One thing's for certain: Peanut producers will be operating under a vastly different program for the next six years. Reaction to the peanut specifics of the new farm bill, however, differs depending on the perspective and the region. Just how the farm bill will shake out in peanut country remains to be seen.
The legislation ends quota and replaces it with a target price of $495 per ton, a marketing loan of $355 per ton, plus storage, handling and other costs, and a $36 per ton fixed payment.
The new law has separate and equal payment limits for peanuts: $40,000 for fixed payments; $65,000 counter-cyclical payments; $75,000 for LDP; and $360,000 total. Marketing certificates will be authorized and the three-entity rule will be continued.
The title also includes quality/inspection language and country of origin labeling for peanuts. It allows yield substitution for lower crop production years. Under the new law, producer cooperatives can serve as loan service agents if approved by the Secretary of Agriculture.
“It's a good peanut bill and a good bill for those who derive their livelihoods from agriculture,” says Armond Morris, chairman of the Georgia Peanut Commission (GPC). Morris calls the bill “fair” for producers and quota holders. “The bill protects the future of our industry and the investments of the past.”
Reaction in a different region of the Peanut Belt, however, has been different.
“Disappointed.” That's how Bob Sutter, CEO of the North Carolina Peanut Growers Association, describes the general feeling in the V-C region over the new peanut bill. “We had hoped for a higher target price of $520 per ton.”
On the positive side, the quota buyout payment, at 55 cents per pound over five years, came out better than expected, Sutter says. The “buyout” would give quota owners 11 cents per pound or ($1,100 per ton) for five years. They will have the option of getting the 55 cents in one-lump sum or 11 cents per pound per year for five years.
Sutter believes many growers in the V-C area will find it “very difficult” to produce peanuts at the $355 loan rate and the $495 target price.
He describes the mood as a state of confusion.
“We didn't know until the first day of May what the program would look like,” Sutter laments. “Now that we know, farmers still don't know what to do.”
Sutter says a reduction of peanut acres is likely in this first year of the new peanut program. Just how much is uncertain.
“After this first year, people will make the decision of whether it's in their best interest to continue producing peanuts,” Sutter says. “Peanut farmers in North Carolina are just that — peanut farmers.”
Russell Schools, executive secretary of the Virginia Peanut Growers Association, agrees. “It will take a year or two before it settles out to see whether or not things are going to work out” for individual farmers.
In the coming weeks, peanut organizations will be holding meetings designed to explain the ins and outs of the new program.
“We'll have to see where the yield level is for farmers to be able to make ends meet at the $355 loan rate,” Sutter feels.
“We are going to have to see what shellers are willing to pay to get the crop planted,” Sutter says. “We grow the best Virginia-type peanuts here in the V-C area. It now becomes a question of whether shellers are willing to pay for the peanuts to be grown here. The shellers have not indicated how much they are willing to pay.
“You can't expect farmers to plant and not be able to make a profit,” Sutter says.
The new program is “going to be shocking to many people who have not been following it closely,” Sutter says.
The USDA will publish regulations for the new program.
The GPC has a summary of the bill's main points on its Web site at http://www.gapeanut.com