Peanut Backgrounder

Like producers of other agricultural commodities, U.S. peanut growers in recent years have confronted pressures from market forces and the impacts of policy developments, both domestic and international. Most notably, peanut policy was transformed in 2002 by the elimination of a decades-old marketing quota system. This policy step represented a fundamental change that was accompanied by substantial adjustments in the peanut sector, such as major shifts in production area. While demand growth since has been encouraging, strong production growth has contributed to an increase in peanut supplies and at least a short-term increase in government outlays for income support and storage costs. The prospect of further changes to the peanut program is a source of uncertainty due to Federal budget pressures and the potential implications of existing trade agreements and ongoing Doha Round world trade negotiations.