Price of Peanut Butter Going Up

Price of Peanut Butter Going Up

The food prices in Arizona, like the rest of the country, have been steadily increasing all year and the weather conditions across the country are doing their part to keep that trend going.  The drought and extreme temperatures across much of the South are causing more than just high air conditioner bills and wildfires.  The prices of several commodities are expected to jump as we head into winter due to crop damage caused by the unusual conditions.  As crop yields come in significantly lower than original expected, prices will continue to soar as demand goes unmet.

One crop that is expected to result in price jumps is peanuts.  The weather conditions in Texas and Georgia, two of the largest producers, have wreaked havoc on the peanut plants.  Some plants withered and died before producing a single peanut.  Other plants grew but were unable to mature because of the heat.  Many of the plants that did survive long enough to produce peanuts developed a toxin caused by the extreme heat that is difficult and costly to remove.  The price of peanuts is higher than many industry insiders have seen it go in more than twenty years.

Increased prices for peanuts mean everything made with peanuts is also about to go up.  In November, the J.M. Smucker Company, makers of Jif, is planning to increase their peanut butter prices by 30%.   This as demand for the kid-friendly, healthy spread seems to be growing.  The price increases are likely to stay in place throughout the winter and possibly well into the spring as manufacturers are forced to pass on the sharp increases in cost to their customers.

The US Department of Agriculture expects that the peanut crop will be 13% less than it was last year due to the weather and the crop shift many farmers undertook this year to grow cotton which is more profitable than peanuts.  The overage from last year’s crop, which also has issues due to last year’s drought, will be gone by early November.  As companies begin using the more costly crop, the prices of all things made with peanuts will jump to help cover those costs.  Although initial price increases are slated to happen in November, an additional jump may happen in January depending on whether the crop yield ends up being higher or lower than current expectations.

So what does all this mean for Arizona families?  A jar of peanut butter than costs $5.00 today will be $6.50 by November, and may end up over $7.00 as we head into the new year.   When it comes to peanuts and any products made with them, it will be a little harder to stretch your food dollar and fill your plate.

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