Peanut shortage sending peanut butter prices up

Consumers should be prepared to shell out a bit more for peanut butter soon.

Another hot, dry summer in key producing states and competition from more profitable crops like cotton have significantly shrunk the U.S. peanut crop this year. The tight supply means consumers will soon pay more for yet another grocery staple.

U.S. farmers are expected to produce roughly 1.8 million tons of peanuts this year, down nearly 13 percent from last year, according to a survey released Wednesday by the Department of Agriculture. Assuming that estimate holds, it would be smallest harvest recorded since 2006.

Peanut butter producers already have plans to hike prices for peanut butter significantly in the next few weeks. Those who package nuts for snacks say they are watching their competitors to determine whether price hikes will be necessary.

The J.M. Smucker Co., which makes Jif peanut butter, plans to raise its wholesale prices 30 percent in November. Kraft Foods Co., which launched its Planters peanut butter in June, is raising prices 40 percent on Oct. 31. A spokesperson for ConAgra Foods Inc., which makes Peter Pan peanut butter, was not immediately available to comment but multiple media outlets report that the company plans to raise its prices as well.