While National Peanut Butter Day traditionally is a cause for celebration every Jan. 24 (for the 15 people who remember it), this year’s observance seems a bit muted.
You can thank skyrocketing prices in 2011 for that — and it’s about to get worse. According to Kraft (NYSE:KFT) Canada, peanut butter prices are going up another 35% at the end of January thanks to continuing peanut harvest problems.
This is merely a continuation of 2011, when a weak peanut crop caused numerous companies to raise their peanut butter prices throughout the year, with the biggest hits coming in October. Among the headline price jumps floated about?
- Kraft, Planters, up 40%
- J.M. Smucker Co. (NYSE:SJM), Jif, up 30%
- ConAgra (NYSE:CAG), Peter Pan, up 20%
The most recent numbers from the Bureau of Labor Statistics reflect the jumps. Peanut butter sold for $2.23 per pound in November 2011 — the highest since it started tracking prices in 1984. The previous peak was $2.21 in April 1991.
While droughts in Texas and Georgia hurt supplies, a trend of farmers away from peanuts and toward higher-margin crops like corn and soybeans also heavily contributed to the shortage.
Now it appears that same trend will put further upward pressure on prices in 2012.
— Kyle Woodley, InvestorPlace.com Assistant Editor