Peanut industry hopes to rebound in 2010

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In farming, a record year isn’t always a good thing — as Virginia’s peanut farmers can attest.

Thanks to a record-setting national harvest in 2008, which yielded 2.57 million tons of peanuts or a 40 percent increase over 2007, contract offerings were down at planting time. Consequently, peanut farmers across the U.S. have been forced to cut back on production this year.

Virginia farmers planted a record low 12,000 acres of peanuts this year, about 50 percent of what they planted last year. They are filling their acreage gap with soybeans and cotton. “We hope it’s a one-year thing,” says Dell Cotton, executive director of the Virginia Peanut Growers Association in Franklin. “Most states did decrease their plantings this year, so that’s probably going to be good in terms of trying to get ourselves back to a fairly level rate of supply and demand.”

Peanut acreage in Virginia dropped from nearly 100,000 acres in the 1990s to 75,000 in 2002 and 30,000 acres in 2004.

According to Cotton, the decrease is a result of many peanut growers moving part of their acreage to other crops or getting out of peanut farming altogether. It’s tough to make a living with increased production in other states, competition from China and Argentina for prime export markets like Europe and the high-risk nature of peanut farming. The crop requires special equipment and an annual capital investment in fungicides and insecticides that can’t be used on other crops.

Demand for peanuts also took a hit last fall after a salmonella outbreak in a single peanut butter processing plant sharply curtailed consumer demand for a short time.

Cotton is cautiously optimistic about the future. “The farmers that are still left in peanuts want to stay in peanuts,” he says, noting that Virginia still has the infrastructure to support peanut production of about 30,000 acres a year. “If pricing and market conditions allow it, we hope to bounce back to 23,000 acres in a few years and maybe even to 30,000 acres beyond that. We’ll just have to wait and see.” 

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