High Peanut Prices Encourage More Farmers To Consider The Crop

LITTLE ROCK, Ark. -- Drought and strong prices could push more peanut production out of traditional regions and into states such as Arkansas and Mississippi not known for growing the crop but with ample water to give it a try.

Some major peanut states, including Georgia and Texas, have struggled to grow the crop amid an extended drought, leading farmers elsewhere to consider cashing in on prices that have soared as production dropped.

In 2010, American farmers harvested 2.1 million tons of peanuts, according to the National Agriculture Statistics Service. That fell to 1.8 million tons in 2011, a 15 percent drop that caused prices to more than double to about $1,000 a ton.

"Peanuts are going to be a real good option," said Greg Gill, who has started growing peanuts on his farm near Walnut Ridge, in northeastern Arkansas.

Gill said he was growing rice on his sandy soil, but as fuel prices rose, it became increasingly costly to run pumps needed to flood his fields. Besides avoiding that cost, he said peanuts don't require as many costly treatments for weeds and pests as other crops common to the area, such as soybeans, corn and cotton.

"You get a lot more net money on the farming side on those types (of sandy) soils," Gill said.

Although more farmers are considering peanuts, Gill remains a rarity in Arkansas. This year, farmers in the state planted only 4,000 acres, up from 1,000 acres in 2010.

Georgia produces by far the most peanuts, though it dropped from 565,000 acres planted in 2010 to 475,000 acres in 2011. Alabama and Texas are the other big producers, with smaller crops in states including North Carolina, Florida and Oklahoma.

Kerry Colbert, who signs up farmers to sell their crops to peanut processor Clint Williams Co. of Madill, Okla., said Mississippi growers planted about 16,000 acres in 2011 and could expand to 30,000 acres next year.

One stumbling block, Colbert said, is that farmers need closer collection points. Clint Williams is trying to respond to that concern by building up to three new collection centers in Arkansas and Mississippi.

Colbert, who put more than 11,000 miles on his truck last month traveling to meet with farmers, said his company wants to ensure a more consistent supply.

"If you are centered in one area, it's a great risk. We can spread our risk out by getting out in a different area," Colbert said.

So far, they have been pleased with the response.

"We've been relatively surprised at the amount of interest," he said. "We knew there would be some, but we didn't know so many would completely go in."

The abundant water sources in Arkansas from lakes, rivers and aquifers makes the state attractive for peanuts and other crops. Still, growing peanuts is an adjustment for farmers, who must change their techniques to harvest the bean, which grows underground.

"Disking the soil, the planting, that's about the same," said Mike Andrews, who works for the University of Arkansas Division of Agriculture. "But when you get to the harvest part of it, that's different."

First, farmers use a digger to pull the plants out of the ground, where they'll rest for a few days to dry. Then they run a specialized combine that separates and collects the peanuts from the rest of the plant.

Walter Rice, a farmer from Jackson, Tenn., who grows peanuts on sandy soil in east Arkansas, said it took some practice to become accustomed to the new harvest method, which is a slower process than those for picking above-ground crops.

Rice said adding peanuts to the mix of crop rotation has the extra benefit of improving the quality of his soil.

Andrews said he expects other states, including Arkansas, to grow more peanuts, though it's too early to predict how much.

As early as 1909, the oldest records available, Arkansas farmers were growing peanuts. The National Agriculture Statistics Service shows that production ended in 1959 and didn't resume until 1997.

Rice said he sees expects peanuts to regain a niche in Arkansas.

"They're never going to rival Georgia, I don't think. But it certainly can make some good income for the state," he said.

Comments

[Frank-Landfield]

08:45 AM on 12/27/2011

Peanuts?!
:-)

[Veluriel]

12:22 AM on 12/27/2011

Although this article is interesting enough and talks about the effect on individual farmers, let's not forget that the U.S government has a heavy hand in the peanut industry.

"To protect domestic industry by keeping prices artificially high, the United States Department of Agriculture (USDA) aids peanut farmers through commodity programs. In the 2008 Farm Bill, the marketing quota for peanuts was eliminated and the Price Support Program was switched to a Direct and Counter-Cyclical Payment Program. Direct and counter-cyclical payments provide benefits to producers with eligible historical production of peanuts whenever the effective price is less than the targeted price." (Wiki)
http://www.ers.usda.gov/AmberWaves/November04/features/peanutsector.htm
http://www.peanutgrower.com/home/2008_JulyFarmBill.html

[mikecrt]

05:33 AM on 12/26/2011

If you're thinking of a major investment in becoming a peanut farmer, I'd think twice. You know how fast I and my entire family can give up peanuts and peanut related products? Oops, we just did.

[Karl Wilder]

02:26 PM on 12/25/2011

They are so fortunate that peanut allergies are so 'yesterday' and everyone is doing gluten 'allergies' now.

[ontariogirl]

06:19 PM on 12/23/2011

I guess Rosanne Barr wasn't so nuts after all. :)

[frank day]

02:39 PM on 12/23/2011

We stocked up on 6lb. containers of peanut butter a month ago.

The price has now jumped from $7.32 to $9.37 a 22% increase.

[SBrooksB]

05:09 PM on 12/23/2011

Frank, have you found what you consider to be a good source for bulk peanut butter?

Also, is it natural peanut butter, or sweetened and stabilized? Thanks.