Winners of the 2003 Peanut Profitability Awards are aggressive growers who choose not to cut corners in achieving efficiency and high yields.
“Whenever inputs are needed, these three growers don't hesitate,” says Marshall Lamb, economist with the USDA National Peanut Research Laboratory and advisor for the Farm Press Peanut Profitability Program. The awards were presented during an awards breakfast at the Southern Peanut Growers Conference in Panama City, Fla. This marks the fourth year of the awards program.
Honorees for 2003 include Mike Newberry, Arlington, Ga., Southeast Region; Roger Neitsch, Gaines County, Texas, Southwest Region; and Ricky Kneece, Pelion, S.C., Virginia-Carolina Region.
The survey completed by all nominees for the Peanut Profitability Award requires that growers lists all variable costs for their entire farm, including such things as seed and irrigation, explains Lamb.
“And then we take it one step further. We've found that it's one thing to make good returns above variable costs, but good growers also must be very efficient in the management of fixed costs. So we take an equipment inventory of the farm and the peanut enterprise.
Farm as whole
“We're able to break that down and find out how much each piece of equipment costs per acre for the peanut operation. We look at returns over total costs for the entire farm and not just one segment in one field, as in some other award programs. We look at the farm as a whole, and returns to the farm as a whole. We believe that is the only fair way of doing it,” says the economist.
Contests that look at one small section in a field can be misleading,” notes Lamb. “Farmers have a very complex job of juggling all of these variable and fixed costs throughout the year. This truly is a profitability program because we're looking at the entire farming operation,” he says.
One of the nominees for this year's award — a runner-up to the eventual winner — actually had a higher return over total costs, he says. “But the winner had lower fixed costs, and that was the result of better management of equipment costs. The deciding factor was how the nominees handled fixed costs.”
No direct or counter-cyclical payments from the new peanut program were included in the judging criteria, says Lamb. “We didn't think it would be fair to compare growers with base with those who don't have base. We looked at the current year's production and the returns to the entire peanut farm as an average over total costs.”
High yields and efficient production are seen as essentials for continued profitability in peanut production, agree the three Peanut Profitability Award winners. The honorees shared their production philosophy during a grower panel session immediately following the awards breakfast.
“We really don't have any secrets,” says Southeast winner Mike Newberry. “We're fortunate in southwest Georgia that we have a climate and land that are perfect for peanut production. That's why we've been producing them for years, and that's why we'll continue to produce peanuts.”
Newberry says he looks forward to producing peanuts under the new government program. “I can honestly tell you that I never dreamed a few years ago that I'd be sitting here with such a positive attitude about peanuts.”
Peanut farmers will have to understand the new system, he says, which includes a marketing loan, loan deficiency payments and repayment rates. “It's important to retain ownership as long as possible. We also may start doing some selling and shelling, where we do some of our own shelling and maximize profit potential,” he says.
“We now have more products in our arsenal of crop protection materials than we've had in a long time,” says Newberry. “We have an array of fungicide products, and, hopefully, they'll be priced more competitively.”
Newberry adds that in the future, he'll take a “hard, cold look at seed peanuts” and evaluate the potential returns against the added costs.
“We have to maintain yield and quality, and we have to grow a profitable crop to stay in business,” says Roger Neitsch of Gaines County, Texas.
Neitsch says he'll stick closely to his four-year rotation to maintain high yields and efficiency. “We've grown peanuts on my farm for 21 years. We've crowded our rotation schedule a time or two and always paid dearly for it.”
He says minimum-tillage helps reduce fuel and labor costs. It also helps protect seedling peanuts from blowing sand in the spring. “We have good soils in west Texas, but we have a lot of sand and a lot of wind. Planting into wheat or old crop residue holds the soil and protects the plants,” he says.
Water, says Neitsch, 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.”
Although he has seen research that indicates no benefit from nitrogen fertilization, Neitsch says he's afraid not to fertilize. “I see results. We apply 120 units of nitrogen, about 60 units of phosphorus and 15 to 20 units of sulfur.”
New to marketing
Marketing is a new aspect of peanut production, he says. “We've never had to market peanuts in the past. We knew we had a market and a set price for 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. Profits are not going to fall into our laps,” he says.
Ricky Kneece of Pelion, S.C., also favors minimum-tillage in his peanut production. “We'll plant a wheat cover crop, harrowing it in during the fall and killing it in the spring. We went completely strip-till this year and planted into old crop residue. We're trying to minimize our labor, time and equipment. This is the best looking peanut crop we've had in the past three to four years,” he says.
Kneece's cropland is characterized by large, flat fields. “We get a lot of blowing sand in the spring, but we usually can plant peanuts late enough to avoid damage.”
Good quality will help to sell peanuts, he says. “Last year, we sold a lot of peanuts right out of the field. But we stored some and the price went up four weeks after harvest. 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.”