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Peanut Industry Must Crack Foreign Markets, Official Tells Farmers, Researchers

Posted on: Thursday, 14 July 2005, 00:00 CDT

Jul. 14--PORTSMOUTH -- In Africa, starving children fed a formula made from peanuts are surviving at a rate more than three times the rate of children fed a milk formula.

A graduate student at the University of Georgia has won an award for research on peanut consumption reducing high blood pressure.

And, worldwide, consumers still prefer American peanuts.

But peanuts grown in the United States simply aren't selling in the global market. American peanuts cost more than those raised in poorer countries, where labor, chemicals and fuel are cheaper.

And, this year, industry officials say, there are still 800,000 tons of peanuts leftover from last year's crop.

Yet, Floyd D. Gaibler, the U.S. Department of Agriculture's deputy under secretary for farm and foreign agricultural services, said Wednesday that farm income is good, and it's expected to stay that way through 2006.

But things could change, Gaibler said, as he addressed peanut farmers, buyers and researchers gathered this week at the Renaissance Portsmouth Hotel and Waterfront Conference Center for the joint convention of the National Peanut Board and American Peanut Research and Education Society.

The 2002 Farm Bill was written during a budget surplus year, he said.

That's no longer the situation.

"We're working with a rising budget deficit," Gaibler said. "Instead of having an opportunity to share in a growing pie, we have a shrinking pie."

That could mean there will be fewer agricultural subsidies in the upcoming farm bill, and the price farmers get for their peanuts, cut almost in half in 2002, could drop even more .

There has to be more emphasis on the foreign market, and new product uses need to be developed, Gaibler said.

"U.S. agriculture's greatest opportunities are outside our borders," he said.

According to Gaibler, the U.S. has lower agricultural export subsidies -- about $54.6 million a year -- than any other country except Norway, with $32 million a year. It all has to do with tariffs and trade agreements, which some farmers said are unbalanced.

"It's not a level playing field," Suffolk peanut farmer Thomas Rountree said.

Gaibler advised the farmers to reduce costs.

"We're already doing that," said Dinwiddie County farmer Billy Bain.

"The people in Washington might listen to us, but they don't respond to our requests. Have any of the trade agreements really helped the American farmer?"

At harvest time, when the market is good, many peanut farmers already have contracts on their crops. They sell to shellers, who process the peanuts and send them on to manufacturers for use in snack foods, candy and peanut butter.

If they don't sell, farmers can get a loan from the U.S. Department of Agriculture for $355 per ton. The government holds the peanuts until they are sold. Before the 2002 Farm Bill, federal subsidies valued the crop at $610 a ton.

Across the industry, agricultural officials are expecting more farmers this year to take the loan payments then forfeit their peanuts to the government. That means the government will have a lot of peanuts on its hands.

Foreign countries aren't buying U.S. peanuts because they can buy them cheaper elsewhere, said Jeff Johnson of Birdsong Peanuts, Suffolk's last peanut sheller. Once, there were more than a dozen in the city.

"Argentina has its biggest crop ever," Johnson said. "Brazil is a long-term worry. They have 200 million acres of idle land."

Virginia farmers are hoping for better days.

"I love what I do, and I want to keep doing it," Delores "Dee Dee" Darden, an Isle of Wight farmer and former chairman of the peanut board, told Gaibler.

Speaking for Virginia's peanut farmers, J. Carlton Courter III, commissioner of the Virginia Department of Agriculture, talked about the state's claims to peanut excellence.

"Our acreage is down, but we'll adapt," Courter said. "We're not the biggest, but we are the best."

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Source: The Virginian-Pilot

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