Peanut Growers Scramble with Bumper Crop
Record-setting production floods the Southeast
National peanut production should jump 67 percent over 2011, according to a 2012 peanut crop estimate issued by the USDA's Ag Statistics Service. Record high yields were expected in Florida and Georgia, with North Carolina and Oklahoma growers expecting to tie record highs.
Photo courtesy of the Georg ia Peanut Commission.
Great weather and clever management in 2012 created the best year ever for many peanut growers, especially those in the Southeast.
"This harvest was wonderful," said Donald Chase of Chase Farms, Inc. in Oglethorpe, Ga., a third-generation peanut grower who has 400 to 500 acres in peanuts. As chairman of the Georgia Peanut Commission's Research Committee, he said research has pushed the state's yield. The Georgia-06G cultivar, which Chase said had been in use for several years, is one that pushed production, while favorable weather conditions prevailed. Better crop management also contributed.
"There's more to it than having a variety; you have to learn how to manage it," Chase said.
In 2012, producers mastered growing a big crop. Marketing, however, was a different story. In March 2012, the USDA posted prices nationwide around $1,200 per ton. However, by early November, prices hovered around $525 per ton, according to USDA figures.
"Most of the growers are excited about the fact that they've made as good a crop as they've had on their farms," confirmed Don Koehler, executive director of the Georgia Peanut Commission in Tifton, Ga. "I think they could be more excited if prices were stronger, but that's what happens when supply goes up."
"It was the perfect storm on the positive side," said John Beasley, professor of crop and soil sciences and extension peanut agronomist for the University of Georgia. "There's a tremendous amount of opportunity we're looking at statewide, with an average yield that is the best crop ever."
While many growers had contracts for some of their peanuts, there was an ample supply, lowering costs for consumers. The industry is banking on increased awareness about the nutritional value of peanuts and peanut butter to support continuing sales over the next year.
This was one case where it was better to sell early than to hope for better prices later. Koehler cited contracts averaging $600 to $650 per ton when the crop was planted. However, about half of the peanuts planted were grown without forward contracts. When harvesttime came, prices were down.
Since about half of the harvest was considered a bumper crop, it would most likely go into government loans, which pay $355 per ton.
Koehler said it was important to remember that demand was elevated early in 2012 because of 2011's limited production.
"We can have 20/20 hindsight," remarked Koehler. "We had a short crop last year [in 2011] and a long crop this year [in 2012], and probably the best thing farmers could do is put some peanuts in government programs after the fact and hope for strong prices after the first of the year. You hope between January and October they'd get more than $355 and $360."
Suddenly peanuts galore
Southern peanut growers are more accustomed to weathering short crops after several years of drought.
Acreage devoted to peanuts was way down in 2011. In Georgia, for example, peanut acreage was the lowest it had been since 1926. In many cases, growers devoted acreage to cotton because of increasing prices, but when those tumbled in the spring, the emphasis returned to peanuts. Georgia produces almost half of the peanuts in the U.S., and the majority of its crop goes to peanut butter.
The Georgia Peanut Commission reports that statewide peanut acreage was up 50 percent in 2012, a trend that was expected to result in more than 1.4 million tons of peanuts, compared to 2011's approximate 800,000 tons.
Factors feeding 2012's crop, according to Beasley, include:
- Better rainfall and cooler-than-normal maximum temperatures created a perfect environment.
- About 75 percent of acreage was devoted to the cultivar Georgia - 06G, which grades well. He expects 85 to 90 percent use in 2013.
- Growers dramatically increased irrigation. In 2011, many nonirrigated crops weren't even harvested.
- Better crop management played a role, including a smarter focus on pesticides.
"I think we are all doing a better job controlling white mold. We spray at night, and I think that's been a huge factor with disease control," Chase explained. "The leaves fold up and you are able to spray at the base of the plant. There's no evaporating, so we have reduced fungicides in use."
Peanut growers were banking on increased awareness of the nut's health benefits to push sales after the initial harvest sales ended. While many growers have contracts on some of their yield, overproduction lowered the price for excess peanuts, leading to excellent prices for consumers.
Photo courtesy of the Georgia Peanut Commission.
As chairman of the Georgia Peanut Commission's Promotions Committee, grower Joe Boddiford said awareness of the peanut's healthy nature can't seem to grow fast enough.
"I think people are increasingly becoming aware of it, but I don't think people automatically associate peanut butter with a healthy diet," said Boddiford, who grows 465 acres of peanuts in Sylvania, Ga., at Joe Boddiford Farm. "Peanut butter has been an amazing success story the last few years, and peanut butter sales increase in hard economic times. Peanut butter is high in protein and certainly less expensive than animal protein. It goes over well with the children."
States like North Carolina produce peanuts best suited for in-shell sales and cocktail nuts. Bob Sutter, chief executive officer of the North Carolina Peanut Growers Association, is exuberant about the peanut's success from Virginia to Texas.
"From a producer's standpoint, their participation in the National Peanut Board and state promotion boards is most important," Sutter said. "Then they are charged with promotion of peanuts with a better demand through print advertising, ball games, radio and things of that nature. They try a lot of ways to increase awareness of peanuts and nutritional value."
Promotions Power Peanuts
Economy plays a role
Consumption of peanuts and peanut products has been off the charts the past five years, fueled by greater awareness of the nut's health value and by tough economic times, say growers and promoters. According to Patrick Archer, president of the American Peanut Council, "Peanuts are associated with high energy and high protein dynamics."
The economy has played a role in consumption as well, as consumers look for healthy alternatives to more expensive protein sources.
According to the Peanut Institute, peanut consumption in the U.S. increased from 2008 to 2009, and increased again in 2010. Grower and promoters attribute slowed growth in 2011 to limited supply and high prices.
Growers have high hopes things will break loose again. Collectively, they are hoping to see grocery store BOGOs ("buy one, get one" deals) and coupons to drive sales.
"In 2013, you'll see prices return to normal, and when that happens, it will give manufacturers more flexibility in providing discounts [to consumers]," Archer said. "They'll have more margin to work with."
Regional and local promotions by associations reach out to consumers where they are.
Joy Crosby, communications director for the Georgia Peanut Commission, included the following among promotional activities in 2012:
- GPC worked with Georgia Southern University's football program, promoting peanuts as an easy snack for games.
- Georgia Peanut Bank Week allowed participating banks to order and offer roasted peanuts and recipe brochures to customers and other visitors to their banks. "We try to promote the close tie between farmers and banking institutions and the importance of the industry to the economy," Crosby said.
- The commission had radio spots scheduled in November throughout the state to promote Peanut Butter Lovers Month.
- An online promotion with Atlanta's 94.9 The Bull radio station encouraged listeners to write letters to Santa Claus and to leave peanut butter cookies for him this year.
One who may have had great influence on America's peanut mentality in 2012 is Mr. Peanut, the mascot for the Planters snack food company. He received a makeover in advertisements launched in conjunction with Men's Health magazine.
The commercial featured Mr. Peanut with a pistachio and an almond as partners in crime to advertise Planters' NUT-rition Men'sHealth mix. The talking peanut dominated the commercial and has received slightly higher scores than his buddies for being an excellent source of nutrition.
For example, The Peanut Institute is a nonprofit organization supporting nutrition research and education programs encouraging healthful lifestyles with peanuts and peanut products.
In spring 2012, the institute released a study that stated that nuts are the best replacement for red meat and reduce mortality; it also cites peanuts as the most-consumed nuts in the U.S. (Visit http://bit.ly/LmsNdL and http://bit.ly/15erUKq for more information.) Other research findings have highlighted nuts for improved diabetes control without weight gain.
"If you look at peanut consumption figures, there has been a steady increase over the past few years, and a lot of the growth has been due to the outstanding health message that has gotten out for peanuts and peanut butter," said Patrick Archer, president of the American Peanut Council in Alexandria, Va.
"They are high in protein and have a high satiety factor. These are often listed as superfoods, because they have healthy fats, plant protein and a low glycemic index. You feel like you are indulging, but it's a great health food," Archer added.
Georgia's record-setting peanut harvest featured nuts of good to excellent quality for 2012. Grower Joe Boddiford, of Joe Boddiford Farm in Sylvania, Ga., said better-thanaverage weather-the best in at least five years-played the biggest role.
Photo courtesy of Joe Boddiford.
Exports power peanuts
Archer said the council's greatest emphasis will be on exports. "We are working hard to push exports, since there are so many excess peanuts for sale," he said. "Our major export markets are Canada, Mexico, Europe and Japan."
Canada is the largest export market, with more per capita peanut consumption than the U.S. "We love our Canada peanut lovers," Archer said. "They are great customers. One reason is it's a very popular breakfast food. Toast with peanut butter is very popular there."
Nationally, export production has grown steadily since 2002, when 3.2 billion pounds were exported. Projected exports for 2012 were more than 5.9 billion pounds. Domestic growers' greatest competitors include Argentina, China, Brazil and Nicaragua.
Archer said, "On behalf of the association, we continue to work very hard on growers' behalf to create new markets for peanuts, especially overseas, and to promote and sell more peanuts."
Jennifer Paire is a freelance writer based in Canton, Ga. Curt Harler, who has a B.S. in agriculture from Penn State University and an M.S. in ag from The Ohio State University, is a full-time freelance writer.