Peanut acreage up in air

Because of the uncertainty surrounding peanuts in Virginia these days, each individual farmer's decision to plant might warrant a headline. For the record, Billy Bain of Dinwiddie, Va., will plant peanuts this year. Only the acreage remains up in the air and that in itself is part of the changing peanut story in Virginia. “I think we've got at least two more years before we're going to see who's going to grow peanuts,” he says.

The forecast for peanuts in Virginia remains cloudy with a strong chance of an acreage decline in 2003. The state suffered a more than 20 percent cut in peanut acreage in 2002. (Some say the cut in peanut acreage will be more than that this year). This is in a state where, according to tradition, the first commercial peanuts were planted in the mid-1800s.

History aside, a transition brought on by an entirely different peanut program, contracts coming late in the spring, peanut acreage heading south, and farmers giving up on peanuts altogether have growers thinking long and hard about putting seed in the ground.

Sitting in his Ford truck on a recent spring day while working his cell phone and directing farm operations, the soft-spoken president of the Virginia Peanut Growers Association is finding it hard to see a time when peanuts won't be on his farm. “I will plant peanuts in 2003, but at what level I'm uncertain.” He parked his cotton picker because of low prices and a labor shortage in 2002 and will do so again in 2003.

As far as peanuts are concerned, he's unwilling to hang it up yet. (Many of his fellow peanut producers have decided otherwise.) He's worked with landowners over the winter to renegotiate agreements to last the length of the farm bill. He's also spent many hours in the Farm Service Agency (FSA) office updating base and yield. “Complying with this new farm bill has been one of the most trying issues of my 35 years of farming.”

Two years ago, Bain planted 600 acres of peanuts. Last year, he had planted 450 acres of peanuts when President Bush signed the farm bill on May 13. “When Congress passed the bill, that's when we stopped planting. This year it will be a whole lot less than that and it will depend on what kinds of contracts become available by May 15.”

To further complicate the situation, drought and tomato spotted wilt virus hammered yields last year.

In response to the 1996 farm bill, which sliced support to $610 per ton, Bain had already begun to cut costs, most notably a gradual switch to strip-till. Last year, he planted his entire peanut crop strip-till.

There's very little cost cutting that can be done beyond what's already been done, Bain points out. The issues affecting him today are ones brought on by wholesale changes in the peanut program. “I think members of Congress, as well as other peanut-growing regions are beginning to realize that the predictions of V-C growers are coming true. It's not going to be a smooth transition for peanut growers.”

Meanwhile, he sees the merit of having an alternative way to sell his peanuts. The Peanut Growers Cooperative Marketing Association (PGCMA) has been approved to act as a cooperative marketing association (CMA).

Bain has spent a lot of time at the local FSA office updating bases and yields. And he's been on the phone with landowners working out five-year agreements instead of one-year leases. In late March, he was fielding a call and working out an agreement with a landowner.

“We fought so hard to retain the old peanut program because we knew it was going to be a difficult transition,” Bain says. “Most of the landowners have understood.”

Under the new peanut program, the landowners got the buyout and the growers got the base. Bain wants to put peanuts back on the land he's farmed and sees a four-year lease giving him an opportunity to get his equity out. “That was my settlement in the new program.”

As the winter progressed, Bain and others saw peanut equipment leaving for North Carolina and South Carolina as new growers sought out what they perceived as opportunities, Bain says. “I'm somewhat surprised at the enthusiasm of new growers in lower North Carolina and South Carolina. I hope that shellers have not painted a rosy picture for these growers that will lead to disappointment.

“Here in Virginia, we have been approached about growing produce, but the growers on the Eastern Shore have grown produce for over 50 years and they're going through a lot of hardship,” Bain says. “I don't see how new peanut growers are going to survive this new program when the old growers are having such a hard time.”

He points to TSWV as one of the hurdles to cross in producing peanuts in those areas.

Growers, especially those in the V-C area, need an alternative way to market their niche Virginia-type peanuts, Bain says. He believes the PGCMA, which has been approved to act as a CMA, could fill that role. “It's a definite necessity that growers have an alternative to market their peanuts. Without an alternative, they have no choice but to accept the shellers' offer. It leaves the possibility open of a dividend coming back to the producer at the end of the year.”

Growers need to be aware of what's in the contract before signing. Important issues are tax consequences, beneficial interest and the effect of peanuts not under contract.

Throughout the winter, peanut farmers have been waiting on contracts from shellers to help them decide how many acres to grow this season. “There have not been any what I would call strong contracts,” Bain says. Shellers in the Virginia-Carolina region have offered a $500 contract for Virginia-type peanuts at an average yield of 3,000 pounds per acre. (Growers cite a reduction in insurance coverage as the reason for their cut in acreage.)

Bain considers the contract offerings “not overly impressive” considering that growers will have to forego the LDP payment and put the peanuts under loan. “I don't feel that was the intent of the farm bill.”

Last year, Bain sold 20 percent of his crop at harvest and stored 80 percent of his better-quality peanuts, which he contracted at a higher price in January. It costs about $650 per acre, excluding land, for Bain to produce peanuts. “We're talking about break-even at best.”

Asked what kind of contract he could live with, Bain said, “If the shellers are going to force peanuts under loan, then I feel like a $550 contract would be fair since the sheller will be able to receive the marketing gain. Or a $500 contract and the sheller furnish the seed.”

The reason is, yields in the V-C have evened out or declined due to disease.

In 2002, ag policy had farmers as tentative as a squirrel crossing the road. Weather and disease provided the vehicle that flattened hopes. The dry, unusually warm weather last spring led to early planting and the onslaught of TSWV. By May 10, 90 percent of the crop was planted. In late June, TSWV hit with a vengeance. (Researcher and Extension specialists at Virginia Tech and North Carolina State University have introduced a Risk Advisory to help producers minimize risk to the TSWV. The Advisory focuses on resistant varieties, planting date, higher seeding rates and insecticide use.)

Bain says he'll pay close attention to the Risk Advisory this year. He also uses the Leafspot Advisory developed in the V-C to cut spraying costs.

He plants a mix of varieties — VA 98R, NC-V 11, Perry and NC-7 — to widen the harvest window.

After the previous farm bill went into effect, Bain started experimenting with strip-tillage.

Bain saves three to four trips across the field with strip-tillage with the all-in-one process. “Hopefully that's $50 to $60 an acre. He burns down the cover crop two weeks before planting, then strip-tills and plants in single pass.

“Strip-till may require a few more herbicides, but I can save on fuel costs for this crop year,” Bain says. For the past four years, he's increased strip-till acreage. Last year, he planted all of his 450 acres to strip-till peanuts. “The year 2002 was not a good year to test strip-till, but in other years strip-till had the highest yields. Normally, strip-till yields were 3,900 to as high as 4,700 pounds per acre. My conventional peanuts average yields of 3,500 to 3,700 pounds per acre.”

Bain believes it will take another couple of years before the peanut situation will shake out. He hopes to see himself growing peanuts in the future. In the meantime, he's looking for a contract he can live with. And he's using such practices as strip-till to keep costs down. He'll stay plugged in to what's happening in Washington, D.C. and encourage other producers to do the same.

“Peanuts have been a mainstay here in Virginia,” he says. “It really bothers me to see many growers forced out of a lifelong business because of the new farm bill.”

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