What is in this article?:
- Cotton oversupply is a global issue, not just a problem in the U.S.
- New peanut varieties are among many technological advances that will help growers long-term, but may mean more peanuts per acre for 2013.
- Continued good prices for grain crops have ramped up pressure on peanuts and cotton to compete for acreage.
New cotton varieties with especially high yield and quality potential are available. Even non-transgenic varieties with high yield potential are available.
In terms of high quality varietal selections, 2013 will likely go down in history as offering cotton growers the overall highest quality cotton varieties in history, almost certain within the past decade or so.
Seed companies and chemical companies have invested huge amounts of money bringing new varieties and new technology for crop protection to the market place.
In some cases the market for which they developed these products in the U.S. will be less than half the size it was a scant two years ago.
If cotton has been on a wild ride the past few years, peanuts have been on the front seat of the roller coaster, with prices going up and down seemingly every year.
Speaking at a recent Georgia Farm Bureau meeting, George Lovatt, of Lovatt and Rush Peanut Brokerage described the 2013 peanut market aptly, “ugly, ugly, ugly — not many happy thoughts.”
Finding a way to cut back on acreage is not the peanut grower’s only future problem. The industry recently received a stern warning from the FDA to find ways to reduce the risk of salmonella poisoning from peanut products.
Jenny Scott, senior advisor to the director of the Office of Food Safety at the Food and Drug Administration told National Peanut Council members the FDA has a high level of concern about continuing problems with peanut butter Salmonella contamination.
She reported that the FDA is making more frequent inspections of peanut processing facilities by both state and federal food regulatory agencies.
Scott says, the agency is making greater use of environmental sampling and FDA officials are experiencing a greater willingness to use the full range of agency enforcement powers including warning letters, injunctions, suspension of registration and criminal prosecution.
When it comes to peanuts, Georgia drives the bus. If the outlook is bleak there, the rest of the peanut belt will be hard pressed to find any good news for the 2013 crop.
Like cotton, the timing of poor prices and oversupply for peanuts is bad.
Researchers across the region have made significant strides in peanut production and companies that in reality do consider peanuts to be ‘peanuts’ compared to other larger markets, have made significant progress in getting new products and new varieties into the marketplace.
Clearly, peanut growers are in a position to grow more acres of higher quality peanuts than at any time in history. The holdup is finding a place to sell their crop.
With limitations in crop insurance and major questions on government support, the risk for growing peanuts in 2013 will likely reach an all-time high.
Peanut marketing guru Tyron Spearman says peanut growers should plan to produce enough peanuts for a 5-6 month market.
Lovatt says the carryout is expected to be about 1.5 million tons, which is about 240 days worth of peanuts, which would take the market eight to nine months into the next marketing year.
Whether they need to produce half a crop or one-third of a crop will depend on a lot of things, but the bottom line is expect low prices as long as supply far exceeds demand.
The two peanut marketing specialists agree that growers should pay special attention to what shellers and buying points are saying. Cutting acreage is the easy answer, but not always a practical one for growers.
Cotton and peanuts are among the top rotational crops grown in many Southeastern states.
The pest spectrum above and below the soil is generally different, and historically cotton behind peanuts or vice-versa has produced some of the highest yields and highest quality crops of both.
Cutting back on peanut acreage and cotton acreage in the same season, for most growers means finding some other crop that will fit into the rotation — not usually an easy task.
With self-propelled peanut diggers pushing $300,000 and a new on-board, module building cotton picker twice that much, leaving equipment idle or under-used is another losing proposition for most growers.
Other grower options for getting peanut supply and demand back in order are not much easier, if any, than cutting acreage. Lovatt suggests reducing imports, which should be a no-brainer, but politically isn’t so easy.
The best options for growers is for domestic demand to increase along with exports, both of which are being pushed to the max by state and national grower organizations.
Lovatt also suggests increasing crushing and limiting seed supply for the 2013 season.
If there is a bright side to the cotton and peanut outlook for 2013, it’s that the U.S. has the most efficient infrastructure in the world for growing, processing and marketing both crops.
The level of technical expertise among growers has never been higher and demand for both crops remains good well into the future.