How will peanut price hikes affect businesses and consumers?

The hot summer of 2011 — which featured the seventh-warmest July on record, according to the National Oceanic and Atmospheric Administration – is going to have shoppers steaming in the grocery aisles this fall.

Raw peanuts are up to $1,150 a ton from $450 last year, according to a Los Angeles Times blog post.  And that’s leading to some astounding price hikes for that high-protein, budget stable, the common jar of peanut butter.  Wholesale prices for popular brands like Jif, Skippy and Peter Pan are rising by 24 percent to 35 percent, the Wall Street Journal reports, while Kraft’s new Planter’s peanut butter may jump 40 percent.  You can see the week-by-week hikes in this U.S. Department of Agriculture chart, via Bloomberg.

That’s bound to be the buzz at next week’s Sunbelt AG Expo for producers, promoted by the American Peanut Council, which also lists major peanut shellers and exporters and other fun facts  on its website; if you’re in a peanut-producing region you might check it out for potential sources.  Here’s a good roundup from a commodity site of state peanut production for the 2010-2011 season; you may be surprised at how far outside George the legume is grown.

Clearly the peanut/peanut butter peg on its own is a great basis for a food-price story; any number of food processing companies — including small local bakeries, candy and snack makers, supermarket pastry producers, restaurants and even bars and bistros — use the peanut in some shape or form in their staple goods.  With commodities like cocoa, fruit, coffee and sugar already climbing in the past year or so, what’s this latest hit doing to their product offerings, profit margin and prices?  And, of course, what’s it doing to the pocketbooks of the school lunch crowd?

Meanwhile, overall food inflation is always a meaty topic, especially with consumption-heavy holidays looming — from Halloween onward — and the shift to winter’s comfort food and heartier fare.

Obviously, personal finance story angles abound here, from consumer tips on how to shop wisely and find substitutes for higher-priced goods — your state’s extension service can help here with home economics experts — to more nitty-gritty stories about the plight of food banks.  For the corporate angle, talk with organizers of food distribution centers, soup kitchens, community gardens, etc., about donations from area businesses — is the quantity or nature of contributions changing as the food-cost scene changes?

The business end of the food chain also lends itself to interesting stories, from how chefs are modifying restaurant menus to how supermarkets plan promotions and sales.  Mine has taken to bundling all of the ingredients for a meal, for example — free potatoes, rolls and carrots with the purchase of a pot roast.  This sort of tactic in your local stores is a natural peg for comparing wholesale costs with retail costs and demonstrating where grocers — an industry known for meagre profit margins — eke out a profit when wholesale costs go up.

For statistical information, the USDA’s Economic Research Service is a trove of information.  Here’s it’s just-out 2011-2012 forecast which says food inflation will abate slightly next year but still be above average.  Data for various categories from beef to eggs to fats and oils is included in the release.

And one last note about peanuts — they’re a key ingredient in many of the high-calorie pastes, butters and other therapeutic foods being used to fight malnutrition and starvation in poor countries from Haiti to Somalia.  What will high legume costs do to the manufacture and supply of these desperately needed goods?  I wasn’t able to find a directory fo so-called medical food manufacturers, but check with you state’s commerce department, industry associations and other sources — you may find an area manufacturer is involved and lead yourself to a compelling story like this one, from NJ.com about one local firm’s lifesaving Nutty Butta.