 |
 |
The Peanut Butter Crunch
There are a whole lot of things that can be done with the humble peanut other than make peanut butter. We eat whole roasted peanuts at ball games and feed them to elephants at the zoo. Peanut oil is one of the finest cooking oils available, and peanut shells are used for mulch and animal feeds. George Washington Carver, the great African American inventor, discovered hundreds of products that could be made from peanuts. He used peanuts to make cosmetics, shampoos, and shaving creams; as a dye for cloth and leather; as a paint base; as a laundry soap and sweeping compound; and to make such foods as mock chicken, mock oysters, and mock veal. (You can read about Dr. Carver and find a list of peanut products he discovered at http://www.invent.org/book/book-text/23.html.)| Year | Price per Pound (cents) |
Output per Acre (100 lbs) |
Price per Pound (nominal) |
|||
| 1970 | 33 | 20.3 | 12.8 | |||
| 1971 | 33.6 | 20.7 | 14.6 | |||
| 1972 | 34.7 | 22.0 | 14.5 | |||
| 1973 | 36.5 | 23.2 | 16.2 | |||
| 1974 | 36.3 | 24.9 | 17.9 | |||
| 1975 | 36.4 | 25.6 | 19.6 | |||
| 1976 | 35.1 | 24.6 | 20.0 | |||
| 1977 | 34.7 | 24.6 | 21.0 | |||
| 1978 | 32.4 | 26.2 | 21.1 | |||
| 1979 | 28.4 | 26.1 | 20.6 | |||
| 1980 | 30.5 | 16.5 | 25.1 | |||
| 1981 | 29.6 | 26.8 | 26.9 | |||
| 1982 | 25.9 | 26.9 | 25 | |||
| 1983 | 24.7 | 24.0 | 24.6 | |||
| 1984 | 26.9 | 28.8 | 27.9 | |||
| 1985 | 22.7 | 28.1 | 24.4 | |||
| 1986 | 26.6 | 24.1 | 29.2 | |||
| 1987 | 24.6 | 23.4 | 28.0 | |||
| 1988 | 23.7 | 24.5 | 28.0 | |||
| 1989 | 22.6 | 24.3 | 28.0 | |||
| 1990 | 26.5 | 19.9 | 34.7 | |||
| 1991 | 20.8 | 24.4 | 28.3 | |||
| 1992 | 21.4 | 25.7 | 30.0 | |||
| 1993 | 21.0 | 20.1 | 30.4 | |||
| 1994 | 19.5 | 26.2 | 28.9 | |||
| 1995 | 19.2 | 22.8 | 29.3 | |||
| 1996 | 17.9 | 26.5 | 28.1 | |||
| 1997 | 16.3 | 25.2 | 26.1 | |||
Like other products, the price of peanuts is determined by the interaction of buyers (the demand for peanuts) and sellers (the supply of peanuts). Given a fixed supply, increased demand will cause prices to increase and decreased demand will cause prices to decrease. Given a fixed demand, an increase in supply will push prices down while a decrease in supply will push prices up.
Similar to most agricultural products, the demand for peanuts does not change significantly from one year to the next; an exception is those foods that become overnight crazes, like oat bran and broccoli sprouts. The supply does vary significantly, when the forces of Mother Nature intervene. The text noted that a drought in the early 1980s reduced the supply of peanuts and caused their price to increase. A good measure of the supply of peanuts is the output of peanuts per acre. The table and graph on this Web page show that the output per acre dropped from 2610 pounds per acre in 1979 to 1650 pounds per acre in 1980. The price rose almost five cents per pound. Output fell again in 1990, and, sure enough, price increased by almost 7 cents per pound from the previous year.
Reduced supplies do not always result in increased prices. Notice that in 1993 output fell again, but the price barely changed. Does this mean that the laws of supply and demand do not work? No! What we do not know is what was happening to demand at this time. Maybe people were buying fewer peanuts because of their high caloric content or for some other reason. If you would like to update the table and graph, you can obtain the data from the National Agricultural Statistics Service' s historic data series at http://www.usda.gov/nass/pubs/histdata.htm. Click on "Crops Data," then "U.S. Estimate Track Record 1866 -- Present," then "Track Records." It is a big file, but you can find peanuts in there.
