If Matt Mueller were a poker player, peanuts would be his ace in the hole. “It's a dependable crop,” says Mueller, who runs a diversified operation near Martha, Okla.

“With peanuts, we can budget and know pretty close to what we'll get for the crop. We have a set price for quota and we contract additionals. It's a definite source of income and is especially important since cotton prices went into the tank. I don't know why I planted cotton. It's hard to make a profit.”

Mueller started growing peanuts four years ago, after changes in the government program allowed quota transfer across county lines.

“It's the best diversification decision I've ever made,” he says. “We bought some quota four years ago, and we spring lease some more. We always contract additionals.”

He has added a few more quota pounds in the last five years. “At first, lease and purchase prices held steady,” he says. “But last year, prices jumped significantly, and we couldn't afford to buy or lease quota at artificially inflated prices.”

Mueller says rates dropped last spring. “Demand was down because of several factors,” he says. “Some farmers had gotten into a monocrop situation with peanuts and were beginning to see seedling diseases. They backed off acreage.

“Also, many farmers had a total wreck last year from diseases, wet weather, and an early frost.”

He still grows some additionals but says under his production system he can make a little profit with a $350 per ton contract for non-quota peanuts.

He gets more advantage than a dependable price, however. “Peanuts also work well into our rotation,” he says. “We grow cotton, wheat, grain sorghum and a little bermudagrass hay. A lot of farmers in the area grow continuous cotton or just cotton and wheat. We wanted to get away from limited rotation.”

He tried soybeans. “But this is just not soybean country. With peanuts, I can use different herbicides that help me get rid of nutgrass and morningglory problems that I can't eliminate with just cotton.”

He likes a peanuts, wheat and peanuts or peanuts, cotton, peanuts rotation. “I don't bale the peanut vines, so I improve the soil for the next crop. Peanuts will mellow the land.”

He plants no-till wheat behind peanuts and picks up about 20 units of nitrogen from the peanut crop.

“I also plant wheat for certified seed, so I have to plant in new ground. Planting behind peanuts is convenient. I get better yield and fewer production problems. I no-till wheat into peanut or cotton residue.”

He holds cost on peanuts but doesn't skimp on necessary practices.

He irrigates most of his peanuts and averages from 3,200 to 4,000 pounds per acre. “I use furrow irrigation on all except one field. It's the only one adaptable to a pivot.

“I can't irrigate all 300 acres of peanuts, but I can count on 1,100 to 1,800 pounds per acre from dryland production. I can make a profit with 1,800 pounds per acre.”

Dryland production costs are considerably lower. “Seed costs are $15 per acre less. I don't use fungicide on the dryland fields. I usually spray twice a season for leafspot on irrigated peanuts, so I save about $40 per acre on fungicide costs. Herbicide is $15 per acre less..

“And land rent is considerably lower without irrigation. That saves another $40 per acre. All together, I eliminate $100 or more per acre in dryland production.”

Mueller grows some Spanish peanuts and some of those usually go on dryland fields. “I don't plant runner-type peanuts without irrigation,” he says.

Spanish peanuts offer him a few advantages. He can usually get a pretty good contract and buyers want as many of the Spanish as possible in the domestic edible market. “I can usually find adequate quota in the fall to cover my Spanish production,” he says.

“I get a little less production from Spanish and prices are a little lower, but they come off early and help spread harvest. I can get the Spanish peanuts out in a slack time, in September, before the irrigated peanuts and cotton are ready.”

He grows several varieties to spread maturity dates and risk. AT 120, Tamrun 96 and Okrun make up his runner production. He plants Tamspan 90 Spanish type.

“The AT 120 gives me a shorter maturing runner variety,” Mueller says. “That helps space out harvest.”

He may take fewer peanuts to the dryer this year to save money from what he anticipates will be an expensive process.

“High energy costs will drive up drying expenses,” he says, “so I'll let them dry in the field a bit longer.”

He says harvest weather may dictate drying time, too. “If weather threatens to damage them I'll take them on in.”

Mueller says farmers benefit from the peanut program, but he's uncertain about the future.

“I could have bought more quota last year,” he says, “but I could not be certain of the program, so I held off.”

He has reservations about a support and supply management program. “I don't like the idea that someone can buy up a lot of quota and never grow peanuts. They just make a killing leasing it.”

He'd also like to see a more convenient leasing season.

“Often, we can't lease quota until April, and we need to have production plans in place by then. In some cases, we may plant peanuts on land that was fertilized in February, and we don't need that fertility for peanuts.

e-mail: ron_smith@intertec.com