What is in this article?:
- The 2014 Farm Press Peanut Profitability Award winners all did an exceptional job of marketing this past year's crop, averaging from $529 to $725 per ton.
- Peanut producers are advised to spread their risks when considering a marketing strategy.
DINWIDDIE, VA., FARMER and Upper Southeast Peanut Profitability Award winner Billy Bain has seen many changes in peanut marketing during his long and storied farming career.
While efficiency is the name of the game with the Farm Press Peanut Profitability Award, this year’s winners were no slouches when it came to the fine art of marketing, averaging from $529 to $725 per ton for their 2013 peanut crops.
“All of these growers did a great job of marketing, getting well above the average price that most other growers received,” says Marshall Lamb, research director for the National Peanut Research Laboratory in Dawson, Ga., and advisor for the Peanut Profitability Award.
Lamb advises peanut growers to spread their risks when considering a marketing strategy.
“If a decent contract comes out – pre-plant or early summer – and you can cover a good portion of your crop, go ahead and take that. But leave some peanuts open in case bad weather does strike and the price increases,” he says.
Peanut Futures: Marketing for Profitability, an exclusive editorial series sponsored by DuPont Crop Protection, examines recent developments in U.S. and international peanut markets. This is the final story in the series.
As for the U.S. peanut market, oversupply remains a problem, says Lamb, and it’s still uncertain how this year’s planted acreage will shake out.
“There were a lot of farmers who were strongly considering not planting as many peanuts as initially thought because they didn’t want to go deep into June planting peanuts. And that’s not a bad thing as far as markets are concerned. Georgia was predicted to have a 53 percent increase in planted acres, but it won’t be anywhere close to that. A lot of growers kept their options open until the last minute this year,” he says.
What happens with the world peanut crop remains to be seen, says Lamb. “Argentina was in a period of cool, wet weather when they were struggling to get their crop out of the field. We’ve got an adequate supply of a high-quality, well-priced peanuts that we can enter the European markets with, and hopefully that’ll be an opportunity for the U.S. industry. China’s acres are down because the government there wants to increase their grain stocks.”
Efficiency should be the goal should continue to be the goal of peanut growers going forward, says Lamb. “Grow the best peanut you can at the lowest cost per unit.”
When it comes to marketing peanuts, Alabama farmer and Lower Southeast Peanut Profitability Award winner Owen Yoder says his primary goal is to cover his costs.
“I’ve done partial contracts to cover my costs, and then I leave part of it open. Last year, I contracted some peanuts and got offers at the end that were about the same as my contracted peanuts, so I just went ahead and sold them because I didn’t anticipate the market getting any better,” says Yoder, who markets through Birdsong Peanuts in Goshen, Ala., and farms in south-central Alabama’s Dallas County.
“I don’t play too much with the markets. There are certainly different options available, but I usually just go with a set contract price. I might not always get the best price possible, but the name of the game is to cover your costs.
“A farmer wears a lot of hats, and you have to make the best use of your time. You have to be aware of the markets. I was a little slow this year with contracts, but I like to get the most that I can. I like to spread it out a little bit – part of it in contracts and part of it cash sale,” he says.
Contracts aren’t looking as favorable this year as they were in 2013, says Yoder, and even though he realizes there’s a current imbalance in the peanut market, that’s not his primary consideration when deciding how many acres to plant.
“I don’t consider that as much as I do the rotation aspect. One crop complements another crop, and I try to look at the big picture rather than jumping from one crop to another based on the markets at the time. I stick pretty well to my established rotation. We use different chemistries with different crops, and that helps us to fight resistance.”