Peanut Butter Prices to Skyrocket
Posted on October 11, 2011
Prices for shelled peanuts are twice what they were one year ago. As peanut prices rise, peanut butter prices are also skyrocketing. Farmers planted less peanut crops this year, the planting season was delayed due to drought, and the excess heat hurt the crops.
Texas was especially hard hit: it suffered its hottest summer on record this year which really hurt the peanut crops. Wholesale prices of peanuts are expected to rise by around 35% or more, which is going to make the cost of peanut butter skyrocket.
Planters will increase their prices 40%. Consumers will see an increase of around $1 a jar. Lower income consumers will be especially hard hit by the increase: peanut butter is a great source of inexpensive protein. Vegetarians also rely on peanut butter as a staple. The problem is so bad that Smuckers -- the largest buyer of peanuts in the world -- is discontinuing the really large size jars of Jif because it can't guarantee adequate supply.
The WSJ's Paul Ziobro explains the situation: