Far-reaching changes in the peanut support program have mandated that growers take hard looks at the way they manage and market their crop in the absence of a guaranteed price.
Concentrating on quality and turning more attention to marketing topped the list of adjustments the three Farm Press Publications Peanut Profitability Award winners noted during an awards breakfast at the recent Southern Peanut Growers Federation annual meeting in Panama City, Fla.
The three winners, from South Carolina, Georgia and Texas, also cited high yields and efficient production as essentials for profit.
“We have to maintain yield and quality,” said Roger Neitsch, a Gaines County, Texas, producer and the Southwest region winner. “We have to grow a profitable crop to stay in business,” he said.
He also said that maintaining high quality will be critical in a global economy where competitors spend far less on labor and other inputs.
“High yield and quality will be essential with competitors coming after our markets,” said Mike Newberry, Early County, Ga., and winner in the Southeast Region.
“Good quality will sell,” said Ricky Kneece, winner in the Virginia/Carolina region. He also says marketing is a new ball game for peanut producers and has found on-farm storage to be an advantage.
“This is a new experience,” he said. For the first time since he started farming he's selling peanuts without a quota support price and a guaranteed market. “Last year, we sold a lot of peanuts right out of the field. But we stored some and four weeks after harvest the price went up. It may not always pay to store peanuts and we don't have enough space to store all we'd like, but we like to have the option.”
Newberry says peanut farmers will have to understand the new system, which includes a marketing loan, loan deficiency payments and repayment rates. ‘It's important to retain ownership as long as possible,” to take advantage of government payments, he said. “We may also start doing some selling and shelling, where we do some of our own shelling and maximize profit potential.”
“We've never had to market peanuts in the past,” Neitsch said. “We knew we had a market and a set price for our quota peanuts and if we didn't sign a contract for additionals, we didn't grow them. Now, we have to market well if we expect to get the most for our labor.”
He said farmers who understand the marketing system and market smart would do well. Those who don't may struggle.
“Profits are not going to fall into our laps,” he said.
All three said production efficiency, already a trademark on each of their operations, becomes an absolute with program changes.
“I'm looking forward to producing peanuts under this new program,” Newberry said. “We have to develop a positive attitude about the changes and adjust. I am fortunate to live in an area where the climate and land are conducive to growing peanuts.
“Also, we have more products in our arsenal of crop protection materials than we've had in a long time.”
Newberry said he would take a “hard, cold look at seed peanuts” and evaluate the potential returns against the added costs.
“Neitsch said he'd stick closely to his four-year rotation to maintain high yields and efficiency. “We've grown peanuts on my farm for 21 years and we've crowded our rotation schedule a time or two and always paid dearly for it.”
He said minimum tillage helps reduce fuel and labor costs. It also helps protect seedling peanuts from blowing sand in the spring.
Value cover crops
“We have good soils in West Texas but we have a lot of sand and a lot of wind.” Planting in terminated wheat or old crop residue holds the soil and protects the plants, he said.
He said water remains his limiting factor. “We can't grow peanuts without irrigation. We average 15 inches of rainfall a year, so dryland peanuts are not practical.”
Kneece also likes a cover crop. “We plant wheat and terminate it in the spring. We use both strip till and minimum tillage systems. We have flat land, big fields and get a lot of blowing sand in the spring, but we can usually plant peanuts late enough to avoid damage. I also plant in old crop residue.”
Newberry saves money on fertilization. “This is the 18th crop I've grown without having to use a pre-plant fertilizer,” he said.
“We just follow soil sample recommendations,” Kneece said. “We usually add 30 units of nitrogen.”
“I've seen research that indicates we don't get a benefit from nitrogen fertilization,” Neitsch said, “but I'm afraid not to fertilize. And I see results. We apply 120 units of nitrogen, about 60 units of phosphorus and 15 to 20 units of sulfur. We believe that if we use less phosphorus the cotton crop that follows peanuts will benefit.”
The Peanut Profitability Award is an annual awards and education program sponsored by Farm Press Publications, The USDA National Peanut Research Lab and the Southern Peanut Farmers Federation.