Two of Georgia's leading food industries, peanut and chicken production, faced crises this year. In one case, it's led to higher prices at the grocery store. In the other, it's yet to have much of an impact at retail, but higher prices for consumers may be coming.
The price of peanut products -- most notably peanut butter -- has been slowly rising, the result of the decision by farmers to reduce the number of acres planted with peanuts, and a crop-choking drought. Together, that led to decreased peanut output in Georgia -- the number one peanut-producing state -- and triggered classic supply-and-demand economics.
The average price nationwide for creamy peanut butter hit $2.24 per pound in November 2011, up from $2.03 in November 2010, and from $1.96 in June 2011, according to the U.S. Bureau of Labor Statistics. December data was not yet available.
A check of peanut butter prices at one metro Atlanta grocery store this week showed a one pound jar of peanut butter cost from $2.48 to $3.99, depending on the brand.
Other peanut products, including peanut oil, also stand to be affected by the increase.
Peanut industry executives said wetter weather and more acres planted in peanuts could bring greater price stability next year.
The national Consumer Price Index for food was up 4.6 percent for the year through November.
The cost of chicken, another staple, has remained relatively flat in recent months even as poultry producers say they need to reduce production and boost prices to restore or improve profitability. They have suffered from the high cost of feed corn and fuel. Georgia is also the top poultry-producing state.
One local supermarket chain has been selling boneless, skinless chicken breast for $1.99 per pound this week.
Mike Giles, president of the Georgia Poultry Federation, said that there has not been any significant price increase in chicken in the last three months even though, "there has been a sustained decrease in production over the fall months."
Giles said that while "the poultry industry has historically had up and down cycles ... 2011 has been one of the most difficult ever in the modern history of the industry."
Major poultry producers Sanderson Farms and Pilgrim's Pride have been racked with financial losses of late. The industry said, however, that the reduced production eventually should lead to higher prices.
"There was an acknowledgement in the industry that there was too much chicken on the market, particularly considering what you could charge for it," said Mike Lacy, head of the poultry science department at the University of Georgia.
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