This study analyzed the competitiveness of peanuts for the U.S. and China over the 1988-93 period. Economic cost, cost components, yield, and net returns were examined using the Mann-Whitney test. Results indicate that net returns to farm management and risk in peanut production were substantially lower in both the domestic and world markets for American peanut producers than for Chinese peanut producers due to higher economic cost in American peanut production. American peanuts were less competitive than Chinese peanuts in terms of costs and net returns. Findings suggest that reducing costs and improving economic efficiency of production should be the most important priority for the U.S. peanut industry as the world moves toward freer trade. The future competitiveness of U.S. peanuts not only depends on its high quality, but also depends on its relative price in the domestic and international markets.

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Author notes

1 The study was supported by a grant from the Georgia Agric. Commodity Commission for Peanuts and State and Hatch funds allocated to Univ. of Georgia.