Will it go up or will it go down? A great unknown in the peanut industry for the past two years has been how growers would respond in the number of acres planted to the government's new program. The change in 2002 from a quota poundage system to a market loan system opened the door for any farmer to grow peanuts for the loan rate.

The farm bill was signed into law on May 13 of last year, well after peanut planting had begun, so the 2002 crop year was not a good barometer of how U.S. growers would react in the number of acres planted. The 2003 crop year, however, might give a more accurate picture of future peanut acreage trends.

When the farm bill was being debated in 2001 and 2002, opinions varied on how peanut acreage would shift in different regions of the country. Some said that changing to anything but a quota program would result in a dramatic increase in acreage in Georgia, where more than half of U.S. peanuts already were being grown.

“Some even thought we would double in acres from 500,000 to more than a million,” says Nathan Smith, University of Georgia Extension economist. “Others believed that acreage would decrease.”

Data released from the Georgia Farm Service Agency indicates that producers in the state planted just under 537,000 acres in 2003. This compares with just under 505,000 acres planted in 2002, an increase of 32,000 acres or 6.3 percent.

“What is interesting, though, is that there were 29 Georgia counties that had a decrease in acreage in 2003, 14 of which decreased by 1,000 acres of more,” says Smith. “Dooly County had the largest decrease, dropping by 6.714 acres or 38.7 percent.”

Most of the counties that had decreases in acreage in 2003 were in the northern part of the Georgia peanut belt, he adds.

“Twenty-five counties had acreage increases of 1,000 acres or more. Burke County had the largest increase, gaining 6,423 acres or 78.1 percent,” says Smith.

On a percentage basis, Wayne County increased from 33 acres in 2002 to 415 acres in 2003, a 1,153 percent increase. Appling County saw a 992 percent increase, jumping from 72 to 781 acres.

Of counties with more than 1,000 acres in 2002, Jeff Davis County had the largest increase, jumping by 226 percent and going from 1,420 acres in 2002 to 4,632 acres in 2003. Counties that increased in acreage were in the southern and eastern parts of the Georgia peanut belt, says Smith.

Some of the drastic shifts in Georgia's peanut acreage can be attributed to rotational needs, says the economist. In some of the eastern counties, producers who were growing continuous cotton shifted to peanuts this year because of its benefit as a cotton rotation, and because they no longer needed a government quota to grow peanuts.

Whether or not this trend continues will depend in a large part on the future direction of cotton prices, says Smith.

Peanut acreage decreases occurred in the Southwest and Virginia primarily because the government's quota program ended, he says. And a large acreage increase in South Carolina was another indication that growers need a viable rotation crop for cotton, he adds.

“Prior to this year, South Carolina really took a hit from dry weather on their cotton and corn crops. Those growers needed another crop to help them out. South Carolina growers had very good peanut yields this year, so we could see even more peanut acreage there in 2004.”

The Southeast's proportion of total U.S. peanut acreage is projected to go from about 55 percent to 65 percent this year, says Smith.

Despite a decrease in peanut acres nationally, total U.S. production is expected to increase over 2002 because of good yields across most of the Peanut Belt, says Smith.

U.S. peanut production for 2003 is forecast at 4.09 billion pounds, up 23 percent from 2002. Area for harvest is expected to total 1.28 million acres, down 2 percent from this past year. Yields are expected to average a record-high 3,205 pounds per acre, up 644 pounds from 2002. Record-high yields are forecast for Georgia, Oklahoma and South Carolina.

Production in the Southeastern states — including Alabama, Florida, Georgia and South Carolina — is expected to total 2.74 billion pounds, up 44 percent from last year. Expected area for harvest, at 849,000 acres, is up 8 percent from 2002. The average yield in the four-state area is expected to be 3,238 pounds per acre or 805 pounds more than in 2002.

The Virginia-North Carolina production is forecast at 396 million pounds, up 6 percent from October and up 20 percent from 2002. Area for harvest is expected to total 133,000 acres, down 15 percent from the previous year. Yield is forecast at 2,975 pounds per acre, up 875 pounds from last year.

Southwest peanut production — including New Mexico, Oklahoma and Texas — is expected to total 948 million pounds, down 12 percent from 2002. The region's area for harvest, at 295,000 acres, is 17 percent below the 2002 level. Yield is forecast to average 3,213 pounds per acre for the region or 166 pounds more than in 2002.

e-mail: phollis@primediabusiness.com