As harvest of a substantially smaller peanut crop got started in earnest in Virginia and the Carolinas in early October, optimism abounded that the over-supply of 2005 may soon be a thing of the past.
“We had way too many peanuts a year ago,” says David Jordan, North Carolina State University Extension peanut specialist. “But now supply is closer to getting back in line.”
Bob Sutter, chief executive officer of the North Carolina Peanut Growers Association, says, “I am excited about the prospects for our peanuts next year. The supply has been reduced drastically, and demand continues to be strong.”
Plantings in North Carolina were about 85,000 acres in 2006, down from 97,000 in 2005.
In Virginia, plantings in 2006 were down much more drastically, to only about 15,000 or perhaps 16,000 acres, says Joel Faircloth, Virginia Tech Extension peanut specialist. That would be close to a one-third reduction from 2005, when Virginia planted 23,000 acres.
“But for next season, our carryover will be reduced for both runners and Virginias,” says Faircloth. “I am expecting acreage to come back up this next year.”
Plantings for this South Carolina crop were estimated at 56,000 acres. That would be about 7 percent less than in 2005, but still far more than three years ago, when peanut production first went on the free market.
The rains were spotty, but for the most part adequate in the peanut-producing areas of the state.
“It looks like our yields are above average,” Jordan said in late September. “They aren't barn busting, but they are good, perhaps in the range of 3,100 pounds per acre. In 2005, we averaged around 2,800 pounds per acre.”
Few had been dug before the last week of September. Jordan says most harvesting will be finished by Oct. 20 if weather permits. The crop progress is about normal, but it will seem late to growers since the last two crops were very early.
Some runner-types are being grown, but the percentage of the total crop produced from runner varieties is still relatively small, says Jordan. North Carolina growers planted about 6,000 acres of runners out of a total of 85,000 acres of peanuts. That is about 7 percent.
“Runners have looked pretty good,” says Jordan. “You can definitely grow runners here and do well, but they are not going to take over our production any time soon.”
One big reason is that mills in the area are still set up for Virginias, and some adjustments would have to be made if runners made up much of the crop. Segregation of the two market types at the mill would be an issue.
“Most Virginia contracts for this crop were in the range of $425 a ton,” said Jordan. “That was down about $75 a ton since the program ended. You have to make good yields to make a profit at that price. I don't think North Carolina growers will plant peanuts if the price gets much lower than that.”
There has already been considerable attrition, he said. “We have dropped about 40,000 acres since the program ended.”
On the other hand, there were a substantial number of new growers after the program ended. “New growers enjoyed a yield boost as a result of planting peanuts in most cases entirely on new land,” says Jordan. “But that may have run its course, now that most land that came in has been planted in peanuts at least once.”
Another factor is that traditional growers have generally extended their rotations as they have reduced their plantings. “So the differential is diminishing,” he says.
What would happen if the 2007 contract price rose substantially? Sutter says some of the traditional farmers who left peanuts may be looking longingly at the crop and hoping contract offerings will increase.
“Some traditional farmers sat out 2005 and 2006 because of the low prices offered for contracts and the need for rotation on their land,” he says. “For instance, Northampton County farmers really cut back. Most farmers still have their equipment. So if we see some upward movement in prices, I think some of them might come back into peanuts.”
In Virginia, as in North Carolina, planting of runner varieties seems to have fared very well. “Farmers are generally pleased with the health and overall look of their runners,” says Faircloth. Because of seed availability, Georgia Green is the only runner variety grown in significant quantity in Virginia. As of Sept. 20, runners looked a little more mature than Virginias, he adds.
“We had 2,500 to 3,500 acres of runners and perhaps just a few Spanish for seed,” he says. “There may be some potential for runners here due to some disease resistance that they have.”
There was an interesting note among Virginia varieties this season, Faircloth says. Perry, a variety that has always been considered late-maturing, actually looked as mature as the early maturing varieties at the end of September.
The leading Virginia varieties are Perry, VA 98R, Gregory and Wilson, and Gregory, VA 98R, NCV11 and Perry in North Carolina. Some newer Virginia varieties are playing more of a part: Champs from Virginia and Phillips and Brantley from North Carolina.
Unlike the Carolinas, Virginia has little new land suitable for peanuts where expansion could take place, except for the Eastern Shore (or DelMarVa Peninsula). And farmers there, accustomed to growing higher value crops, have shown little interest in growing peanuts.
In South Carolina, the acreage reduction was more modest than in Virginia and North Carolina. With an apparent good yield on the way, production might actually be higher than in 2005. That is the way USDA pegged it in September, projecting production of 173.6 million pounds compared to 168 million the year before.
“I am looking for a state average yield of about 3,000 pounds per acre,” says Brad Boozer, marketing specialist for the South Carolina Department of Agriculture.
If the planting estimate of 56,000 acres holds up, it will be much more than was ever planted before the free market went into effect.
“The most we ever had in the program years was 9,000 acres,” says Boozer. “Peanuts are still an attractive crop in South Carolina. They have been very beneficial to South Carolina agriculture and a good business for farmers.”
Right at two thirds of South Carolina peanuts are Virginia types and the rest runners, he says.
A boost to consumption — although probably a very small one — might be on the way thanks to the South Carolina state legislature, Boozer points out. Earlier this year, boiled peanuts were declared to be the official snack food of South Carolina.