Diving into the groundnut business? Yes or No

Groundnut is a legume crop grown mainly for its edible seeds. In this article, I will try to compare gross earnings from selling raw groundnut vis a vis processing groundnut in this write-up.

Groundnut can be processed into many things either as a main product or as a secondary product, but not limited to the ideas mention here:

1. Fried groundnut (you can fry your groundnut with spice or even with honey).

2. Groundnut oil

3. Groundnut butter

4. Groundnut cake for animal feeds

5. Groundnut biscuits

6. Peanut burger

7. Kuli Kuli

As of January 2022, a ton of Groundnut was going for N600,000. Which means if a farmer produces at least a tonnes of Groundnut from one hectare, he will make a gross revenue of N1,800,000. (After 3 months). However, if a farmer decides to plant groundnut and process it the same as groundnut oil and Groundnut cake and of course there is groundnut sludge.

As of January 2022, 25liters of Groundnut oil was retailing for N30,000 and 1kg of Groundnut cake was selling for N1,500 and 1kg of Groundnut sludge was selling for N1000.

It is important to note that one metric tonnes of groundnut when processed will give 420 liters of Groundnut oil and 480kg of Groundnut cake and 40kg of Groundnut sludge. One must be careful as there is a specific Groundnut type that gives higher oil quantity.

Using our 3 tons of groundnut yield to illustrate the processing of these three items. From 3 tons of groundnut oil, one will make 1260 liters of Groundnut oil, if you are selling 1 liter of Groundnut at N1200, it means that 1260 liters will be N1,512,000. For groundnut cake from 3 tons, one would get 1440kg of Groundnut cake, if one is selling the cake at N1500 per kg that would be N2,160,000.

For Groundnut sludge from 3 tons, one would get 120kg of Groundnut sludge, if one is selling the sludge at N1000 per kg that would be N120,000

If you add up the amount made from this processing, you would find out that the farmer that processes has doubled his revenue from the three processing that was done simultaneously (groundnut oil, groundnut cake and Groundnut sludge). He has made N3,792,000.

A sweeter part of the groundnut processing deal is if a farmer is packaging kuli kuli or peanut butter, the revenue is higher. As a farmer wouldn't it be better to double or triple your revenue by adding value to your produce?