Contract prices, production costs slow South Carolina peanut boom

The surge in peanut plantings in South Carolina appears to have come to a halt, at least for the moment.

The twin whammy of higher production costs and lower contract prices seems certain to keep plantings from exceeding last year’s record-high plantings of 59,000 acres.

And it is not impossible that plantings may actually decline in 2006, says Jay Chapin, Clemson University Extension peanut and small grain specialist.

“Even though the actual contract price in some cases is not that much different from last year, increased costs mean that even the same contract is worth less,” says Chapin.

The acreage offered for contract has been reduced by some buyers as well.

“We will definitely have some farmers cutting back from their 2005 acreage,” he says. “That will be partially offset by a few first-time growers and by a few existing growers who will increase from last year. But the net result will probably be some reduction.”

The rate of growth was inevitably going to slow down anyway because South Carolina is a small state, he says. “But peanuts are a great fit where we have the right combination of soil type, rotation and management skills.”

The story of peanuts in South Carolina can be read as powerful proof of the effect of the old federal supply/control programs. During the years of the peanut program, South Carolina farmers grew only about 10,000 acres of the crop.

But as soon as the planting restrictions were removed, South Carolinians’ acreage increased significantly.

As before, the upper Coastal Plain counties were the location of peanut plantings. But a different set of them now lead the charge.

Orangeburg and Calhoun counties, neither of which produced any peanuts prior to 2002, have become No. 1 and No. 2 in peanut production, accounting for 46 percent of all the peanuts produced in the state in 2005.

The peanut belt in South Carolina is a two-county-wide swath across the upper Coastal Plain, running from Georgia to North Carolina, says Chapin. Acreage in South Carolina went from about 10,000 in 2002 to 19,000 in 2003 to 33,000 in 2004 to 59,000 in 2005.

Almost all of the expansion has been on land that had never previously been in the crop, giving an undeniable positive impact on yields.

“We gain an advantage by planting on land with no history of peanuts, no question about that, but our traditional growers were also making high yields when we got good rains and a favorable harvest season” says Chapin.

Only about 20 percent of the current acreage can be irrigated.

Overwhelmingly in the last three years, the new peanut enterprises in South Carolina have been on what were basically cotton farms, with an occasional tobacco farm getting into the crop.

Peanuts are a great benefit to a cotton grower as a rotation crop. “It helps a lot in nematode and fertility management,” says Chapin.

The new peanut growers are aware of the value of rotation in keeping yields high into the future, he says. “Our growers are committed to keeping land out of any legume for a minimum of two years. Three years would be better. Either cotton or corn is a good choice.”

Last year, about two thirds of our peanuts were Virginias and one-third was runners, says Chapin. “We can grow either Virginias or runners very successfully. Which variety we plant is a matter of relative contract prices and availability of contracts (by type).”

The standard runner variety is by necessity Georgia Green, says Chapin, because of the availability of seed. The two most promising runner varieties in this state are Georgia-03L and AP-3. But seed of these two is limited.

Among Virginia varieties, the preferred is NC-V 11, he says. “We plant some Gregory’s and some VA 98R’s, and we plant Perry in situations where CBR is a problem. We would like to grow AT VC 2, but the market for that variety has been limited so far.”

There are also a very small number of farmers growing Valencias as green peanuts in North Carolina.

For 2006, Chapin’s advice to growers is to control costs to the extreme.

“With the current low contract prices and the escalating costs of production, we have to reduce inputs wherever we can,” he says. “One area to economize in is to eliminate any additives or supplements that haven’t been proven yet.

“On dryland runners, we can eliminate gypsum from the budget if soil test calcium is adequate. We also have lower-cost fungicide program options for dryland runner production.”

Inoculants are critical to new land production. The peanut plant depends upon association with Rhizobium bacteria to form root nodules to “fix” atmospheric nitrogen for use by the plant. Liquid in-furrow inoculants have been most consistent and are less likely to become clogged.

“Overall our new growers have done an excellent job of getting new land inoculated, and all of the liquid in-furrow inoculants we have tested have done an excellent job when used properly.”

Growers are advised to focus on proper application rather than trying to improve performance with extra-cost additives.

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