Farmers in Georgia — the nation's largest producer of peanuts — plan to decrease plantings of the crop significantly by about 17 percent in 2006, following a trend seen in much of the Southeast this year.
If these early projections prove accurate, Georgia's peanut acreage will total about 630,000 acres or 125,000 acres below last year.
U.S. peanut producers intend to plant 1.39 million acres of peanuts in 2006, down 16 percent from last year. Of the 10 producing states, eight intend to plant fewer acres than in 2005, while Mississippi and New Mexico expect acreage to be unchanged from last year.
Southeast growers — those in Alabama, Florida, Georgia, Mississippi, and South Carolina — intend to plant 1.03 million acres, down 15 percent from last year. In the Virginia-North Carolina region, producers intend to plant 102,000 acres, down 15 percent from 2005. Growers in the Southwest, meanwhile, intend to plant 259,000 acres, down 19 percent from last year. These states include New Mexico, Oklahoma and Texas.
The expected decrease in peanut acreage is being attributed to a higher supply than in recent years, low farmer stock peanut prices, and higher input costs.
“The decrease in peanut acreage isn't too surprising considering the large supply and the fact that demand is idling,” says Nathan Smith, University of Georgia Extension economist. “We expected a decrease in Georgia of at least 10 percent, so 17 percent is significant.”
Many peanut producers in the Southeast saw disappointing yields last year, and that also has contributed to the decrease, says Smith. “Another big factor is that there were no contracts being offered at the time the initial planting intentions were made,” he says.
Rising fuel and fertilizer costs probably had a minimal effect on the reduction in peanut acreage, he says. “When you compare the costs of growing peanuts with corn and cotton, peanuts still look pretty good. There are higher fuel costs associated with peanuts compared to cotton, but that's offset by lower fertilizer costs,” says Smith.
In addition to decreasing their peanut acreage, Georgia farmers also are planning a reduction in corn, soybeans, oats and sorghum. The lone increases are in wheat and cotton with tobacco acreage remaining the same as in 2005.
Georgia's cotton acreage in 2006 is expected to be 1,300,000 acres. This is 80,000 acres or about 7 percent above the 2005 level. Some peanut acres have shifted back to cotton, despite high energy and fertilizer costs.
Looking across the Southeast, cotton acreage will be up in 2006 in every state except Alabama, says Don Shurley, University of Georgia Extension agricultural economist.
“In some states, the increased acreage in some crops and decreased acreage in other crops does not come close to zeroing out. There certainly could be crops other than these major crops in the mix or, also likely, some acreage has been taken out of production for this year,” says Shurley.
Nationally, farmers expect to plant 14.63 million acres to cotton this year, compared to 14.2 last year, an increase of 3 percent. “Using the 2001-2005 five-year average yield and acreage abandonment, this planted acreage would peg the 2006 crop at 21.12 million bales. If realized, this would be 2.5 million bales less than last year,” he says.
However, in 2004 and again last year, the United States experienced above-trendline yields and below-average acreage abandonment, says Shurley. “If this were to happen again in 2006, the U.S. crop could approach 23 million bales or higher. With foreign mill demand soaring and, as a result, U.S. exports growing, the prospect of a 21 to 23-million bale U.S. crop should be enough to hold the market near current levels until more is known,” he says.
Shurley says he isn't prepared to take a more optimistic outlook this early in the game. “The market (December futures) should rally back over 60 cents if the U.S. crop doesn't get off to a good start. Conversely, if the crop progresses well and/or if U.S. exports do not do well due to a number of reasons — including increased foreign production/competition and/or slower demand — then prices will weaken. But for now, I think the mid to upper 50s to 60 cents is the comfort zone right now. Rallies over 60 cents are good opportunities to consider strategies to manage potential downside risk,” says Shurley.
In Georgia, for example, cotton acreage has hung fairly close to DCP payment acres or 85 percent of enrolled base acres since passage of the 2002 farm bill, he says. This year's 80,000-acre increase in cotton compares to a 165,000-acre decline in peanuts, corn and soybeans.
Corn planting in Georgia for 2006 is expected to total 260,000 acres, according to growers' plans in early March. This would be a reduction of 10,000 acres from last year.
If these acres are realized, this would be the lowest acres of corn on record in the state. As in other parts of the United States, growers in Georgia apparently are reacting to rising fuel and fertilizer costs. By the end of March, about half the crop had been planted.
Georgia's soybean acreage for 2006 is expected to decrease to 150,000 acres. This is 30,000 acres or 17 percent below 2005. The potential for disease problems and better alternative crops are being cited as reasons for a reduction in acres. Planting typically starts round the first part of May.
Tobacco growers are planning the same acreage as last year. Acreage for 2006 is expected to total 16,000 acres. Sorghum planting for 2006 is expected to total 35,000 acres or 5,000 acres less than in 2005, as growers continue to look for drought-tolerant crops.
Georgia wheat seedings for 2006 totaled 300,000 acres, up 20,000 acres from 2005.
Planting conditions were good in the fall and early winter months. Oats planted totaled 70,000 acres for 2006, down 7 percent from the 75,000 acres planted in 2005. Oat acreage still remains strong as growers look for alternatives to the higher costs of other small grains.
Hay acreage expected to be harvested for 2006 is forecast at 600,000 acres or 50,000 acres more than last year.
In other parts of the lower Southeast, Florida farmers have indicated they intend to plant more cotton and hay but less corn, peanuts, soybeans, wheat and tobacco in 2006 than in 2005.
Panhandle producers intend to bale 300,000 acres of hay, an increase of 10,000 acres from the previous year. The acreage planted to cotton is expected to be 105,000 acres, up 19,000 acres or 22 percent from a year ago.
Florida peanut growers intend to plant 145,000 acres or 9 percent less than the 2005 acreage. Winter wheat acreage, at 10,000 acres, is down 8,000 acres from the previous year.
Planted acreage is projected at 1,100 acres for tobacco, down 1,400 acres from a year earlier. Corn and soybean planted acreage is expected to total 60,000 and 8,000 acres, respectively, compared with 65,000 and 9,000 acres in 2005.
In Alabama, the four leading row crops decreased their combined acres by 2 percent from 2005, with peanuts showing the largest decrease since 2003. This year's combined plantings are expected to be 1,120,000 acres, compared to 1,145,000 acres in 2005.
Peanut acres in Alabama are forecast at 190,000, down 35,000 acres and cotton acres, at 540,000, are down 10,000 acres from last year. Soybean acres rebounded to 170,000 acres, up 13 percent from last year, the same level as 2003.
Planting intentions for corn remained unchanged from 2004 at 220,000 acres.
Winter wheat seeded — forecast at 100,000 acres — remains unchanged from the 2005 crop, but was 28 percent below the five-year average. Hay harvested acres forecast at 710,000, are down 3 percent from last year.
Alabama sorghum growers are expected to plant 12,000 acres, an increase of 2,000 acres from last year. Planted acres of oats are estimated at 50,000, unchanged from last year. Sweet potato intentions are 2,500 acres, down 200 acres from last year.