Sharp increases in peanut butter prices have begun going into effect following one of the worst peanut harvests in decades.
Kraft (KFT, Fortune 500) will raise prices for its Planters brand peanut butter by 40%, while ConAgra (CAG, Fortune 500) has instituted increases of more than 20% for its Peter Pan brand that went into effect this month.
J.M. Smucker (SJM, Fortune 500), which makes Jif, will introduce price hikes of around 30% starting Tuesday.
Consumers, meanwhile, are already seeing these increases reflected at grocery stores.
Maria Brous, a spokeswoman for the Publix chain, said the store had already made slight increases in retail prices and expects them to go higher “as the cost of goods continue[s] to rise”.
Dick Roberts, a spokesman for Giant Eagle grocery stores, said that “like all retailers,” the store is “being affected by industry factors on peanut butter pricing”. Chris Brand, a spokesman for Giant food stores, said the “outlook does not look good until next year’s crop is harvested and produced”.
Peanuts usually get harvested in the fall, around September and October.
While spokespeople for several grocery chains declined to provide specific pricing figures, the peanut industry is clearly under pressure this year after one of the worst harvests in recent memory.
Prices for a ton of runner peanuts, commonly used to make peanut butter, hit nearly $1,200 this month, according to the U.S. Department of Agriculture. That’s up from just $450 per ton a year ago. Overall, the USDA projects that American peanut production will hit 3.6 billion pounds this year, down 13% from last year.
Analysts attribute this drop to the intense heat and drought that hit the southern U.S. this year, as well as to high prices for other crops that led farmers to focus their efforts elsewhere.
Americans spend almost $800 million on peanut butter and consume an average of more than six pounds of peanut products each year, according to The National Peanut Board, a farmer-funded research group.