“USDA will soon provide draft legislation for peanut mandatory price reporting to Congress. This is in response to a recommendation made by the Office of the Inspector General,” says Arthur.

One idea being discussed is whether or not peanut loans should be made on shelled peanuts, she says. “This is just an idea, with no details. We’re not trying to push it on growers, but it’s something that might be considered. Since upland cotton loans are made on ginned cotton, should peanut loans be made on shelled peanuts?”

Some advantages, she says, would include eliminating the need to convert shelled prices to farmer stock prices; allowing farmers more direct involvement in peanut marketing and pricing, which may lead to increased marketing alternatives and better planting decisions; bringing the program focus back to the needs of farmers; and possibly prompting earlier shelling/processing of peanuts.

Such a change might also lead to improved freshness of edible kernels, a possible competitive advantage for U.S. peanut exports, says Arthur, and quicker access to oil stock peanuts.

USDA, she says, does not support the continuation of the storage and handling subsidy. “Shellers cover storage and handling under most option contracts and pass the cost on to consumers. The current program provides shellers with a strong incentive to forfeit even when market prices are well above the loan rate.”

Growers might want to consider revising storage and handling benefits so they are available only to non-contracted peanuts, she says. This would reduce the risk to USDA and provide support to those producers who truly need it.

phollis@farmpress.com