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Peanuts held on during drought of 2006

Not many Mississippi crops fared well during the dry summer of 2006, but one — peanuts — came through the drought relatively unscathed in the southeast and Delta regions of the state.

According to Mike Steede, Extension county director, George County, southeast Mississippi peanut producers are harvesting decent yields despite the bone-dry summer.

“We had a decent start, a dry middle and a little rain in late July and early August that helped pull yields up. One thing I’ve learned the last few years of working with peanuts is that they are an extremely forgiving crop,” Steede said. “They can tolerate a good bit of rain, and they can tolerate a good bit of dry weather.”

On the other hand, peanuts can take only so much, especially in a state where most peanuts are not irrigated. This was evident in the northeast part of the state, according to Mike Howell, Extension area agronomic crops agent based in Covington County. “Producers around Aberdeen got little if any relief from the dry weather, and some producers are harvesting 1,000 pounds to 1,500 pounds.”

Both Steede and Howell believe state average yields will be higher than the 3,000 pounds USDA projected in September, and could potentially be only a few hundred pounds off last year’s average of 3,750 pounds, which was second only to Texas. “I’m hearing of a lot of 5,000 pound yields down south,” Howell said. “I think we’ll have a decent year overall, but there will be some individual growers who will be hurt this year.”

While yields in northeast Mississippi certainly weren’t up to expectations, growers were able to save money on fungicide applications, according to Howell. “We talked to our pathologists and some of the experts in Georgia and they agreed that on our new ground and the dry weather, we just didn’t have the conditions to see disease develop. We got away with (reductions in fungicide use) this year, but each year is going to require a wait-and-see approach.”

There were problems with insects in some areas, according to Howell. “We had some problems with cutworms this year, and that concerns me going into next year’s cotton crop. We sprayed a little more for foliage-feeding worms this year, but that’s not a big problem for us.”

One positive for peanuts are higher prices due to lower U.S. production on lower yields and acres. In September, USDA estimated the total 2006 U.S. crop at 3.2 billion pounds, 1.6 billion pounds less than last year’s 4.8 billion-pound crop, a 33 percent decline.

U.S. peanut acreage dropped from 1.6 million acres in 2006 to 1.2 million acres in 2005, a 25 percent decline. Average projected yields of 2,650 pounds are 320 pounds down from last year’s 2,960-pound average and 436 pounds off 2004’s 3,076-pound yield.

In its September crop report, USDA pegged Mississippi peanut production at around 45 million pounds on 15,000 harvested acres, compared to 44.8 million pounds on 14,000 harvested acres in 2005. Georgia leads all states in peanut production. USDA estimates the size of this year’s Georgia crop at 1.4 billion pounds, which is 750 million pounds off last year’s crop.

Because of the short U.S. crop, buyers are getting nervous, and it’s having an influence on prices. “Growers are getting $370 to $380 a ton,” said Howell. “Loan last year was $355. The outlook is pretty promising. We went into this year with a huge surplus of peanuts. When things got dry and it looked like we were going to have a short crop, most of the supply was bought up.

“What I’m hearing is that we basically have a zero supply of peanuts. We are going to have the shortest production year since the 1980s. So if my elementary economics tells me anything, price should go up.”

Howell doesn’t expect significant increases in peanut acres in the state for 2007. “I don’t see a lot of opportunity for expansion in my county because of rotation needs. You need at least two years between peanut crops, and it’s better to have three.

“Also there is the uncertainty of what is going to happen with the farm bill. Modern day farmers budget for a farm bill. I had one farmer tell me, ‘I have to make decisions that will pay off by the end of the farm bill, because then the rules always change.’ So I don’t see farmers doing anything different in my county.”

The expense of transporting Mississippi peanuts should be a little less next year with the addition of a second buying point in the state. Josh Miller, president of Delta Peanut, a peanut buying point in Anguilla and a peanut producer, is purchasing the Greenville Compress facility in Greenville and plans to warehouse up to 24,000 tons of peanuts there.

“Our plan is for everything from Panther Burn and Hollandale south to go to Anguilla and everything from Louisiana, Arkansas and the north Delta to go to Greenville.”

Interest from shellers began around July 1, according to Miller. “We ended up selling to Birdsong. We have a two-year deal with them. They’ll offer contracts up front, which will be good for us because it will entice a few more people to grow peanuts next year. Birdsong believes that there is potential for 100,000 acres of peanuts in the Delta.”

Miller raised 120 acres of peanuts this year and will try to increase acreage to around 1,000 acres in 2007. His partner in Delta Peanut, Trey Heigle, is also a peanut grower and produced 1,700 acres in 2006.

“I booked half my crop at $10 a ton over loan,” Miller said. “Now it looks like I can get up to $30 a ton over loan, which is $385. We went with a conservative spray program this year and my cost, with rent included, was $365 an acre. So if I make a ton and a half, which is not bad considering how dry it was, I can net $200 an acre. That may help me save my cotton business.”

Peanut production around Port Gibson was also promising at the time of this writing. “We were blessed,” said Joc Carpenter, a cotton and peanut producer. “We had most of our peanuts in Redwood, north of Vicksburg. The drought line was just north of us. We got plenty of rain, and the peanuts really didn’t suffer. We had a pretty normal growing season, the peanuts came off when they were supposed to. I don’t know exactly what we’re making yet.”

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