A further build-up of stocks is likely unless significant crush takes place. At least 100,000 tons of quota may go to CCC loan. The major issue continuing to face the peanut industry is trade and more specifically the importation of peanuts. Under the GATT agreement, imports of peanuts have increased. Argentina is considered the major competitor to US markets.
Tariffs placed on foreign peanuts, though initially high, decline over time.
As tariffs decline, the cost of foreign peanuts to US manufacturers becomes closer and closer to US peanut program support levels for quota peanuts. Should Mexico become a major producer and supplier of peanuts for export, the treat to US peanut farmers would be increased. Of larger concern is FTAA, the Free Trade Agreement of the Americas. This would be a major threat to US peanut farmers given the current price support-quota structure of the peanut program. The future of the peanut industry may well depend on finding a balance between the need for profit on the part of the grower and the realities of trade.