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DFP-RonSmith-Malcolm.jpg Ron Smith
Malcolm Broome, executive director, Mississippi Peanut Growers Association, and Sherry Saunders, Florida Peanut Producers Association, work the desk at the recent Southern Peanut Growers Conference in Panama City Beach, Fla.

Peanut experts see costs, markets as big obstacles

Costs, price and markets top peanut concerns

The faltering agriculture economy tops the list of issues that cause folks in the peanut industry to lose sleep, but those same insomniacs note several significant opportunities that ease their minds.

Farm Press asked four knowledgeable peanut professionals to weigh in on their top concerns for the industry but also to comment on hopeful opportunities during the recent Southern Peanut Growers Conference in Panama City Beach, Fla.

Malcolm Broome, executive director, Mississippi Peanut Growers Association; John Powell, executive director, American Peanut Shellers Association; Marshall Lamb, USDA-ARS research leader at the National Peanut Research Lab in Dawson, Ga.; and Tyron Spearman, executive director of the National Peanut Buying Point Association and editor, Peanut Farm Market News, talk peanuts.

Depressed ag economy

They start with their concerns. “The ag economy is depressed with current low crop prices,” says Lamb. “Also, environmental stresses, including drought last year, the hurricane and then rain last fall, have created a lot of stress financially on the farm, in the Peanut Belt as well as in the Midwest Grain Belt.

“Farmers are struggling. That worries me because farm security is tied to food security in this country. And we want to make sure that we continue to have abundant and affordable food.”

“The future of our export market, especially the European Union, is a big concern,” says Powell. “Our government has negotiated a contract with the EU for how we should inspect peanuts.

“We follow that contract to the letter, but when the peanuts get to Europe, they reinspect them and they are not passing. Our government needs to renegotiate a deal or we are going to lose the EU market, which is a major market for this industry.”

Powell says the APSA annually shells about 80 percent of the peanuts grown in the United States.

Non-tariff trade barrier

He explains the gravity of the grading issue.

“They don’t clean their equipment out between loads. They don’t sample the way that was negotiated. It is a non-tariff trade barrier that we plan to address with the U.S. government and other trading partners.”

Powell adds that the high quality standards U.S. peanuts are known for are not being recognized in the EU market.

“Not only are we not being rewarded, it’s like I said, a non-tariff trade barrier. They are not playing by the rules they help negotiate.”

Broome sees an attitude problem.

“Probably the biggest thing I see is the price affecting farmers’ mindsets, convincing them that they can’t grow a profitable enough crop to stay in business. We had some producers from 2018 who dropped out for that very reason. They had some bad weather, weren’t able to harvest them all.

“The one thing to worry about is trying to get them to see that they need to do a good job and make as good a crop as they can and understand that $400 a ton is kind of the rule of thumb. That’s been the average over a number of years.”

It’s not just the price, Broome says. “It’s not taking the extra time to put in those extra, minute details — planting on time and spending needed inputs. Peanuts require a few inputs that you can’t get by without.”

He says some producers are more accustomed to growing soybeans, which require less expense.

“One thing I try to preach all the time is to use necessary inputs, apply them right and they’ll make you a profit. And if producers don’t do that, they’re going to see what we’re seeing.

Attitude adjustment

“But the attitude that we need a government program, we need this, we need that, is counterproductive. We just need folks to buckle down and grow peanuts and grow them correctly.”

Peanut producers have resources at their disposal, Broome says, including Mississippi State University and the Mississippi Peanut Growers association.

“I know farmers who would be glad to give them the information they need. And if they take advantage of that, regardless of what this market does, we have the ability to sell those peanuts most of the time.”

“I think the biggest concern is staying profitable,” Spearman says. “You’ve got to be a good enough manager to stay in the game, to put your inputs together and try to make a profit. We can grow peanuts, but if we can’t sell them for a profit, we’re not going to stay in business.”

Ron Smith DFP-RonSmith-Parker.jpg

National Peanut Board President and CEO Bob Parker, left, chats with Farm Press/Farm Progress Senior Content Director Brad Haire at the Southern Peanut Growers Conference in Panama City Beach, Fla.

Market options

What are the keys to hanging in?

“The problem we’re having now is coming up with a world market price that we can support, more than $400 a ton. Peanut farmers are thinking that’s the max they can get.”

They have other options. A co-op plan allows them to receive benefits a year after selling their crop.

“The PLC program has been very helpful, too,” he says.  “If the price stays low, they get a little bump next October for last year. So, peanut farmers have two or three things working in their favor.”

Opportunities ahead

Other opportunities bode well for peanuts.

“Our opportunities are good,” says Broome. “As we’ve seen at this conference, consumers are looking for plant protein, and peanuts are an excellent source. We’re going to see people eating more peanuts.”

Those benefits, Broome adds, will pass down to the grower.

He says peanuts also serves as an excellent rotation crop. “If farmers do it correctly, they are growing cotton behind peanuts in a three-year rotation. Their cotton yields are up, and their peanut yields are up compared to growing all peanuts or all cotton.”

Promotion helps, too, he says. “We have good activity in Washington, D.C. Whether we are happy with what we get or not, we have the opportunity. State legislative delegations all work together and present a positive message for peanuts.”

Production detail

Spearman agrees with the need to pay attention to production details. “Peanuts require a good prescription and proper timing. If you follow that prescription and you follow the timing and you work with available programs, the future looks very bright.”

Spearman says promoting the health value of peanuts will pay dividends.

“Selling the world on the nutritional value of peanuts is important, especially because we’ve got some research now that shows peanuts may help you live longer. Peanuts may help prevent Alzheimer’s disease, but you have to get that message out to the public.”

Powell agrees. “Every month, new studies show how great a product the peanut is and how healthy it is. It’s also affordable, sustainable and one of the best nutritional products in the marketplace today.

“I get excited thinking of all the ways peanuts can affect health. And they taste good.”

Powell says tree nuts also provide health benefits, but peanuts provide those benefits more affordably and more sustainably.

The farmer factor

Lamb says the Southern Peanut Growers Conference emphasized the value of the peanut industry.

“We’re hearing new information related to the genomic initiative, looking at molecular markers from within the peanut genome that we can take into variety development and give producers peanuts that yield higher with fewer inputs. That will help their bottom line.

“I am also excited about the nutrition message. Dr Samar Sterling (The Peanut Institute) gave an outstanding presentation on the health benefits of peanuts. That is information we can use for promotion to inform people how to improve human health through peanut consumption.”

Lamb also serves as advisor for the Farm Press Peanut Efficiency Award, which honored the 20th class of outstanding peanut farmers at the conference.

The lessons those farmers bring to the conference about production, marketing and overall efficiency, Lamb says, provide encouragement to other producers.

“Being a part of the Peanut Efficiency Award for 20 years has been one of the most rewarding things I’ve done in my professional career,” he says. “This award provides information from growers that goes back to other producers who can use it on their farms to improve their operations.”

He adds that peanut farmers themselves may be the biggest source of optimism for the industry. “It starts with the farmer,” he says. “We honor some of the best farmers in the world. And this year’s class is amazing, producing peanuts in a very efficient and sustainable manner. And that keeps me optimistic.”

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