M.L. Everett Jr. can't figure how the proposed peanut legislation will help him produce a crop profitably.
From his desk at his farm near Capron, Va., Everett lists the cost of producing 300 acres of peanuts. The bottom line number of $892 includes land rent, a figure that is pretty much in line with what Extension economists have listed on budgets. The other column is filled with only one figure: the $610 per ton peanut producers receives to grow peanuts under the 1996 farm bill. Figuring an average yield of 3,000 pounds per acre at 30 cents a pound, Everett would get about $900 an acre for his crop.
“That's the reason I would say the peanut program we have now has worked to cover our costs,” Everett says.
On another sheet of paper in his small notebook is the figure $480. That represents the target price under the House version of the peanut portion of the new farm bill. A decoupled payment would be added to the price of peanuts, as well as counter cyclical payments on 85 percent of the producer's base.
Still, Everett doesn't see a new farm bill doing much but harming peanut production in Virginia.
Elsewhere, in the Southeast and in west Texas, unity greeted the House version of the peanut program. Farther north in the Virginia-Carolinas, the mood is one of uncertainty.
“A new farm bill creates a lot of concern in this area,” he says. “You hear the argument that cotton, grain and some peanut farmers are pushing for the House bill to be accepted. I think the reason is in some parts of the country, grain and cotton farmers tend to benefit more from the House bill than peanut growers in this area.”
Everett Jr., his son, Lewis III and his father, Marvin Lewis Sr., represent three generations of Everett Farms Inc. in Southampton County, Va. The farming operation began with William Everett.
The area is rural; the economy is tied to agriculture.
And peanuts are one of the main crops around here that pay the bills. Producers in Virginia and North Carolina grow the ballpark peanuts known as Virginias.
As he visits with his neighbors in and around Southampton County, Everett has been asking them how they would design a farm bill.
The first priority, Everett says, is a bill that “would allow us to stay in business.”
Other issues, like a quota buyout that keeps the base controlled by producers, are secondary to raising the target price higher than $480 for producers such as Everett in the V-C region.
“Maybe the $480 would work for the Southeast, but it doesn't work for us,” Everett says. “We have CBR, web blotch and Sclerotinia to deal with.” Those diseases add about $86 an acre to production costs, he says.
If the House version were to become law, “I'm certainly going to cut my production,” Everett says, “and I might as well use the word, ‘drastic.’” Reports this fall have some farmers thinking twice about whether they will plant peanuts next year.
Everett figures that he would have to average yields of 4,000 pounds per acre to cover his costs at the $480 target price. The “up and down” soils he farms, without the benefit of irrigation, would hinder those type of yields.
Based on that fact alone, he would like to see the present peanut program continue for at least another year.
Everett sits on Virginia Farm Bureau's Peanut Advisory Committee, is a member of the Peanut Growers Cooperative Marketing Association and the Virginia Peanut Growers Association.
He sees two schools of thought regarding the situation. There are farmers who are willing to accept the change if the target price is increased. And there are those who want “to hold out for the old program just like it is now because we feel like we're keeping our production in line with demand in the V-C area,” he says. “The program has worked as a no-net cost program in our area.”
Virginia-type peanuts are a specialty crop even within the peanut industry because they are sold in-shell, Everett says. He points to flue-cured, dark-fired and burley tobacco as having different pricing structures.
“If our production costs are higher than the Southeast, then our target price should be higher for the market we're trying to grow for,” Everett says.
Despite the House passing its version of the farm bill earlier this fall, Everett sees the events of Sept. 11 holding up the eventual passage of the complete farm bill until 2002.
“I foresee next year something being passed that's very similar to the House version,” Everett says.
Personally, he hopes that the peanut program continues for another year.
As it stood in early November, Everett plans to plant 300 acres of peanuts. Two-thirds of his acreage is devoted to seed production. Over the past several years, he's taken steps to reduce costs.
For example, he follows the Rootworm Index and the Leafspot Advisory to determine treatments. “The Leafspot Advisory has saved us a pile of money,” Everett says. By treating for rootworms based on the Index, Everett has been able to cut back on 75 percent of his treated areas.
Fumigation is a standard practice on his farm. He fumigates for CBR at the same time he rips and beds the land. He even plans to try strip-till on some land this coming season.
On the weed control side, he started using Strongarm last season, in an effort to get away from “stunting” the peanuts with post-emergence herbicides, Everett says.
He's a stronger believer in research and following Extension recommendations.
So when he looks at a production budget, he pays attention. “I try to use the production budgets as a target to try to improve on,” Everett says. “I take the different columns and see how I can do it cheaper.”
Given what he sees in the House version and his own production costs, Everett says it would be difficult to operate at a loss.
It reminds Everett of what he went through several years ago, when he closed up his hog farming operation because he saw contract farming coming on.
“We would have had to do a lot of renovations, and I felt like I would lose control of my destiny,” Everett says. “We would get paid after the hogs were slaughtered, then graded by the company's employees.”
Everett admits that he's frightened at the prospect of the “contract-farming scenario,” saying he doesn't want to lose his independence.
And he wouldn't like to see peanut farming go to a contract situation.
At the $480 target price proposed in the House version, V-C producers would be hard pressed to continue to produce peanuts, Everett says.
Farmers in the area are hoping for an increase in the total monies for peanuts.
“If the right farm bill isn't passed, the economy in these farming communities around here is going to fall drastically,” Everett says.