The viability of the Virginia market type of peanut in Virginia and the traditional growing areas could be on the line this season.
“If contract prices stay in the range they have been, some of our growers will have difficulty justifying planting this year,” says Joel Faircloth, Extension peanut specialist in Virginia.
About 22,000 acres were harvested in Virginia in 2005. As recently as 2001, Virginia peanut farmers planted 75,000 acres. It could certainly go lower. “Without a better contract price, we could see acreage at less than 20,000,” Faircloth says.
Loss for state
When a peanut farmer in Virginia gives up, it tends to be a loss for the state crop.
“Unlike the Carolinas, we don't have any suitable new land where we could expand,” says Faircloth. “There are very few regions of Virginia well suited to peanuts where they have not been grown in the past.”
There is only one significant exception: the Eastern Shore. “There are a few peanut growers there, but farmers there are accustomed to growing high value crops like vegetables, and peanuts haven't attracted much acreage away from them as yet.”
North Carolina, on the other hand, had and still has significant acreages that have never been planted in peanuts, but can produce them well. And, in fact, that is where some of the peanuts have moved since the program change, from the northeast to the southeast part of the state. Traditional peanut-producing counties like Northampton, Halifax, Hertford and Bertie have experienced a decline, while counties like Duplin and Sampson in the central Coastal Plain have gotten into the crop and are expanding.
Will do well
“Those real good sandy soils are going to do well in peanuts, as long as they get adequate rainfall,” says David Jordan, Extension peanut specialist in North Carolina. “Farmers in the central counties did not see peanuts as a possibility before, and now it is an option with some appeal. Lower prices for tobacco, soybeans, corn and cotton have been a factor affecting the shift to peanuts also.”
So while acreage has dropped since 2001, when North Carolina peanut farmers planted 123,000 acres, the drop has not been nearly as precipitous as in Virginia. According to the most recent USDA estimate, acreage in peanuts in 2005 was 96,000 acres. And in South Carolina, which has a wealth of new land, plantings have actually gone up, from about 10,500 acres to nearly 60,000 acres.
“There will definitely be peanuts grown in North Carolina in 2006,” says Jordan. “If the price is comparable to last year, I would think we would have roughly the same acreage as last year. Some farmers in older areas may get out. But that could be offset by more plantings in the newer areas.”
But it is a little premature to be making such projections, since the outlook for 2006 could change depending on what contract prices are offered. “It will be March when contracting gets going in earnest,” says Jordan. “But some may have started already. I expect contracting companies are going to play it close to the vest as far as price is concerned.”
There was a relatively heavy inventory of Virginias in 2005 that affected the market, says Jordan. “There are still a fair number in the supply chain, so I wouldn't expect high contracts like we saw in 2003 and 2004.”
However, he says, the Virginia-type crop was a little short in 2005, which may help contract prices. “Bad weather late in the season reduced the quality of the in-shell crop.”
The Virginia market type is no longer the only type grown in North Carolina. “We had several thousand acres of runner market types in 2005, and one company is actively seeking more runners in 2006,” says Jordan. “It is certainly becoming a more attractive alternative, if contract prices for Virginia market types decline. Runners are less expensive to grow. The price has traditionally been lower for runners than Virginias. But the Virginia price is dropping and so the differential is becoming less.”
Runners can yield as well as Virginias in the Virginia-Carolina area, he says “maybe better on finer textured soils.
“But does the market really need more runners? That's the question you have to ask yourself,” Jordan says.
The Georgia Green variety has performed well in North Carolina, says Jordan. “It has the advantage of being the best variety available for tomato spotted wilt virus resistance. There are some issues about this variety from the shellers' perspective, but it has certainly been dominant for a number of years.”
Runner varieties are being considered in Virginia also, thanks to sheller interest, says Faircloth. It's possible that production costs could be reduced since runners typically have less disease than Virginia types.
Once Glenn Carr of Windsor, Va., sold his 2003 peanut crop, he knew it was time to retire his digger.
“We just couldn't get paid enough money to raise them,” he says. “In 1995, we got $675 a ton, but the price just went down after that.”
Is not enough
It isn't expected to get over $500 a ton in 2006, and Carr says that just isn't enough. After being out two seasons, he says it is unlikely he will ever grow the crop again, but if the price were to rise significantly above $600 a ton it might be worth considering.
But he doesn't foresee prices getting anywhere near that. “There's no reason for them to come up if people raise them for the lower price.
“We are raising more of the crops we were raising before: Cotton and soybeans and a little corn and wheat. We haven't taken up anything new.”
Peanuts had been grown on Carr's farm for a long time while the quota program was in effect. “It certainly is a shame the grower can't share in increased consumer prices,” he says.