some inventory,” she said.
“We stay aggressively priced,” she added. “We do what we need to do to keep the value for our customers.”
The Associated Press contributed to this report.