Harshly dry weather, fewer planted acres and good ol’ supply and demand have joined forces to bring peanut farmers the highest prices in two decades for their crop.

Prices for this year’s crop, which is near half harvested, are running as high as $1,000 per ton. These are the highest prices since the end of the federal quota system in 2002, which regulated the U.S. peanut supply each year. These are also the highest prices since the early ‘90s, when prices reached record highs between $1,300 and $1,400 per ton.

The U.S. peanut crop will be short this year, roughly 1.8 million tons, or 300,000 tons less than in 2010, according to a U.S. Department of Agriculture estimate released this week. “Before harvest is finished, it could be even less,” said Nathan Smith, peanut economist with University of Georgia Cooperative Extension.

The U.S. uses or exports 2.1 million tons of peanuts annually. Carryover from last year’s crop is being used now. The shortfall this year has peanut buyers worried, he said. They need enough quality peanuts to keep manufacturers that make snacks and peanut butter running until next year’s crop can be harvested. They like to keep at least between 300,000 tons and 500,000 tons in the pipeline, or as a buffer.

“I don’t think we’ll get to the point of rationing peanuts next year, and I hope we don’t. But the industry knows now it will be cutting it uncomfortably close,” Smith said.

Georgia produces 45 percent of all peanuts in the country and will harvest 470,000 acres of peanuts this year. This is the state’s lowest acreage in more than 30 years. Drought plagued the crop in Georgia and other peanut-producing states. Texas, which supplies 15 percent of the U.S. peanut crop annually, was hit especially hard.

Georgia farmers depended greatly on costly irrigation to produce the crop this year. Fields without irrigation face low yields and poor quality. Georgia growers are expected to produce an average of 3,450 pound per acre. The U.S. as a whole is expected to average 3,256 pounds per acre. “But these yields could be optimistic,” Smith said.

“Though we are seeing near-record prices for this year’s crop, this will also be one of the most costly, if not the costliest crop, growers have produced when you considered the high price of fuel, seed, fertilizer and chemicals,” Smith said.

Peanut butter consumption has risen 20 percent in the last three years, which has pushed demand for peanuts higher. Major peanut butter manufacturers recently announced plans to raise peanut butter prices by 30 percent by the end of the year.