Estimates for peanut acreage in South Carolina for 2012 range from a modest increase up to 96,000 acres, which would be a 20 percent jump from 2011.
A high percentage of the total acreage will be planted to Virginia types, which need calcium, most frequently applied as gypsum in the Palmetto state.
Throughout the winter months, rumors circulated that gypsum from Santee-Cooper, one of the state’s largest electric utilities would be in short supply and/or much more expensive than in 2011.
Lonnie Carter, CEO of Santee-Cooper, puts those rumors to rest at a recent statewide meeting of the South Carolina Peanut Board.
Santee-Cooper generates 500,000 to 800,000 tons of gypsum annually. Last year South Carolina farmers bought nearly 70,000 tons from Santee-Cooper. Demand from other industries for gypsum, which is technically synthetic gypsum, dwarfs demand from agriculture.
Carter, who grew up on a farm near Branchville, S.C., says that doesn’t mean farmers aren’t important to the huge energy company. The company CEO, whose brother grows peanuts, says gypsum from Santee-Cooper will be in good supply for 2012 and the price will be one dollar a ton more than last year.
The dollar increase, Carter explains, comes to fund a scientific study by Clemson University. The amount of money his company will receive from gypsum in 2012 will be the same as 2011, and hopefully, the research project will lead to more efficient ways to generate and collect gypsum in the future.
His company uses limestone in the electric generation process. Flue gases are scrubbed from coal-fired stations and the by-product collected is synthetic gypsum.
Used in three industries
Santee-Cooper gypsum is used in three industries: Agriculture, cement industry — the largest user of the product, and in the manufacturing of wallboard. All the gypsum generated is sold to one of these customers, Carter explains.
In agriculture, virtually all the gypsum sold is used as land-plaster in the production of peanuts. In runner and Virginia type peanuts, calcium is by far the most critical nutrient for achieving high yields and grades.
Low levels of calcium causes several serious production problems, including unfilled pods (pops), pod rot disease, poor grades, darkened spots in the seed and poor germination.
Virginia-type peanut varieties are less able to take up adequate calcium than runner and Spanish types. This may simply be a matter of pod size, since there is less surface area on larger pods per unit weight of nut.
(As newer peanut varieties have come on the market, seed size has increased and this has changed the thinking on calcium requirements for the crop. For that information, visit http://southeastfarmpress.com/peanuts/larger-seeded-peanuts-change-thinking-calcium-needs ).
For runner peanuts, the critical soil test level is 600 pounds of calcium per acre, but on Virginia type peanuts, yield and grade response occurs even at a soil test of 1,000 pounds of calcium per acre.
In 2012, contracts for Virginia type peanuts have been for $700 per ton, highest in the post-peanut program era. Capitalizing on the high prices of 2012 will be a primary goal of all peanut growers, because the temporary shortage and subsequent high prices, will likely encourage over-production and bring prices back down in 2013.
Getting calcium on the soil is critical to both yield and quality. Some of the newer varieties like GA 08V, Bailey and Sugg have high yield potential — up to 7,000 pounds per acre — but require a high level of calcium in the soil to allow for pod-fill on these high-yielding plants.
The 70 million tons of gypsum generated by Santee-Cooper won’t be enough to meet the needs of South Carolina’s peanut farmers, but it will come close.
In future years, if growth in peanut acreage continues to climb and cost of production of synthetic gypsum continues to climb, the price for calcium, regardless of the source is likely to increase.
Gypsum is a naturally occurring mineral in many parts of the United States and the world. Gypsum is also often available as a by-product material.
Gypsum is hydrated calcium sulfate. The chemical name of gypsum is calcium sulfate dihydrate. Pure gypsum contains 23.28 percent calcium (Ca) and 18.62 percent sulfur (S) in the readily available sulfate form (SO4).
Often contains impurities
However, the typical gypsum sources that are commercially available for agricultural often contain impurities which result in a Ca level between 18 percent-23 percent.
The dependence on an electric utility for a critical supply of calcium for South Carolina’s fastest growing agricultural industry shouldn’t be surprising, according to Carter.
“Farming and the energy business are intrinsically connected, which is in part due our mutual challenge to be more and more efficient,” Carter says..
“My brother, a life-long farmer, now farms what used to be six family farms with significantly fewer people than it took to run the individual farms. Our company now employs fewer people than it did 20 years ago and generates much more energy than they did back then.”
In the future, the Santee-Cooper CEO says farmers should keep an eye on the cost of natural gas to follow the availability and cost of gypsum. About 20 percent of energy generation at the South Carolina electric company comes from burning natural gas, Carter says.
Natural gas prices have steadily gone down in price. To take advantage of these low prices electric utilities are burning more natural gas and lesser amounts of coal and other energy bearing materials.
“We are burning absolutely as much natural gas as we can. The more natural gas we burn, the less coal we burn, and the less coal we burn the less gypsum we produce,” Carter says.
“It takes time to switch from coal to natural gas and vice-versa. Right now all our gas-fired generators are running and most of our coal generator burners are not running. Even if prices of natural gas jump significantly, it will take a while to convert back to running primarily coal-fired equipment, he adds.
“Right now we have plenty of gypsum to supply farmers, and farmers will always have a high priority as customers with our company.
“However, we do have minimal contracts with other industries, and we cannot let those industries shut down, because that impacts the lives of so many people,” Carter says.
“If the price of natural gas remains low in 2013, gypsum will be a highly sought after commodity and supply and demand will come into play — just like it does with any commodity.
“If I was a peanut farmer, I would definitely pay attention to natural gas prices. You don’t want to get caught in the summer time when you need gypsum and not be able to find it. If natural gas prices stay low, I recommend to farmers to buy there supply as early as they can,” Carter says.