US. Peanut Industry

United Statt _ Departmento

Economic Research Service

Agricultural , Economic Report Number 493

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US. Peanut Industry W.C. McArthur Verner N. Grise Harry O. Doty, Jr. Duane Hacklander

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U.S. Peanut Industry, by W. C. McArthur, Verner N. Grise, Harry O. Doty, Jr., and Duane Hacklander. National Economics Division, Economic Research Service, U.S. Department of Agriculture. Agricultural Economic Report No. 493.

Abstract

The United States, with 25 percent of world peanut exports and 10 percent of world peanut production, is the leading peanut exporter and the third largest producer; only India and China produce more. U.S. production has nearly doubled since the early fifties, chiefly because of increases in yields. Most peanut consumption in the United States is for food, especially peanut butter, whereas most foreign countries use peanuts for oil. Canada is the leading importer of U.S. peanuts.

Keywords: Peanut industry, peanut production, peanut marketing, consumption, world trade, production costs, government programs.

Acknowledgments

The authors appreciate the reviews, suggestions, and contributions of Jim Johnson, Sara Short, Felix Spinelli, Leroy Rude, Milton Ericksen, and Ken Clayton (all of the Economic Research Service), Gypsy Banks, Robert H. Miller, and Dalton Ustynik (Agricultural Stabilization and Conservation Service), William Brandt (Foreign Agri- cultural Service), and Bill Miller (visiting professor from the University of Georgia). The authors also appreciate the assistance of Marie Neathery and Grace Harris in preparing this report.

Contents

ii Summary

1 Introduction

2 Peanut Use 3 Peanut Use by Type 4 Edible Peanut Uses 6 Oilseed Uses 7 Demand Relationships

7 Acreage and Production Trends 9 Production Practices and Technology

10 Costs of Production 11 Factors Affecting Production 11 Competitive Advantages

11 Raw Peanut Industry 12 First Handlers 12 Inspection and Grading 14 Shellers 14 Grower Associations 15 World Peanut Production, Use, and Trade 15 World Production 16 World Trade 17 Peanut Oil Production and Exports 17 Government Programs Affecting Peanuts 17 Early Programs 18 World War II and After 18 Food and Agriculture Act of 1977 20 Agriculture and Food Act of 1981 22 Peanut Marketing Agreement Program 23 References 24 Appendix Tables

Washington, D.C. 20250 November 1982

Summary

The United States, with 25 percent of world peanut exports and 10 percent of world peanut production, is the leading peanut exporter and the third largest producer; only India and China produce more. Canada, France, and the United Kingdom are the largest markets for U.S. peanut exports. Peanuts are the ninth most valuable cash crop grown in the United States—the 1981 crop had a farm value of just over $1 billion.

This report gives the most recent data available on the U.S. peanut industry, including peanut production, uses, trade, and Government programs (including changes in the 1981 farm bill) affecting peanut producers.

While most countries raise peanuts for oil, U.S. peanuts are raised chiefly for food. Peanut butter, practically unavailable outside the United States, accounts for nearly a fourth of the U.S. peanut crop; other food uses account for a quarter; exports for a quarter; and meal, oil, and farm losses account for the rest. U.S. peanut consumption doubled over the last 30 years, rising to nearly 2 billion pounds in 1977-79. Con- sumption rose from 6.5 pounds per person in 1950 to about 9 pounds today.

U.S. peanuts are grown on about 1.5 million acres, in rather small plots (50-acre average), concentrated in Alabama, Florida, Georgia, North Carolina, Oklahoma, Texas, and Virginia. Georgia leads all States with 43 percent of U.S. production. While the total acreage planted to peanuts has remained virtually constant since the early fifties, production has more than doubled because average yields nearly tripled.

The average peanut yield in 1981 soared to 2,668 pounds per harvested acre, compared with 898 pounds in 1950. Much of the yield increase has been due to improved varieties and improved farm practices. In particular, a new variety, Florunner, has been responsible for much of the yield increase since its introduction in the early seventies.

Until recently, U.S. peanut production was strictly regulated by Government- controlled acreage allotments and price supports. The 1981 farm bill discontinued the acreage allotments altogether but continued the two-tier price support policy first adopted in 1977 farm legislation. Now, any U.S. farmer may grow peanuts for export and peanuts for domestic oil and meal uses. Peanut production for domestic edible use is still controlled, however, and limited only to those farmers who held quotas in 1981. In addition, price supports for peanuts produced under quota (called quota peanuts) are considerably higher than those produced without quota. The volume of peanuts covered by the quota is scheduled to decline by nearly 25 percent between 1981 and 1985.

The United States grows four types of peanuts:

• Runner, 60 percent of which go into peanut butter. Kernels odd in shape and size. Dominant variety grown, accounting for 68 percent of total U.S. production. Grown mainly in Georgia, Alabama, and Florida. • Virginia, account for most of the peanuts roasted and eaten out of the shell (ballpark peanuts). Large kernels. Account for 20 percent of total U.S. production. Grown mainly in Virginia and North Carolina. •Spanish, used primarily for peanut butter, salted nuts, and confectionaries. Small kernels and higher oil content than other types. Account for 11 percent of total U.S. production. Grown mainly in Texas and Oklahoma. • Valencia, sweeter than the others, usually roasted for eating out of the shell. High quality; excellent to grow for home use. Three or more small kernels per pod. Account for about 1 percent of U.S. production. Grown mainly in New Mexico.

U.S. Peanut Industry

W. C. McArthur, Verner Grise, Harry O. Doty, Jr., Duane Hacklander

Introduction

With a 1981 farm value of over $1 billion, peanuts are the Nation's ninth largest cash crop and one of the most ver- satile: peanuts can be used for food, oil, and feed. The United States is the world's third largest peanut producer (behind only India and China) and the world's leading peanut exporter. This report gives the most recent data available on the U.S. peanut industry—peanut uses, production, and trade— and how Government programs, including modifications in the 1981 farm bill, affect peanut farmers.

Peanuts are a nutritious, high-protein food that are ready to eat with little preparation or can be eaten raw. They can be easily processed by roasting and can be ground into many food products. Most U.S. peanuts are used for food, chiefly peanut butter, while most foreign countries use peanuts chiefly for oil. U.S. peanut production and consumption for food nearly doubled over the last 30 years, although peanut acreage has remained nearly constant, at about 1.5 million acres.

«I

Peanuts are the seeds of an annual legume that grows close to the ground and bears nuts below ground (hence the term "groundnuts" in some countries). The papery pods range from about three-fourths inch to 2 inches long and usually contain two kernels, although some varieties have three or more. The kernel consists of two halves (cotyledons), and a heart (germ) enclosed in a thin skin (testa).

The original place of cultivation of the peanut (Arachis hypogaea L.) was probably South America (6).' Peanut culture spread from this hemisphere to Europe, Asia, both coasts of Africa, and the Pacific Islands. Most evi- dence indicates that the peanut was brought to the Uni- ted States from Africa by slave traders, but one can only speculate on the time and place of its introduction into this country.

An article in the 1925 Yearbook of Agriculture indicates that Thomas Jefferson spoke of peanut culture in Virginia

in M81(4). However, peanuts did not become a commercial crop of any importance until about the time of the Civil War. During the early years, production was confined largely to Virginia and North Carolina. The development of equipment for producing, harvesting, and shelling peanuts, as well as new processing techniques, contributed to expansion of the peanut industry around the turn of the century. According to the U.S. Census of Agricul- ture, total acreage increased from 398,000 acres in 1899 to 1,125,000 in 1919. Alabama and Georgia accounted for 48 percent of total U.S. acreage in 1919, the Virginia- North Carolina region had 23 percent, and Texas had 15 percent.

The increased demand for peanut oil and food during World War I contributed to increases in production during the war years. With the postwar period's emphasis on diversified farming in the South, in contrast to a system largely dependent on cotton, peanuts became a substi- tute for cotton as a cash crop.

During World War II, the demand for peanuts for oil, food, and feed induced additional expansion in production, largely through increases in the acreage planted. Food uses were mainly peanut butter, salted peanuts, and peanut candy. After the war, particularly in 1960-80, substantial production increases occurred, due largely to improvements in yield.

U.S. peanuts are grown in the Southeast (Georgia, Flor- ida, and Alabama), the Southwest (Texas and Oklahoma), and an area spanning the Virginia-North Carolina border (fig. 1). In 1981, the Southeast produced 61.2 percent of total U.S. production, the Southwest produced 14.9 percent, and Virginia-North Carolina produced 22.1 percent.

W. C. McArthur is an agricultural economist with ERS stationed at the University of Georgia, Athens. Verner N. Grise, Harry O. Doty, Jr., and Duane Hacklander are agricultural economists with ERS stationed in Washington, D.O.

italicized numbers in parentheses refer to sources cited in the References (p. 23).


Over the last 30 years, the Southeast's share of peanut production grew considerably, the Southwest's share remained relatively stable, and the Virginia-North Carol- ina share dropped significantly:^

Percentage of U.S. production

1950-52 1979-81 Southeast 51.0 61.5 Southwest 16.2 17.5 Virginia-North Carolina 31.2 18.9

Georgia leads all States in peanut production, with 42.4 percent of total U.S. production for 1979-81. Production in other States in the same period was 14.2 percent in Alabama, 11.7 percent in Texas, 11.9 percent in North Carolina, 7.0 percent in Virginia, and 5.8 percent in Okla- homa. Those six States accounted for 93 percent of the peanut production in 1979-81, and 94.1 percent of the acreage harvested.

Peanut Use

Processing of peanuts for human food usually includes the following steps after the farmer lifts them from the soil: removal of stones and other foreign matter; grading in shell; removal of shell; removal of peanuts that are shriveled, off-color, or otherwise unsatisfactory (commonly called pick-outs); and grading for size and other factors.3 In many food applications, such as making peanut butter, the skin is removed both because it imparts off-colors and because the tannin in the skin makes the product bitter. The small peanut germs or hearts (so named because of their shape) located at one end of the kernel are also frequently removed when making mild- flavored products because they impart a gray color and a

^Mississippi, New Mexico, and South Carolina also produce a small arnountof peanuts (about 2 percent in 1979-81).

^For information on the number and size of peanut-processing plants, seef9, p. 22).

Figure 1

Major Peanut Production Regions

SOUTHWEST

^VIRGINIA- NORTH

CAROLINA

SOUTHEAST

iCounties in major peanut-producing states 'averaging 1,000 acres or more of peanuts in 1979/80.

Peanut Use

bitter taste. The heart weighs about 4 percent of total kernel weight, the skin about 3 percent. In many food processes, peanuts are heated to deactivate antinutri- tional factors and spoilage enzymes. Based on 1970-74 crop averages, a ton of farmers' stock peanuts (that is, peanuts in the shell) yields about 56 percent shelled edi- bles, 19 percent oil stock (diseased, shriveled, or otherwise unsuited for edible use) and 25 percent hulls.

Peanut consumption as a food in the United States has increased greatly in recent years. On a farmers' stock basis, peanut consumption has nearly doubled over the last 30 years, ranging from an average of 1 billion pounds for the 1950-52 period to 1,954 million pounds for the 1977-79 period (table 1).

Runner peanuts have become the dominant type because of the introduction in the early seventies of a new variety called Florunner. This variety is responsible for the dramatic increase in peanut yields. Florunner peanuts vary in size and are often oddly shaped, which causes problems in size grading and in marketing for salted use. Runner peanuts are used largely for processing, with 60 percent going into peanut butter (fig. 2). About one-fifth are used in candy. Recently, the larger kernels moved into the whole nut market, and now make up nearly a fifth of the total. Runner peanuts are primarily grown in the Southeast but are becoming more prevalent in the Southwest and Virginia-North Carolina areas.

Per capita consumption also rose in the last 30 years. Consumption declined following the 1980 crop because of the short crop (due to dry weather) and the resulting higher prices (appendix table 1).

Peanut Use by Type

The four main types of peanuts grown in the United States are Runner, Virginia, Spanish, and Valencia. Each type has special characteristics that affect where it is grown and its food uses. Runners became the dominant type in 1979. Ten years earlier, the Spanish peanut was dominant.

Table 1—Peanuts used for food (3-year average)

Year Domestic food use beginning Total August 1 supply Total Per capita

—Million pounds— Pounds 1950-52 1,995 1,001 6.5 1960-62 2,093 1,268 6.9 1970-72 3,488 1,633 8.0 1977-79 4,471 1,954 9.0

Source: Fats and Oils Outlook and Situation, various issues, U.S. Department of Agriculture, Economic Research Service.

Figure 2

Use of Runner Peanuts (Percent of total edible use) 100

40

20

Peanut butter

Peanut candy

0 1960 65 70

'Salted nuts

75 80

Figure 3

Use of Virginia Peanuts (Percent of total edible use) 100

80

60

40

Salted nuts .^ ^^ ——-^

In shell ./ V

Peanut candy

1960 65

Peanut butter

70 75 80


Virginia peanuts have the-largest kernels and a red skin. Most peanuts roasted and sold in the shell are Virginia peanuts; that usage accounts for about 45 percent of all Virginia peanuts (fig. 3). When shelled, the larger kernels are sold as salted peanuts, with 24 percent going into this use. They are also used to a lesser extent in confection- ary products and peanut butter. Virginia peanuts are primarily grown in Virginia and North Carolina.

Spanish peanuts have small kernels covered with brown skin. This type is about equally divided between the three major uses: peanut butter, salted nuts, and candy (fig. 4). The Spanish peanut has a higher oil content than other types of peanuts; this is an advantage when crushing for oil. Spanish peanuts are produced primarily in the Southwest.

Valencia peanuts usually contain three or more small kernels to a pod. They are very sweet peanuts, usually roasted and sold in the shell. This type is excellent for fresh use or for boiled peanuts. Most Valencia peanuts are grown in New Mexico.

Edible Peanut Uses

Edible products and related uses constitute about half of total U.S. disappearance of peanuts. About a fourth of the peanuts are exported and the remaining fourth are crushed for oil and meal, used for seed and feed, or lost on the farm. These proportions have changed in the last

Figure 4 ^

Use of Spanish Peanuts (Percent of total edible use)

uu

80

Peanut butter

60 ;_^^-_/ ^ ^^

40 Peanut candy /^"^

rw •* ^'^ ^

Salted nuts *• — """"

20

0 1 1 1

decade primarily because of the increase in exports of edible peanuts.

Total domestic food uses of peanuts are expected to increase at a slightly faster rate than the population during the next 10 years. The average annual rate of increase is projected at 40 million pounds or about 2.5 percent per year. Peanut butter accounted for 47 percent of the domestic use of edible peanuts during the 1977-79 period, compared with 20 percent for salted peanuts and 18 percent for peanut candy (table 2).

The total amount of peanuts going into the three major uses (peanut butter, salted nuts, and candy) has increased considerably in recent years (appendix table 2). Although total consumption has increased sharply, virtually no change has occurred in the share of the total going into the major uses.

Peanut butter is by far the most important product made from peanuts in the United States, but little peanut butter is consumed outside the United States. Peanut butter must contain at least 90 percent peanuts, according to the Food and Drug Administration definition; peanut butter usually contains 2 percent salt. Other ingredients such as hydrogenated oil, emulsifiers, and antioxidants are added to stabilize peanut butter and prevent the oil from separating and rising to the top of the container during storage. Bits of peanuts are added to make chunk- style peanut butter. Numerous peanut spread-type products on the market incorporate other ingredients such as jellies, honey, dried fruit, syrups, and many kinds of

Table 2—Use of edible peanuts

Peanut use Year beginning August 1 1964-66 1970-72 1974-76 1977-79

Million pounds (shelled basis)

Peanut butter 486 558 639 663 Peanut candy 179 250 231 254 Salted peanuts 215 245 278 284 Peanut butter

sandwiches^ 22 26 22 29 Other 17 18 16 19

Total shelled 920 1,096 1,185 1,248

Cleaned in shell^ 69 88 109 151

Total 989 1,184 1,294 1,399

1960 65 70 75 80

^Peanut butter used in sandwich snacks sold commercially. ^Factors for conversion of farmers' stock to shelled peanuts for

1964-66 are as follows: 1964, 72.05 percent; 1965, 72.23 percent; 1966, 71.27 percent. For 1967 and subsequent years, a factor of 75.19 percent was used.

Source: Peanut Stocks and Processing Reports, 1964-79. U.S. Department of Agriculture, Statistical Reporting Service.

Peanut Use

flavors, both natural and synthetic. In 1979, over 85 percent of the peanuts used in making peanut butter were Runner type with Spanish and Virginia types constituting about equal parts of the remainder (fig. 5).

Peanuts used in the manufacture of peanut butter are roasted in revolving drum-type ovens. Salted peanuts, commonly called "salters," may be roasted like those used in making peanut butter; however, they usually are roasted or fried in oil. They are available in whole kernels, split kernels, or chopped nuts, either salted or unsalted. A popular product introduced in recent years is dry roasted peanuts. This product is different from regular dry roasted peanuts in that they are produced by a patented method, the details of which are proprietary information. The resulting kernels have a dull, nongreasy, ashy gray appearance, contain a much lower oil content, and are widely used as a snack item.

Another new product is partially defatted peanuts: blanched (that is, with the skin removed) whole peanuts are squeezed in a hydraulic press, which removes over 50 percent of the oil. The peanuts are soaked in brine after- wards to restore them to their original size and shape, and then deep fat fried. Partially defatted peanuts have about one-third fewer calories than regular peanuts. In 1979, over half of the peanuts used as salters were Runners, 30 percent were Virginias, and 15 percent were Spanish (fig. 6).

Peanuts are widely used as an ingredient in candies— sometimes constituting the main ingredient, as in candy bars of various kinds. They are also used for decorating or flavoring. Peanuts constitute one-third of the shelled nuts used in candies in the United States based on 7977 Census of Manufacturers (published by U.S. Dept. of Commerce). In 1980, over 60 percent of the peanuts used in candies were Runners, over 20 percent were Virginias, and 15 percent were Spanish (fig. 7).

Another growing use is fresh roasted peanuts in the shell, commonly called "ballpark peanuts." These peanuts are sold by street vendors and are commonly sold at sporting events. They can also be purchased at grocery stores.

Peanut butter sandwiches are popular snack items that can be purchased at grocery stores or from vending machines. The sandwiches are made from two small crackers, with a layer of peanut butter in between. Crackers are plain or flavored with cheese, ham, chili, or other flavors. Like many snack items, consumption of peanut butter sandwiches has increased in recent years.

Some peanuts are sold fresh for use as a vegetable. Fresh peanuts in the shell are boiled in brine water, then cooled, shelled, and served. Some fresh peanuts are canned and frozen for use as a vegetable.

Figure 5 Figure 6

Types of Peanuts Used in Peanut Butter Percent 100

Types of Peanuts Used for Salted Nuts Percent

80

60 — Virginia ^

40 — V

20

n ;^

Spanish —^ V.

Runnery^

80 1960 65 70 75 80


Increased domestic demand for edible peanuts will likely depend on population growth and increased income. Other factors that will affect domestic consumption are prices, product quality, and merchandising and promotional programs of the peanut industry. Future hikes in consumption of edible peanuts will be more difficult to achieve because of increased competition from other snack foods. To share in the growing snack food market, peanuts must be competitively priced and the peanut industry must develop new products and innovative merchandising and promotional programs.

Oilseed Uses

Besides its edible uses, the peanut is an oilseed. Peanuts are grown abroad chiefly for their oil, although peanut oil is relatively unimportant in the United States in compari- son with other edible oils. During 1977-79, peanut oil accounted for only about 1 Vi percent of total U.S. production of edible vegetable oils (appendix table 3).

When peanuts are crushed for oil, peanut meal is produced as a joint product. In the United States, peanuts are typically processed by precooking and continuous screw processing. Some may be processed by a prepress-solvent extraction process. In general, "oil stock" peanuts in the United States are peanuts that were rejected or diverted from edible channels. Diversion may be due to oversupply or a variety on hand that is not in demand. Rejections include "pick-outs" from edible nuts

Figure 7

Types of Peanuts Used in Candy Percent

80

Runner/ 60 — ^K J

■^ —^^/ V ^*^ ^^ ^ .^T

40 Spanish *^\. ^^^^^^'^^

p. J^--^^ 20

^^ Virginia \ »,

0 1 1 1 1960 65 70 75 80

on the inspection tables and other low-quality peanuts such as Segregation 3 peanuts—peanuts containing a visible toxin-producing mold. (The mold is not transferred to the oil during crushing, but remains in the meal. Unless the mold is removed from the meal, which cannot be done economically, the meal can be used only to make fertilizer, not feed.) Rejections are also peanuts that were improperly stored and became weathered (shriveled and wrinkled), infested by insects, or moldy.

Peanuts sold for export usually bring a higher return than those sold for crushing. Thus, in a given year, the volume of peanuts crushed in the United States is inversely related to peanut exports. Most U.S. exports are used as edible peanuts.

The major reason that peanuts in the United States are not grown for their oil and meal is apparent when com- paring the cost of oil and meal from peanuts with soybeans. In 1981, the cost of producing oil from peanuts was 48 cents per pound compared with 15 cents per pound for soybean oil (appendix table 4). Likewise, the cost of producing a pound of 50-percent protein peanut meal was 15 cents per pound compared with 8 cents per pound for similar protein content soybean meal.

Peanut oil is refined and used as a liquid cooking oil. Peanut oil has an advantage over most other edible vegetable oils for pan or deep fat frying because of its high smoke point, about 440° F. It can be clarified and reused many times for frying foods. Some consumers prefer it over other cooking oils because of the slightly nutlike flavor it imparts to fried foods. Refined peanul oil, like cottonseed oil, solidifies in a refrigerator. Winterizing the oil to rid it of these characteristics is difficult because it forms nonfilterable crystals. Peanut oil can be used to make other oil food products such as margarine, mayon- naise, salad dressings, and shortening. In recent years, however, its use has been mainly confined to salad dressings and cooking oil because of competition from other oils.

The market for peanut oil is changing considerably, mainly because of increased competition from expanding U.S. production of two premium oils (sunflower and corn). Sunflower oil has been displacing a large amount of peanut oil in European markets in recent years because sunflower oil is now the preferred premium oil in Europe. U.S. sunflower production has increased rapidly in recent years, reaching almost 6 million acres in 1979. Crushing facilities have not kept pace with this expansion. A large new crushing plant that started operating in October 1980 raised sunflower crush capacity by one- third. Three additional large sunflower crushing plants being built are expected to be ready for operation in

Acreage and Production Trends

1982. A large increase in corn sweeteners (liquid sugar) and corn alcohol (for gasohol) production is also under- way. Corn oil is a byproduct of both of these expanding industries. Both sunflower and corn oils are premium grade oils with certain advantages over peanut oil for a number of uses. Therefore, high peanut oil prices relative to other premium oils are not expected to occur in the future.

In 1979/80, the United States crushed 571 million pounds of farmers' stock peanuts yielding 175 million pounds of crude oil (appendix table 1). In 1980/81, the total dropped to 446 million pounds of farmers' stock peanuts due to the drought-shortened crop. The United States is an exporter of peanut oil; however, the leading peanut oil exporters are Argentina and Brazil.

Peanut meal, a byproduct of peanut-crushing operations, is marketed as a livestock feed on a 50-percent protein basis. Practically all U.S. peanut meal is sold domesti- cally for animal feed. Peanut meal is relatively unimportant as a high-protein feed in the United States, accounting for only about 0.5 percent of total production of all high-protein meal in 1977-79 (appendix table 3). Leading world exporters of peanut meal are India, Senegal, Brazil, Argentina, and Sudan.

Peanuts must be crushed under sanitary conditions if the peanut meal is to be used as a starting material for manufacturing peanut food protein products. Such products are produced in only limited amounts. Both fat containing and defatted peanut grits, meals, and flours can be produced. Grits, meals, and flour are made by the same process and differ only in the degree of final grind- ing. Partially defatted peanut flour is made from meal resulting from hydraulic pressing of blanched peanuts. Defatted peanut flour is made by prepressing peanuts and then subjecting the material to hexane extraction producing 60-percent protein flour. One manufacturer has produced small quantities of defatted peanut flour. Peanut flour can be used in a large number of foods such as bakery products, cereals, meat patties, snack foods, and other food protein uses. Peanut protein concentrates may also be prepared by subjecting peanut flour to alcohol and acid washes to remove sugars, flavor, and bitter compounds. Peanut protein concentrates contain 60 to 70 percent protein. Peanut protein isolate can also be prepared. Peanut flour is solubilized in alkali, and the protein is then precipitated with acid to produce a 90- percent peanut protein isolate.

Demand Relationships

The demand for edible peanuts is inelastic, meaning that if prices rise by x percent, the quantity demanded will decline by less than x percent. However, the degree of

price inelasticity for edible peanuts is not known. In contrast, the demand for peanut oil and meal is elastic except for a small quantity of peanut oil.

There is a specialized market for small quantities of peanut oil where the quantity demanded is fairly unresponsive to price changes. Once this demand is fulfilled and peanut oil starts competing as one of many vegetable oils, the quantity demanded becomes very responsive to price. When the specialized market demand for peanut oil is fulfilled, peanut and other vegetable oils become essentially interchangeable.

Another important factor in the peanut oil market is that its specialized oil market (the inelastic segment where quantity demanded is unresponsive to price) is changing and becoming more elastic. The cause for this change is the much greater production and increased competition from two premium oils—sunflower and corn—which have certain advantages over peanut oil in some uses. This situation is shrinking the specialized market for peanut oil. Sunflower oil has largely displaced peanut oil in some European countries. There has been little change in the domestic market, but more competition is expected over the next several years.

Peanut meal constitutes only a minor part of the high- protein meal market in the United States. There is no specialized market for peanut meal. Peanut meal prices are slightly lower than soybean meal prices because the amino acid value (feeding value) of peanut meal is not as high as soybean meal.

Peanut oil and meal do not effectively compete with soybean oil and meal (appendix table 3). Because of this factor, future growth is much more dependent on the demand for peanuts for edible uses.


U.S. peanut acreage reached 3.5 million harvested acres in 1943 in response to increased needs for peanuts during World War II. This record acreage was nearly three times that harvested in the early thirties and more than double current acreages.

U.S. acreage harvested

1929-31 1939-41 1942 1943 1944 1949-51 1959-61 1969-71 1979-81

1,258,000 1,953,000 3,355,000 3,528,000 3,068,000 2,184,000 1,430,000 1,457,000 1,471,000


Peanut acreage remained relatively high during the for- ties, but dropped sharply in the early fifties to more nearly reflect demand. The harvested acreage has remained at about 1.5 million acres since 1954 when the Government set a national minimum peanut allotment of 1.61 million acres (appendix table 5).

While the peanut acreage has remained relatively stable since the midfifties, production has increased almost continuously (fig. 8, table 3). The 1980 drop in production resulted largely from unfavorable v\/eather; 1981 output rebounded and surpassed the 1979 level (appendix table 6). The gains in total production are attributed to rapidly increasing yields.

Peanut yields have increased sharply since the early fifties due largely to Improvements in seed varieties and cultural practices (table 4 and fig. 9). For example, the U.S. average yield increased almost threefold from1950 to 1981 (898 pounds per acre to 2,668 pounds—appendix table?).

The Southeast led all regions in yield increases, gaining 1,746 pounds per acre from 1950-52 to 1979-81. During the same period, yield increases amounted to 1,162 pounds in the Southwest and 898 pounds in the Virginia- North Carolina region.

Runner peanuts dominate U.S. production, accounting for about 68 percent of total production in 1977. Runners also had the highest yield per acre in most areas (appendix table 8). Spanish peanuts are grown mostly in the Southwest; Texas and Oklahoma accounted for about 94 percent of the total Spanish peanut production in 1977.

Figure 8

Peanut Acreage and Production Million acres Billion pounds 4.0

3.5

3.0

2.5

2.0

1.5

1.0

0

New Florunner . variety introduced\ I

Production (Farmers' stock)/]

La

Acres harvested for nuts

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0 1950- 1955

60 65 70 75 80

The Virginia peanut dominates production in the Virginia- North Carolina region. Valencia peanuts are grown primarily in New Mexico and Arizona.

The average peanut acreage per farm operating unit was about 52 acres, according to the 1978 Census of Agricul- ture."* Average peanut acreage varied from 90 acres per farm in Texas to 31 acres per farm in Florida (appendix table 9).

Many farm operating units combine more than one poundage quota—or combined more than one acreage allotment when allotments were in effect. (Beginning in 1982, the peanut acreage allotments were discontinued; only poundage quotas remain.) A poundage quota speci- fies the quantity of peanuts a producer can sell at a guaranteed quota loan price. Allotments were acreage con- straints on production, used in conjunction with price supports to provide stability in supply and prices. Quotas are assigned to specific farms. More than one quota can be combined on an operating unit through ownership, rental, and leasing arrangements. The average size of allotment was about 30 acres in 1980, but varied from 17 acres in North Carolina to 46.6 acres in Texas (appendix table 10).

'Ân operating unit is defined as all the land and quota operated by an individual or group as a single farming operation.

Table 3—Regional peanut production (3-year average)

Calendar year Region 1950-52 1960-62 1970-72 1979-81

Million pounds

Southeast 863 Southwest 275 Virginia-North Carolina 529

839 378 535

1,737 2,103 644 604 646 649

Table 4—Average peanut yields, by region (3-year average)

Calendar year

Region 1950-52 1960-62 1970-72 1979-81

Pounds per acre

Southeast 874 Southwest 491 Virginia-North Carolina 1,487

U.S. average 889

1,170 929

1,910 1,256

2,278 2.620 1,546 1,653 2,463 2,385 2,100 2,324

Source: U.S. Department of Agriculture. Crop Production. Various issues.


The range in allotment size was large (appendix table 11). Eighteen percent of the allotments in the United States accounted for 58 percent of the total U.S. acreage allotment in 1976. These allotments all exceeded 40 acres. About 24 percent of the allotments ranged from 10 to 20 acres, while 38 percent of the allotments were 10 acres or less.

Production Practices and Technology

Most peanut growers use the same production practices with some variations from one region to another because of differences in climate, soil, topography, and economic forces.

Preplant tillage covers all tillage operations performed before seedbed preparation. The chief types of tillage operations include breaking the land with moldboard plows and disking with a tandem disk. Other equipment used on many farms for preplant tillage includes chisel plows, spike tooth or spring harrows, subsoilers, and rototillers. Farmers in Texas and Oklahoma commonly use bedders and listers.

Other preplant operations involve applying fertilizers and herbicides. Broadcast application of fertilizer, including lime, with a truck or trailer is the dominant method in all areas. Applying fertilizer with fertilizer attachments on planters or tillage equipment is also common. Herbicides are usually applied during disking, where the herbicide is applied and incorporated in the soil in one operation.

Growers of irrigated peanuts in Texas and Oklahoma used preplant tillage operations most frequently, according to a 1977 survey of peanut producers (appendix table 12). The least number of tillage operations occurred on nonirrigated peanuts in Oklahoma.

Planting is done mostly during April in the Southeast and during May in the Virginia-North Carolina and Southwest regions. A well-prepared seedbed is essential in peanut production. Most producers use four-row planting equipment. A small part of the acreage is replanted each year, depending largely on weather conditions at planting time. Seeding rates vary among regions, ranging from about 60 pounds per acre for nonirrigated peanuts in Texas to 120 pounds per acre in Georgia. Seeding rates are also affected by row spacing and the variety of peanut.

Weed and pest control is obtained chiefly through chemicals applied from tractor-mounted sprayers. Custom application is widely practiced. Mechanical weed control is common if weeds survive the chemical treatment. This practice varies markedly among regions, ranging from

one to two cultivations in the Virginia-North Carolina region to about three cultivations in the Southwest (appendix table 12).

States differ widely in the number of pesticide applications. The 1977 survey found that Texas growers applied chemicals for insect and disease control about 1.6 times per season while North Carolina growers applied chemicals about 9.2 times per season.

Irrigation is a common practice in the Southwest. Although less common in the Southeast, irrigation of peanuts has been gaining in use in recent years. Little irrigation is used in the Virginia-North Carolina regions.

In Oklahoma, the side-roll and hand-move systems are dominant for peanut irrigation. The cable-tow and center-pivot systems are the next most common methods of irrigating peanuts in Oklahoma. The side-roll, hand- move, and center-pivot systems dominate in Texas. In Alabama and Georgia, irrigation water is applied largely by cable-tow systems. The next most common method is by center-pivot system.

Harvesting commences in August in the Southeast, and involves digging peanuts with either a digger-shaker machine or a digger-shaker-inverter. This operation includes digging peanuts from the ground, shaking to remove soil from the pods, and placing the plants in a

Figure 9

Peanut Yields by Region Pounds per harvested acre

1950 55 60 75 79 81


windrow. The digger-shaker-inverter inverts the plant, leaving pods exposed upright above the ground to facili- tate natural drying. Vine cutters are used in a few cases, particularly in peanut fields where weeds or foliage are a problem. Reshaking (shaking the vines again to remove more dirt from the pods) is common in some areas, but less important in others.

All peanuts now are combined directly from the windrow. The combine lifts the plants from the windrow, separates the pods from the vines and trash, and deposits the pods in a bulk bin on the combine. The peanuts are then dumped in a trailer or truck and hauled immediately to a drying facility—either an on-farm drying installation or a commercial dryer. Moisture content must be reduced to 8-10 percent for proper storage.

Table 5—U.S. average cost of producing peanuts, 1978-81

Item 1978 1979 1980 1981

Dollars per unit

Cost per planted acre: Variable^ Machinery ownership^ Farm overhead^ Management'' Land charge^

Total cost

Cost per pound: Total cost Value of secondary

product Net unit cost

Yield per planted acre

271.27 54.76

7.22 34.36 93.81

461.42

.177

.005

.172

298.47 62.49

7.99 36.90

102.49 508.34

.197

.006

.191

320.24 71.65 7.42

39.93 95.84

535.08

.357

447.37 88.85 8.12

54.43 122.99 721.76

.275

.006

.351

Pounds

2,602 2,587 1,526

.006

.269

2,628

Note: See appendix tables 13-18 for more detailed cost items. ^Variable costs include seed, fertilizer, chemicals, fuel and

lubricants, repairs, custom operations, labor, drying and cleaning, and interest.

^Machinery ownership costs include charges for replacement, interest, taxes, and insurance.

^Farm overhead includes cost of such items as utilities,• recordkeeping, farm insurance, general farm maintenance or other items that cannot be allocated to a specific enterprise.

^Management charge amounts to 10 percent of total cost minus the land charge.

^Land charge reflects a composite of land allocation at average of share rent, cash rent, and a charge based on acquisition value of owner-operator land.

Source; U.S. Senate Committee on Agriculture, Nutrition, and Forestry. Cost of Producing Selected Crops in the United States. Committee Prints.

Costs of Production

Peanut production costs increased substantially during 1978-81. The most significant increase occurred in machinery ownership costs, which more than doubled. The total U.S. average cost of producing peanuts rose from $461.42 per acre in 1978 to $721.76 per acre in 1981 (table 5). Variable costs accounted for 59 percent of total costs in 1978 compared with 62 percent in 1981. In contrast, the land charge amounted to about 20 percent of total costs in 1978 and about 17 percent in 1981.

Chemicals, including fertilizer, lime, and gypsum, accounted for about 29 percent of total variable costs in 1981 (appendix table 13). Although constituting a smaller proportion of total variable costs, energy cost increases were most dramatic of all, increasing from $22.01 per acre in 1978 to $49.10 in 1981. Peanut seed and labor costs also increased sharply. The cost increases resulted largely from substantial gains in the prices of production inputs rather than significant changes in the mix of inputs.

Peanut production costs differ greatly by region (table 6). Per acre costs were highest in the Southeast for 1978-81, and lowest in the Southwest (appendix table 14). In contrast, costs per pound of peanuts harvested were generally lowest in the Southeast and highest in the Southwest because of the regional differences in average yields (appendix table 15).

The input mix varies among regions because of differences in the production environment and input requirements. For example, chemical costs per acre for peanut production were substantially higher for the Southeast than for other regions during 1978-81 (appendix tables 16-18). This difference is largely due to a preponderance of pest control problems in the Southeast. Other com- ponents of cost also vary from region to region but the variation is less marked than for chemical inputs.

Table 6—Regional production costs, 1978-81 average

Item Southeast Southwest Virginia-

North Carolina

Variable Other^ Total, excluding

land

Yield

0.146 .046

.192

2,708

Dollars per pound

0.173 .086

.258

Pounds per acre

1,510

0.147 .049

.196

2,463

includes machinery ownership, farm overhead, and management charges.

10

Raw Peanut Industry

Factors Affecting Production

Total production for a State or region depends on the yield per acre and the acreage planted to peanuts. Sev- eral factors affect yield response, including soil texture, cultural practices, peanut varieties, and climate (rainfall, temperature, and length of growing season).

Peanuts are best adapted to well-drained, light-textured soils. Soil texture affects not only yields but pod loss during harvest. Pod loss and damage tend to be greatest on heavy-textured soils. Methods of seedbed preparation and pest control are important in peanut culture. The use of poorly prepared seedbeds or inadequate pest control measures can substantially reduce yields as well as product quality.

Peanuts are sensitive to other crops in a rotation. Work- ing peanuts into a well-planned crop rotation improves control of diseases and nematodes as well as nutrient balance in the soil. Peanuts are effective users of residual fertilizer in the soil from the last crop, particularly crops like corn that receive heavy applications of fertilizer. Pro- duction specialists generally recommend a 3-year rotation for peanuts, which restricts production to one year out of three on the same iand. Generally, production improves most following corn, small grains, or sod in a rotation.

Significant changes in acreage depend on marketing quota and price support programs, competition from other crops for the use of land and other resources, and the quantity of land available that responds well to peanut production. The acreage planted to peanuts has remained essentially constant during the last 30 years because of acreage allotments and the high price support levels compared with other crops. In the absence of production controls (the acreage allotments discontinued in 1982), peanut acreage might rise in southwest Georgia and sections of Florida, which have cost and soil advantages. Market conditions and agronomic restraints will now be the major limits on production increases.

Competitive Advantages

The high price supports for edible peanuts assure farmers of greater returns than they can currently get on most other crops. The farm price of peanuts for the edible market has been determined in most years by price support loan rates for quota peanuts.

Breakeven price analysis can be used to determine equivalent returns from peanuts and other crops, given the production cost and yield levels. Table 7 indicates the price combinations required to provide equivalent returns from peanuts and soybeans in the Southeast based on average costs and yields for the 1978-81 period.

When priced at 16.1 cents per pound, peanuts in the South- east region provided returns above variable costs equivalent to returns from soybeans priced at $7 per bushel. While this soybean price is slightly above the season- average price received by farmers in 1981, the breakeven peanut price of 16.1 cents per pound is substantially below 1981 loan rates (22.5 cents per pound) for quota peanuts. Raising the price of soybeans to $8 per bushel would require a peanut price of 19.3 cents per pound to equate returns from the two crops. The 19.3 cents per pound for peanuts is still well below the 1981 loan rate for quota peanuts. Equivalent returns based on the 1981 loan rate for quota peanuts would require the unlikely soybean price of $15 per bushel. Thus, these price relationships show peanuts' strong competitive advantage over soybeans under the cost and yield relationships that prevailed during the 1978-81 period.

Raw Peanut Industry

The peanut industry involves six physical stages- production, drying, shelling, storage or warehousing, processing, and distribution. The raw peanut industry encompasses the first four stages.

Before 1982, legislation prescribed a minimum national allotment of 1.6 million acres. The national allotment was allocated to peanut-producing States, which in turn allocated the State allotments to individual farms. In 1980, 55,126 farms had an acreage allotment for peanuts. Over three-fourths of the producers were located in four major peanut-producing States. Georgia led all States in the proportion of peanut farms and share of the national allotment (table 8).

Table 7—Breakeven price of peanuts and soybeans, Southeast

Assumed price Breakeven price of peanuts of soybeans Shortrun^ Longrun^

Dollars per bushel Cents per pound

53 14.5 16.9 6^ 15.3 17.7 7 16.1 18.5 8 16.9 19.3

10 18.5 20.9 15 22.5

1

24.9

^Shortrun breakeven prices equate returns above variable costs.

^Longrun breakeven prices equate returns above variable, machinery ownership, and overhead costs.

^Soybeans would not be produced in the long run at these prices, since returns would be negative.

11


Under the 1977-81 peanut program, each farm having an acreage allotment also received a poundage quota each year. Many of these same farms are eligible for poundage quotas under the 1982 peanut program. Quota peanuts are eligible for price support payments at the quota level (27.5 cents per pound in 1982). "Additional" peanuts (that is, peanuts over and above the quota) are eligible for price support at a lower level (10 cents per pound in 1982).

First Handlers

Peanuts are moved from the farm to buying points or stations following harvest. Located near concentrations of production, the buying stations are operated largely by shellers, independent dealers, or warehouse owners. Services provided by these first handlers of peanuts include drying, cleaning, purchasing outright or making arrangements for price support loans from the Commodity Credit Corporation (CCC), and warehousing of peanuts going into the CCC loan program. The number of buying points or stations in 1981 in each State was (according to USDA's Food Safety and Quality Service):^

Number of buying points

Table 8—Peanut farms with allotments, by State, 1980

Alabama Florida Georgia

North Carolina Virginia

Texas Oklahoma Other States^

55 10

160

170 72

74 33 11

'Arizona, Arkansas, Louisiana, Mississippi, New Mexico, and South Carolina.

Drying (curing) begins immediately after the peanuts are lifted from the.soil. A digger-shaker-inverter—the most commonly used implement to dig peanuts—lifts peanut plants from the soil and places them in a windrow with the pods exposed. Some natural curing occurs while the peanuts remain in windrows before being combined. Weather conditions generally do not allow the peanuts to be completely dried in windrows. Consequently, nearly all peanuts are artificially dried with mechanical dryers either on the farm or at commercial drying facilities. A drying system includes bins or wagons, fans, a heat source, and controls for temperature and airflow.

The moisture content of peanut pods when they are dug up may be as much as 45 to 50 percent. Drying in windrows generally reduces the moisture level to 18 to 24

States Percentage of allotted acres to U.S. total

Percentage of peanut farms'

Percent

Georgia Texas Alabama North Carolina Oklahoma

32.9 22.1 13.4 10.4 8.6

31.0 13.9 15.0 17.9

7.1 Virginia Other States

6.5 6.1

8.2 6.9

'Reflects number of farms growing peanuts after release and transfer of allotments.

percent. Peanuts normally remain in windrows for 1 to 3 days before being combined. After being combined, they are dried mechanically, further reducing moisture content to 8 to 10 percent for safe storage.

The commercial drying facilities are located at buying points and are usually operated by the first handlers.

Inspection and Grading

Farmers' stock peanuts are inspected and graded at the location of the first handler to establish the quality of product available to the buyer. The overall quality of the shelled product determines the price for commercial sales and for price support loans.

The inspection and grading services are provided by the Agricultural Marketing Service, which assigns inspectors to each buying point during the harvest season. Peanuts placed in storage must be cleaned when foreign material (dirt, vines or "hay," sticks, stones, insects, broken shells, and so forth) exceeds 10 percent. Peanuts are usually cleaned shortly after the drying operation.

The peanut price support program and the peanut marketing agreement program require the separation of peanuts into three classes: Segregation 1, Segregation 2, and Segregation 3. These classifications are mainly concerned with the amount and type of damage in each lot of peanuts. Peanut handlers (shellers regulated by the marketing agreement program) can buy only Segregation 1 peanuts for use in edible products. Quality factors determined in the inspection and grading process are:

^For additional detail, see (9, p. 6).

12

Figure 10

Growing, Handling, and Marketing Peanuts

Virginia—Carolina Growers • Virginia and runner peanuts • 18% of U.S. production • 18% of U.S. peanut acreage allotment

Southeast Growers • Mostly runner peanuts • 62% of U.S. production • 51% of U.S. peanut acreage allotment

Seed Companies • Function as first handler • May take delivery of peanuts

in addition to seed products • Seed peanuts are counted

against quota peanuts

On Farm Drying

Southwest Growers • Spanish peanuts, increasing amounts

of runner peanuts; Valencias in New Mexico • 20% of U.S. production • 31% of U.S. peanut acreage allotment

First Handler—Buying Point • Removes all foreign material and dry • Segregates peanuts with A. flavus mold

precursor of aflatoxin and sends to crusher • Makes commercial purchases and

accepts for CGC loans • Takes delivery of contracted

"additional" peanuts • May warehouse, send to warehouse

or send to sheller

Broker • Contact point for buying

and selling offers

Roaster (in-shell)

Edible Product Processor • Quota peanuts • "Additional" peanuts resold

from COG for edible uses at prices equal to or greater than quota loan rate

• Segregation 1 peanuts

Grower Associations • Work with first handlers to keep records of

quota and "additional" peanuts, and arrange warehousing for CGG loan peanuts

• Draw drafts on GGG to pay growers directly or through first handler

• Operate CGC price support loan system • Resell CGG loan peanuts back to shellers • Administer loan pools and pay pool

dividends to growers • Arrange for toll crushing • Cannot sell directly to export market

T TT

Shelter • May be the first handler—receives, cleans,

dries and after inspection and grading purchases for commercial use or accepts for CGC loan

• Screens in-shell peanuts, shells, stores or ships to buyer

• Buys loan peanuts from CGC for commercial use—quota or "additional"

• Shelled peanuts stored under cold storage • Runs chemical analysis before shipping

domestic edible peanuts • Most shellers belong to Peanut Administra-

tive, Committee, which regulates quality

Retail Ball park peanuts (in shell)

Retail • Peanut butter • Salted nuts • Candy • Peanut butter

sandwiches and others

Crusher • "Additional" contract

peanuts • "Additional" peanuts resold

from CGC • Segregation 2 and 3 peanuts • Crushing stock

Peanuts with A. flavus mold

I Export Shelled . • "Additionals ' contracted I • Quota peanuts at prices I

above quota loan • "Additionals" at CGC resale |

price

Export for Crush • Fragmented by sheller • Price equal to or greater

than "additional" loan plus all costs

J_

Crush—Restricted • Monitored by grower associations

to dispose of surplus peanuts • Price is less than "additional"

loan plus costs • Toll crush—CGC arranges crush

and takes possession of oil

Fertilizer Meal • No restrictions

Oil Restricted to domestic use

CO

— — — — • Business and Administration Arrangements ■ Peanut Flows


sound mature kernels (SMK), sound splits (SS), other kernels (OK), loose shelled kernels (LSK), damaged kernels (DK), foreign material (FM), and kernel moisture content. These quality factors are used for establishing price support loan levels for batches of farmers' stock peanuts.

The following factors determine the segregation class of peanuts (17):

Segregation 1 includes all farmers' stock peanuts with: 1. Less than 2.5 percent damaged kernels. 2. Not more than 1 percent concealed damage

caused by rancidity, mold, or decay, or 0.5 percent freeze damage for peanuts placed in CGC loan.

3. No visible A. Flavus mold. 4. Foreign material: Commercial—no limit; CCC

loan—cannot exceed 10 percent unless bought back.

5. If a lot has an offensive odor, the peanuts must not be sour, fermented, or taste affected.

Segregation 2 includes all farmers' stock peanuts with: 1. 2.5 percent or more damaged kernels. 2. More than 1 percent concealed damage caused by

rancidity, mold, or decay (RMD kernels) and/or more than 0.5 percent freeze damage for peanuts placed in CCC loan.

3. No visible A. Flavus mold. 4. Foreign material: Commercial—no limit; CCC

loan—cannot exceed 10 percent if stored.

Segregation 3 includes all farmers' stock peanuts with: 1. Visible A. Flavus mold. Peanuts with any amount

of A. Flavus mold will go into this segregation group regardless of the percentage of damaged kernels or whether offensive odor is found in the load.

2. Foreign material: Commercial—no limit; CCC loan—percentage of foreign material and moisture to be specified by grower associations (described below).

Shellers

In 1981, there were 115 shelling plants in the major production regions. Most of the plants were in the Southeast.^ The shelling operation includes basically five steps: (1) passing farmers' stock peanuts through cleaning machines to remove sand, stones, sticks, or

other foreign material, (2) passing cleaned peanuts through a battery of shellers or separators that separate kernels from pods, (3) moving the shelled nuts over sizing screens that separate the nuts into four groups or classes (sound mature kernels, sound split kernels, damaged kernels, and other kernels), (4) moving the edible nuts over picking tables for inspection and removal of rejects, and (5) filling and weighing containers (generally burlap bags or heavy cardboard containers) for storage or shipment to a processing plant. Shelled peanuts are usually placed in cold storage warehouses. The shellers provide docks for receiving and shipping by rail or truck as well as storage space for farmers' stock and shelled peanuts.

In addition to the shelling operation, shellers perform both commercial market and CCC functions. Shellers sell edible peanuts to processors and also bid on CCC loan peanuts for crushing and export. Most sales between shellers and processors are arranged by brokers although some sales are direct.

Grower Associations

The peanut price support program is carried out primarily through nonrecourse warehouse-storage loans to approved grower associations. Each region is served by a growers' association. They include: (1) Peanut Growers Cooperative Marketing Association, Franklin, Va.; (2) GFA Peanut Association, Camilla, Ga.; and (3) Southwestern Peanut Growers Association, Gorman, Tex. These are cooperative associations acting for peanut growers. The grower associations serve both as an agent of the Commodity Credit Corporation (CCC) and as an agent for the growers. They serve as a clearinghouse for all transactions involved in the price support program. They issue price support loans to any peanut grower who wants a loan. Their operating budgets must be approved each year by the Agricultural Stabilization and Conservation Service (ASCS). The operating budget covers administration and supervision costs and loan outlays. If the loan activities deviate from expected levels, the operating budgets can be adjusted accordingly to assure, within reason, that the associations can cover their costs.

A grower normally takes harvested peanuts to one of about 525 buying points. Each buying point that has

^Based on information obtained from the Southeastern Peanut Association, the Virginia-Carolina Peanut Shellers Association, and the Southwestern Peanut Shellers Association. For more information, see (9, p. 15).

14

World Peanut Production, Use, and Trade

signed a contract with the area grower association has authority to offer price support loans. While peanuts taken under loan are mixed with commercial peanuts purchased by the buying company, the loan peanuts are still owned and controlled by the area growers' association as security for the growers' loan advances. Peanuts placed under loan are sold by the association or the CCC and must be moved out of the warehouse by June 30.

The growers' associations sell the peanuts pledged against loans to users at prices that are not less than the total of any costs incurred in handling plus either 105 percent of the quota loan if purchased before December 31 or 107 percent of the quota loan if purchased on or after January 1.

The CCC enters the picture about January 1 (even earlier if the quantities of peanuts under loan are large). It offers quota peanuts for sale on the export market for at least 100 percent of the quota loan rate plus storage and other costs to CCC, and any additional peanuts (produced above the quota limit) at a predetermined sales price that is less than the quota loan price but substantially above the loan rate for additional peanuts. The area growers' associations are not permitted to make export sales. Starting about March 1 of each year and depending on the strength of the export market, CCC begins offering quota and additional peanuts to the crushing market at the highest price it can obtain. If CCC and the growers' associations are unable to sell the peanuts at loan plus handling costs, the peanuts are diverted from edible channels and "toll" crushed (payment to the crusher is with oil and meal from peanuts crushed). The oil and meal are sold at whatever price the market will offer. Oil sold in this way is restricted to domestic use. It is necessary to have the loan peanuts committed to the market by about May 15 in order to clear the warehouse by June 30.'

The growers' associations operate pools to keep track of profits made on the handling of CCC loan peanuts. Pools are set up by peanut area, by type of peanut, by quota and additional peanuts, and by segregation category. In 1979, there were 8 pools in the Virginia- North Carolina production area, 15 pools in the Southeast, and 28 in the Southwest. The number of pools varies from year to year depending on the quality of the crop and the types of peanuts under loan in each area. Peanuts from CCC stocks of additional peanuts that are sold for domestic edible uses are flagged to offset any losses CCC has incurred on quota peanuts.

At the end of the crop year, the CCC balances its books with the area growers' associations on the loan

operations. If the peanuts are redeemed at prices that exceed the loan rates and cover all allowable costs so that a surplus remains for a given pool, the surplus is returned to the associations for distribution as dividends to those growers who had peanuts under loan in that pool.

World Peanut Production, Use, and Trade

Peanuts are grown in many parts of the world. The major use of peanuts produced in the United States is for edible products like peanut butter, peanut candy, and salted nuts. The major use of peanuts grown in the rest of the world is for oil.

World production of peanuts has increased since the late sixties, but at only a moderate rate:

1967/68-1969/70 1971/72-1973/74 1974/75-1976/77 1977/78-1979/80

Metric tons 12,286,000 12,600,000 13,372,000 13,017,000

World production totaled about 12 million metric tons in the late sixties but rose to an average of 13 million metric tons in the late seventies. Even though world production of peanuts has risen only moderately since 1967, changes have occurred in world trade. The United States has increased its share of the world peanut trade. Changes in the domestic peanut program as provided in the 1977 and 1981 agricultural acts have enabled U.S. farmers to produce peanuts for sale in world markets at competitive prices.

World Production

The United States is the third largest peanut-producing country in the world; only India and China produce more peanuts (appendix table 19). The United States contributed about 11 percent of total world peanut production in 1979/80, and only a slightly lower proportion in previous years (however, the drought- reduced crop of 1980 dropped U.S. production to 7 percent of the world total).

India, the leading peanut-producing country in the world, has accounted for 30 percent or more of total world production since the 1977/78 season (appendix table 19). China (PRC), the second largest peanut-producing country in the world, had 17 percent of the total in 1979/80. Sudan, Indonesia, and Senegal followed the

Tor information on CGC sales, see (8, p. 4).

15


United States in total production for 1979/80. Those six leading countries accounted for about three-fourths of total world production in 1979/80.

Peanut production in the United States rose steadily from 822,000 metric tons in 1967 to 1.35 million metric tons in 1979—a 64-percent increase. During this period, total world production rose by less than 5 percent. Peanut production in many countries, including India and PRC, varies from year to year. Production in African nations such as Senegal, South Africa, and Sudan varies more than in other countries, possibly because of more extreme weather variations. Production in Nigeria and Thailand appears to be declining, while production in India and China appears to be gradually rising.

World Trade

The United States has emerged as the leading peanut exporter in the world. During the late seventies, U.S. peanut exports exceeded 25 percent of U.S. total peanut production compared with the 5 to 6 percent of total world production that were exported.

The U.S. share of total world exports rose from 31 percent to 50 percent from 1972 to 1979 before the drought-reduced 1980 crop dropped U.S. exports again to about 25 percent of total world exports (table 9).

Table 9—World peanut exports

Average for periods shown

1968/69- 1972/73- 1975/76- 1978/79- Country 1970/71 1974/75 1977/78 1979/80

1,000 metric tons

Argentina 1 1 23 86 Brazil 34 53 22 25 China 38 33 24 31 India 34 59 82 20 Senegal 141 19 76 47 South Africa 68 79 40 44 Sudan 79 164 269 37 United States 47 224 254 374

Percent

U.S. share of world exports 4 31 31 50

Except for the 1980/81 marketing season when the U.S. peanut crop was 42 percent smaller than that of a year earlier, the United States generally increased exports while several countries reduced exports during the 1972/73-1980/81 time period (appendix table 20). Brazil, India, Senegal, South Africa, and Sudan reduced their exports. In 1980/81, PRC and India increased exports because of expanded domestic production and a lucrative world market, primarily due to the shortfall in U.S. production. The PRC shipped 70,000 metric tons to the United States, and India shipped 25,000 metric tons in 1980/81 when the United States changed its import limitation for 1 year.

U.S. peanuts have become more competitive in world markets in recent years because the world price has increased more rapidly than the U.S. price and because U.S. peanuts are of high quality, particularly for edible uses. Peanut prices are being bid up in the world market because of several factors, including poor growing conditions in other parts of the world, government export quotas and problems in producing peanuts of export quality in India, the push in China to increase the consumption of edible oils, and an increasing world demand for edible peanuts. At the same time, the United States took steps to become more competitive in world peanut trade. The Food and Agriculture Act of 1977 changed the U.S. peanut price support program to a two- price system that permitted U.S. peanuts to become competitive in world trade. The act included provisions for lower support levels for peanuts entering world trade, thus, strengthening the U.S. position in export markets as a means of increasing demand for U.S. peanuts, particularly edible peanuts. These provisions were continued in the Agriculture and Food Act of 1981.

Canada, the leading single-country import market for U.S. peanuts, imported 60 percent of its average yearly supply from the United States in 1967-69 (appendix table 21). The amount from U.S. imports increased to 74 percent by 1977/78, totaling 48,252 metric tons.

While Canada imported about 50 percent of all U.S. peanuts going Into export markets in 1969-71, the Canadian share of U.S. exports of shelled peanuts dropped to 15 percent of U.S. exports for the 1978/79 period (appendix table 22).^ France and the United Kingdom experienced marked increases in their share of U.S. peanut imports during the seventies.

^Less than 1,000 metric tons. 8For information on the U.S. share of imports of edible

peanuts, see (7, p.11).

16

Government Programs Affecting Peanuts

Japan ranks as a growing market for U.S. shelled peanuts. From 1967/68 to 1977/78 U.S. exports to Japan increased from less than 1,000 metric tons to 25,000 metric tons. The Japanese Government controls imports of raw peanuts through a system of authorized firms and import quotas for large (Virginia) and small (Spanish) kernels. Imports of in-shell peanuts from the United States have been prohibited under Japan's plant quarantine law.

Peanut Oil Production and Exports

World peanut oil production has been about 3 million metric tons for the last 9 marketing years (appendix table 24). This follows an annual growth rate of about 2.5 percent in the sixties. India, PRC, and Sudan were the leading peanut oil producers in the last 2 marketing years (1979/80 and 1980/81). Oil production varies from year to year in many countries depending on demand for peanuts in other uses as well as for oil. Production of oil appears to be rising in India and Sudan. However, oil production appears to be declining in Argentina, Senegal, and the United States. The United States contributes a relatively small proportion of world peanut oil production—2 to 6 percent per year during the last 9 marketing years (1972/73-1980/81).

World peanut oil exports have averaged about 14 percent of world peanut oil production in the last 9 marketing years. During these years, the leading oil exporters were Argentina, Brazil, and Senegal (appendix table 25).^ South Africa and Sudan appear to be increasing their oil exports while Senegal may be reducing its exports of oil. U.S. oil exports have varied considerably in the last 9 marketing years, ranging from 2 to 17 percent of world peanut oil exports.

Major markets for U.S. peanut oil in 1977/78 were Canada, the Netherlands, and Dominican Republic (appendix table 23). In years past, the United Kingdom, West Germany, and Belgium-Luxembourg were also important importers of U.S. peanut oil.

The importance of peanut oil in the total world production of edible vegetable oils declined from 13 percent to 8 percent of the total during the seventies (appendix table 26). During that time, the U.S. share of world peanut oil production moved upward, reaching close to 5 percent of the world's total from 1972/73 to 1979/80—up from 3 percent in 1969/70 and 1 percent in 1961/62. Peanut meal also has declined in relative importance as a source of high-protein meal by dropping from 8.5 percent of total world protein production in 1969/70 to 5 percent in 1980/81.

Government Programs Affecting Peanuts^°

The U.S. Congress has established a number of programs since the early thirties to support and stabilize farm prices and income, and adjust production to market needs for certain basic commodities. While the programs have varied from one period to another, several key features have remained in place through the years, including marketing quotas, price supports, and acreage allotments (allotments were eliminated in the Agriculture and Food Act of 1981).

Early Programs

The failure of the Agricultural Marketing Act of 1929 and earlier programs to stabilize farm prices led to enactment of the Agricultural Adjustment Act of 1933. The aim of this legislation was to bolster the prices of certain basic commodities in surplus supply. Under the act, farmers could take land out of production in return for benefit payments financed largely by processing taxes on the commodities.

Peanuts came under production control and diversion provisions of the act after being designated as a basic crop in April 1934. The program included contracts with peanut growers obligating them to plant not over 90 percent of the 1933 or 1934 planted acreage or the average acreage for those 2 years. The contract provided benefit payments for diverting peanuts into crushing for oil and meal. The program was successful in diverting 154 million pounds (farmers' stock) of the 1934 crop into oil and meal, and reducing the 1935 crop by 1 percent.

In January 1936, the Supreme Court (Hoosac-Mills deci- sion) declared the production control features of the 1933 act unconstitutional, and also voided the provisions on processing taxes. Thus, the programs involving contracts between the Federal Government and individual farmers, and financed by processing taxes, were terminated. Con- gress then enacted the Soil Conservation and Domestic Allotment Act. This 1936 legislation authorized payments to farmers for voluntarily shifting acreage from soil- depleting surplus crops into soil-conserving legumes and hays. Peanuts were designated as a soil-depleting crop under this act.

In 1937, four regional growers' associations were organ- ized to participate in the peanut diversion programs. The associations were reduced to three, the current number, in 1940. The associations were authorized to buy up to a certain quantity of peanuts at prices established by the U.S. Department of Agriculture. Storage costs and losses

9For information on the world price of peanut oil, see f8, p. 11 ). ôSummarized from (5, 11).

17


on surplus peanuts diverted to crushing were absorbed by the Department. This program was continued through 1940 with payments made only to growers who voluntarily participated in the conservation phase of the program. However, this voluntary program was ineffective in reducing production because of acreage expansion by nonparticipants.

World War 11 and After

The Agricultural Adjustment Act of 1938 was amended in April 1941 to authorize marketing quotas for peanuts and to reestablish peanuts as a basic crop. This act, as amended, made price supports mandatory for peanuts at 50 to 75 percent of parity. Peanut marketing quotas were also approved for the 1941-43 crops in a grower referen- dum with penalties provided for noncompliance.

When the United States entered World War II, the penalties for nonconipliance were not applied because of the increased demand for oil, food, and feed from peanuts. Likewise, acreage allotments and marketing quotas were not imposed for the period 1943-48. Consequently, U.S. peanut acreage expanded from a 1938-41 average of 1.9 million acres to 3.4 million acres during the 1943-48 period. The Commodity Credit Corporation was the only authorized ourchaser of farmers' stock peanuts from 1943 to 1946. In December 1946, the grower associations resumed purchasing operations.

To insure growers a share in the profit from defense contracts and to provide an incentive for wartime production, legislation raising loan rates up to 85 percent of parity was approved in May 1941 for selected crops; peanuts were added to the list of selected crops in December 1941. Eligibility for the higher loan rate further required producer approval of marketing quotas for those crops and extended the increased loan rates through the 1946 crop year.

The 85 percent of parity loan rates were also"extended to certain nonbasic commodities, including peanuts for oil, under the Steagall Amendment (approved July 1941). The support rate was further increased to 90 percent of parity for peanuts and peanuts for oil by an amendment to the Emergency Price Control Act of 1942 (approved Oct. 1942). This level of support remained in effect for 2 years after the end of the war.

Price support rates were scheduled to revert to prewar parity levels upon expiration of wartime price supports on December 31, 1948. However, the Agricultural Act of 1948 continued mandatory price support at 90 percent of parity through 1949. Peanuts for oil were supported at 60 percent of parity.

The Agricultural Act of 1949 set support levels for basic commodities at 90 percent of parity for 1950 and between 80 and 90 percent for 1951. Producers were to receive price supports only if acreage allotments and marketing quotas were in effect. For 1952 and succeeding crop years, cooperating producers of basic commodities were to receive support prices at levels varying from 75 to 90 percent of parity with the specific level depending on supply.

With the outbreak of the Korean war in 1950, the Secre- tary of Agriculture used the national security provision of the 1949 act to keep price support levels for peanuts at 88 percent of parity. The support rate for peanuts was raised to 90 percent for the 1952-55 crops. From 1955 to 1977, the support price for peanuts varied between 75 and 86 percent of parity. The rate remained at the legal minimum of 75 percent from 1970 to 1977 (appendix table 27).

Marketing quotas and acreage allotments have been in effect for peanuts since 1949. Originally, the quotas were set above U.S. domestic needs to help alleviate the world food shortage. The national allotments were lowered each year from 1949 until 1954 when the legal minimum (established in 1941) of 1.61 million acres was reached. Short crops in 1955 and 1956 caused allotments to increase slightly for 1956 and 1957. Until they were discontinued in 1982, the allotments remained at the legal minimum except for some increases for types of peanuts in short supply, primarily Valencias.^^

In December 1967, legislation authorized the sale or lease of acreage allotments for the 1968 and 1969 crop years; these transfer provisions were made permanent by a 1969 law. The sale and lease of allotments were restricted to the same county.

Food and Agriculture Act of 1977^2

During deliberations on the 1977 farm legislation, the peanut program was a major issue because of surplus peanut production and the mounting costs to the Government. The peanut program had been essentially unchanged since 1949. The minimum legal allotment had been in effect since the 1957 crop and prices had been supported between 75 and 90 percent of parity. These profitable and stable conditions influenced rapid techno-

^To protect the domestic peanut price support program, the U.S. government has since 1953 set an annual import quota of 1,709,000 pounds (shelled basis). Some peanut products and peanut butter are not covered. Section 22 of the Agricultural Adjustment Act of 1933, as amended, is the authority. During the shortfall in domestic production in 1954 and 1980, larger quantities of peanuts were imported under emergency quotas.

^^Summarized from (21, pp. 29-33).

18


logical advancement in peanut production. The national average yield increased by about 2.5 times between 1957 and 1977. Domestic use increased at a slower rate leading to a surplus domestic supply. The peanut program was faced with mounting Government costs. Since peanut producers had become dependent on the old program, a new program was envisioned as a transition for bringing production into line with demand with minimal economic hardship to peanut producers.

The 1977 legislation authorized a two-price poundage quota program with declining minimum quota levels for 1978-81 peanut crops. The minimum national poundage quota was set at 1.68 million tons for 1978. The peanut program allowed this quota to be lowered by 5 percent each year. The Secretary could raise the quota to meet domestic needs and provide for a reasonable carryover. The national poundage quota was to be announced by the Secretary before December 1 of each year.

The minimum poundage quota level was reduced to the legal minimum in each year reaching 1.44 million tons in 1981. Nevertheless, the quota level continued to exceed domestic edible use plus a reasonable carryover. The acreage allotment was increased by 4,000 acres in New Mexico because of a short supply of Valencia peanuts. Thus, the new minimum allotment acreage became 1.614 million acres.

Each allotment holder was given a poundage quota based on past production. The quota peanuts were eligible for the higher of the two price supports. The minimum quota support was set at $420 per ton. Quota peanuts were supported at the minimum level of $420 per ton for the 1978 and 1979 crops. The support was set at $455 per ton for the 1980 and 1981 crops.

Peanuts produced in excess of the quota level, but on the grower's allotted acres, had a lower price support level and were referred to as additional peanuts. The Secretary was required to announce the support level for additional peanuts by February 15 of each year based on demand for crush and expected world market conditions. Additi- onal peanuts were supported at $250 per ton for the 1978, 1980, and 1981 crops and at $300 per ton for the 1979 crop. There was no statutory date for announcing the quota loan rate, but it was usually announced at about the same time as the loan rate for additional peanuts. Undermarketings (sales below quota) of quota peanuts could be carried forward to the next year provided the grower had planted sufficient acreage to produce his/her quota. The total of the marketing carryforward could not exceed 10 percent of the quota on a national basis, but a grower's carryforward was not limited unless the national maximum had been reached.

The realized net losses to the Commodity Credit Corpo- ration from the program fluctuated from nearly $18 million for the 1978 crop to $45-50 million for the 1979 crop. These losses were well below the record losses of over $100 million realized for the 1974 and 1975 crops when peanuts were prohibited from being sold below support levels. The losses for the 1977 crop of $10 million were relatively low because average yield was down and export of U.S. peanuts increased greatly when India withdrew from the peanut export market. Exports of in- shell peanuts increased from 783 million pounds in 1976/77 to 1,025 million pounds in 1977/78. The losses increased for the 1978 crop as the domestic crush of surplus peanuts increased from 225 million pounds of in- shell peanuts for the 1977 crop to 309 million pounds in 1978. The average yield in 1978 increased by 182 pounds per acre, while the harvested acreage remained essentially the same. The increase in production was slightly offset when in-shell peanut exports rose to an alltime high of 1,141 million pounds.

Even though the poundage quota was reduced by 5 percent for the 1979 crop, losses to the Commodity Credit Corporation were more than double the 1978 losses. Increased domestic use more than offset the increase in marketings; however, the domestic crush of loan surplus peanuts increased by about 125 million pounds because both exports and domestic crush of quota peanuts fell from year-earlier levels.

Before the legislative change in 1977, the minimum peanut acreage allotment in combination with an increasing price support level and increasing yields caused Government costs to escalate. When the Government changed the support mechanism to a two-price system, producers were no longer eligible to receive the high quota loan support on all that could be produced on their acreage allotments. Production above the poundage quota had a lower level of guaranteed support. If the support level for additional peanuts were to set the market value, then it was apparent that some producers could probably make better use of their cropland, over and above the land required to produce for the poundage quota, by switching to another crop. Part of the total peanut allotment acreage would not be used for peanuts in this case. While the returns for additional peanuts have not been as high as for quota peanuts, a strong export market since 1977 has kept the returns for most additional peanuts at favorable levels in relation to other crops. As a result, there was little switching of peanut allotment acreage to alternative crops.

Although the additional loan rate was to be set relative to expected crushing value of peanuts, some additional peanuts from the 1979 crop were crushed at a value below the additional loan rate. These peanuts are

19


referred to as restricted crush and the resulting peanut oil cannot be exported because the Commodity Credit Cor- poration (CCC) cannot subsidize peanut and peanut oil exports due to rules under the General Agreement on Tariffs and Trade. This restricted crush has been limited to Spanish peanuts, suggesting that the price differentials of Spanish relative to other types of peanuts may be out of line. Spanish peanuts face strong competition from Runner peanuts in the domestic market and other Span- ish peanuts in the world market. If the price differential for Spanish peanuts had been adjusted to eliminate or minimize restricted crush, the profitability of raising Spanish peanuts, especially as additional peanuts, might have declined enough that acreage would have been taken out of production.

Agriculture and Food Act of 1981

The Agriculture and Food Act of 1981 further modifies provisions of the peanut price support program that prevailed under the 1977 act. The new legislation continues steps begun in 1977 to bring peanut production for domestic edible uses in balance with market needs. The 1981 act continues the two-tier price support program that prevailed from 1978 to 1981. It also retains poundage quotas but eliminates acreage allotments. A major change now allows any farmer in the United States to grow and market peanuts whether the farm has a poundage quota or not. This legislation extends price supports through the 1985 crop.

Poundage Quotas. The minimum national poundage quota was reduced from 1.44 million tons in 1981 to 1.2 million tons in 1982. The national quota will be dropped further to 1.17 million tons in 1983. 1.13 million tons in 1984, and 1.1 million tons in 1985. The percentage reductions in the annual peanut poundage quota are to be shared equally among States.

To obtain a poundage quota for a farm in 1982-85, the farm must have had a quota assigned to it in 1981. How- ever, individual farm quotas will not be reduced by equal percentages among all quotaholders. Some farms that had quotas assigned to them previously could lose the quotas or have them reduced while others may retain the same poundage quota they had in 1981. The legislation gives the Secretary of Agriculture authority (insofar as it is practicable, fair, and equitable) to lower individual farm quotas on the basis of three priority classifications. The highest priority group for quota reductions includes quotaholders who lack sufficient tillable cropland to produce the quota. The next highest priority group includes farms with quotas that were not used in previous years. The third priority is quota leased out and grown on a farm other than the one to which the quota is assigned. Farm quota reductions will be computed so that their sum will not exceed the national quota.

Under the new legislation, unused quota may be carried forward within prescribed limits. However, unused quota cannot be carried forward from the 1979 and prior marketing years. A maximum carryforward of 10 percent is permitted in the national quota although individual farm quotas carried forward can be greater if the national quota is not reached. Quotas carried forward are not counted against the national poundage quota for the marketing year involved.

Owner and operator sale and lease of poundage quotas are permitted within county boundaries. In States with less than 10,000 pounds of quota in 1981, cross-county sale and lease are also permitted. The farm leasing in the quota must have sufficient tillable cropland to produce, under normal conditions, both its own poundage quota and the quota transferred.

Price Support for Quota Peanuts. Price supports will be offered on quota peanuts in the same manner as provided under the 1977 legislation. The price support for quota peanuts within the farm poundage quota has been set at not less than $550 per ton for 1982—up from $455 per ton in 1981 and the $420 per ton minimum prescribed in the 1977 act. Annual increases in the quota support level will be permitted beginning in 1983 to reflect hikes in production costs, excluding any increase in the cost of land. However, the increase is limited to 6 percent for each annual adjustment. No adjustment may be made for inspection, handling, or storage costs when setting the support price.

A minimum CCC resale price will likely be continued for quota peanuts. Under this program, the CCC will not sell any of the quota stocks for export below the support level.

Additional Peanuts. Additional or nonquota peanuts may be grown by anyone, both quotaholders and nonquotaholders. These peanuts will continue to be marketed in essentially the same manner as under the 1977 legislation. However, contracts (price and quantity agreements between buyers and sellers) for growing additional peanuts must be submitted to USDA or the area association, if so designated, before April 15, and not June 15 as required by previous legislation.

The support price for additional peanuts will be set to avoid any net cost to the Government. The basis for the support rate continues to be the demand for peanut oil and meal, expected prices for other vegetable oils and protein meals, and the demand for peanuts in foreign markets.

Implications. The peanut portion of the Agriculture and Food Act of 1981 lowers the 1981 poundage quota by

20


nearly a fourth by 1985 in a series of annual reductions. Despite steady increases in domestic food use of peanuts and reduction in poundage quotas, the authorized reductions in the 1977 peanut program were not sufficient to bring the supply and use of quota edible peanuts into balance with market needs by 1981. The surplus of quota peanuts was 155,000 tons in 1978, and 145,000 tons in 1979. Because of drought, peanut production was much lower in 1980. The quota reductions required in the 1981 Act are expected to bring domestic edible peanut consumption more nearly in line with the national quota. This balance should help minimize the Government cost of operating the peanut program.

Acreage allotments have been eliminated. Any farmers in the United States may now produce peanuts for the domestic nonedible market and for the export market (both edible and nonedible), but not for the domestic edible market unless they have a poundage quota. This should increase competition and lower the cost of producing additional peanuts. However, the potential for increased demand for U.S. peanuts is limited. Although other U.S. oilseeds have played a major role in supplying a rapidly expanding foreign market for vegetable oils and high-protein feedstuffs, peanuts have not been a significant part of this market. Exports of sunflower seeds increased from 337,000 metric tons in 1976/77 to 2.1 million metric tons in 1981/82. For most years since 1976/77, exports have exceeded 70 percent of our domestic production of sunflowers. Exports of soybeans and products continue to expand, and in 1980/81 accounted for 55 percent of our domestic production of soybeans. Unless peanut yields increase substantially so that the cost of producing oil and meal declines significantly, it is unlikely that peanuts will share in this market. There is greater potential for increasing edible peanut exports.

The price support for additional peanuts is considerably lower than the support rate for quota peanuts. The price received for additional peanuts depends on the strength of the export market and the quantity of additional peanuts grown. It is expected that both quotaholders and nonquotaholders will actively seek contracts with handlers that establish prices above their expected production costs.

The minimum price support for quota peanuts was increased by over 30 percent for the 1982 crop with further hikes permitted in 1983-85. At the same time, the national quota will be reduced. Quota reductions are tar- geted primarily for quotaholders who have not been actively engaged in peanut production. Therefore, growers who leased quota in 1981 may find less quota available for lease in 1982 and beyond, particularly in view of the possibility that active growers may retain the same owned quota as in 1981. Together with the hike in quota

support rates, the smaller availability of quotas for lease may result in increased lease rates in 1982-85. However, contract and expected open market prices for additional peanuts, together with production costs, determine the lease rate level.

The higher support prices under the 1981 peanut program will tend to keep costs of peanut foods higher than they might be otherwise. On the other hand, incentives to produce are enhanced and American consumers have greater assurance of adequate production for domestic edible uses.

One of the arguments made for high price-support and quota-type programs relates to the inelastic price demand for peanuts. This means that the quantity of edible peanuts consumed will change proportionately less than a given change in price. This economic relationship coupled with a policy of higher price supports is sufficient to allow peanut producers to continue to increase revenue, at least in the short run. Thus, producers prefer accepting reduced quotas with higher price supports rather than increased quotas with reduced price supports.

Policies to restrict supplies, when applied over the long run in an effort to stabilize an agricultural industry, face some problems. First, production from other nations cannot be limited by our domestic policies. If the country with the most efficient agriculture follows a production- limiting policy, it supports and encourages competitive producers in other countries (in many cases, producers who could not compete under another kind of policy).

Second, competition from other products cannot be controlled. Foreign and domestic competition is encouraged. Unless competing products have parallel policies, markets are lost.

Third, supply-restriction programs with assured prices higher than market-clearing levels tend to encourage new technology and higher yields. Better management, more intensive farming, and better varieties make this possible. That is what happened in the U.S. peanut industry after 1950—peanut yields nearly tripled, rising from 898 pounds per acre in 1950 to 2,654 pounds in 1981.

Fourth, long-term supply-restriction policies assume either that consumers have no voice in the matter, or that they support the policy. Since consumers have an increasingly important voice in farm policy, they question the benefits of price support programs, contending that high price supports and production restrictions result in higher than necessary food prices. Their concerns are voiced by a myriad of consumer groups generally pressing for legislation emphasizing an adequate food supply

21


at stable prices. These groups may be more effective at legislation than are farm groups because consumers out- number farmers in most legislators' constituency.

The trade-offs between the benefits and disadvantages of price support programs in agriculture will be increasingly debated. Both farmers and consumers will want to evalu- ate the long-term effects, both beneficial and negative, of price support programs.

Peanut Marketing Agreement Program

The Federal peanut marketing agreement program has been in effect since 1965 to control the quality of domes- tically produced peanuts. It was initiated at the request of the industry to prevent peanuts with aflatoxin (a mold) from being used in edible products.

Practically all U.S. peanut handlers (shellers) have signed a marketing agreement contract with the Secretary of

Agriculture. This program is administered jointly by an 18-member (9 handlers and 9 growers) industry group (Peanut Administrative Committee) and USDA's Agricul- tural Marketing Service. The program provides incoming and outgoing quality regulations on all peanuts that handlers purchase for commercial uses. Incoming regulations allow the handlers to acquire only Segregation 1 peanuts for milling and ultimate use in edible outlets. The outgoing regulations, applied after peanuts are milled, require all milled peanuts to meet specific quality factors and be chemically analyzed. Peanuts that fail to meet the requirements are not allowed to be used in edible products.

The marketing agreement program also provides indemnification to handlers who suffer losses when chemical analysis determines a batch of peanuts to be unwhole- some and not suitable for edible use. All indemnification costs are paid by assessments levied on the handlers and by an insurance policy. No Government expenses are involved.

22

References

References 1. Ames, Glenn C. W. Peanuts: Domestic, World Pro-

duction and Trade. The University of Georgia Col- lege of Agriculture Experiment Stations, Res. Report. 215. Athens. Oct. 1975.

2. Garley, D. H. Estimation of Economic Relationsliips in tine U.S. Peanut Economy. The University of Geor- gia College of Agriculture Experiment Stations, Res. Bull. 212, Athens. Feb. 1978.

3. Clay, Harold J., and Paul M. Williams. Marketing Peanuts and Peanut Products. U.S. Dept. of Agr., Agr. Mkt. Service, Misc. Publ. No. 416. Sept. 1941.

10. National Fertilizer Association. "The Peanut—The Unpredictable Legume." Symposium. Washington, D.C.1951.

11. Rasmussen, W. D., and G. L. Baker. Price Support and Adjustment Programs from 1933 Through 1978, AIB-424. U.S. Dept. of Agr., Econ. Stat. Coop. Ser- vice. Feb. 1979.

12. U.S. Department of Agriculture. Agricultural Statis- tics. Various issues.

13. -Statistical Reporting Service. Crop Pro- duction. Annual issues, 1950-81.

Corbett, L. C, and others. "Fruit and Vegetable Pro- duction." Yearbook of Agriculture, 1925. U.S. Dept. of Agr. 1925.

14. .Agricultural Stabilization and Con- servation Service. Farm Commodity and Related Programs, AH-345. March 1976.

5. Freeman, Billy G. "An Economic Analysis of Peanut 15. Production in the Southeast and Southwest Regions of the United States Under Alternative Government Programs." Ph.D. diss. Texas A&M University, Col- 16. lege Station. 1972.

6. Mammons, Ray O. Peanuts: Culture and Uses. Amer- ican Peanut Research and Education Association, 17. Inc. Yoakum, Tex. 1973.

. Economic Research Service. Fats and Oils Situation. Various issues.

. Economics and Statistics Service. "Pea- nuts: Background Information and Program Alterna- tives." ESS Staff Report. Feb. 1981.

Food Safety and Quality Service. Farmers' Stock Peanuts: Inspection Instructions. 1981.

7. Miller, Bill R. Peanut Policy Issues for the 1981 Farm Bill: The Export Market. The University of Georgia College of Agriculture Experiment Stations, Special Publication No. 11, Athens. Feb. 1981.

18. Foreign Agricultural Service. Foreign Agriculture Circular, FOP 8, April 1980; FOP 17, Oct. 1981.

8. Peanut Policy Issues for the 1981 Farm Bill: The Role of the Commodity Credit Corporation in Peanut Oil Markets and Agricultural Policy. The University of Georgia College of Agriculture Experi- ment Stations, Special Publication No. 12, Athens. March 1981.

9. Peanut Policy Issues for the 1981 Farm

19.

Bill: Market Power and Price Discovery. The Univer- sity of Georgia College of Agriculture Experiment Stations, Special Publication No. 15, Athens. July 1981.

.Statistical Reporting Service. Peanut Stocks and Processing Reports. 1964-79.

20. U.S. Senate Committee on Agriculture, Nutrition, and Forestry. Costs of Producing Selected Crops in the United States, Committee Prints. 1978-81.

21. Walter, Alan S. "The New Peanut Program." Fats and Oils Situation, U.S. Dept. of Agr., Econ. Res. Service. Oct. 1977.

23

Appendix table 1—Peanut supply, disappearance, and price (United States, farmers' stock basis)

Supply Disappearance Prirp Year

beginning August 1 Production

Beginning stocks Total

Exports and

Crushed for

Seed. feed._ farm loss

Domestic food use Received by Civilian

Imports August 1 supply shipments oil & shrinkage Military Total Per capita farmers Support

Million pounds- Pounds —Cent s/lb.—

1950 2,035 1 187 2.222 69 629 211 14 967 6.4 10.9 10.8 1951 1,659 1 382 1,991 8 432 120 10 1.005 6.6 10.4 11.5 1952 1,356 1 416 1,772 3 195 144 10 998 6.4 10.9 12.0 1953 1,574 1 422 1,996 239 303 151 10 1,007 6.4 11.1 11.9 1954 1,008 180 286 1.474 9 107 130 7 1.012 6.3 12.2 12.2 1955 1,548 5 209 1,762 6 257 157 1 954 5.8 11.7 12.2 1956 1,607 5 387 1.999 102 260 152 3 1.026 6.1 11.2 11.4 1957 1,436 2 456 1.894 48 239 162 3 1.081 6.4 10.4 11.1 1958 1,814 2 361 2.177 62 335 170 8 1.088 6.2 10.6 10.66 1959 ^1,523 1 514 2,038 72 292 96 3 1.151 6.5 9.6 9.68

1960 1,718 1 424 2,142 81 362 87 8 1.236 6.9 10.0 10.06 1961 1,657 3 368 2,028 34 256 84 7 1,258 6.9 10.9 11.05 1962 1,719 2 389 2.110 43 302 75 8 1,285 6.9 11.0 11.07 1963 1,942 2 397 2.341 97 380 107 5 1,342 7.1 11.2 11.20 1964 2,099 2 410 2.511 179 473 75 8 1.403 7.4 11.2 11.20 19653 2,384 1 373 2.758 238 517 137 14 1.431 7.4 11.4 11.20 1966 2,410 2 412 2.824 222 587 211 2 1,418 7.3 11.3 11.35 1967 2,473 2 ^372 2.847 198 644 156 3 1,493 7.6 11.4 11.35 1968 2.343 2 353 2,898 105 654 243 3 1.536 7.7 11.9 12.01 1969 2.529 1 357 2.888 140 581 237 3 1.574 7.8 12.3 12.38

1970 2.979 2 353 3,334 290 799 209 3 1,580 7.8 12.8 12.75 1971 3.005 2 453 3.460 552 814 79 1.623 7.9 13.6 13.42 1972 3.275 2 392 3,669 521 850 175 1.694 8.2 14.5 14.25 1973 3.474 1 429 3,904 709 683 119 1.840 8.8 16.2 16.42 1974 3.668 1 553 4,222 740 590 -54 1.800 8.5 17.9 18.3 1975 3,897 1 1,146 4,993 434 1,447 193 1,859 8.7 19.6 19.7 1976 3,739 1 1,060 4,800 783 1,108 513 1,789 8.4 20.0 20.7 1977 3,726 1 608 4,336 1,025 487 392 1,838 8.5 21.0 21.5 1978 3,952 1 581 4,534 1,141 527 284 1,996 8.5 21.1 ^21.0 1979 3,968 1 586 4.555 1,057 571 271 2,028 9.2 20.6 ^21.0

1980 2,308 402 628 3,337 503 446 328 1,647 7.4 25.1 ^22.75 198r 3,985 82 413 4,364 750 615 299 2,000 6 26.7 ^22.75

^Less than 500,000 pounds. ^Beginning with 1959 crop, production reported on net weight basis (i.e., excluding foreign matter) Prior years were gross weiaht ^Begmnmg 1965 reported crush and export of shelled peanuts converted to farmers' stock by 1.33 factor. ^Net weight basis beginning 1967 ^Loan rate for quota" peanuts. Loan rate for additional peanuts 12.5 cents for 1978 crop peanuts, 15.0 cents for 1979 peanuts, and 12.5 cents for 1980 and 1981 croos ^Not availablP 'Preliminary. Ôctober 1, 1981, estimate. '

C CO

•0

to 3 C

3 a. c

Appendix Tables

Appendix table 2—Raw shelled peanuts used In primary products and cleaned in-shell roasting stocks, 1964-80

Year Peanut Peanut Salted Peanut < Dther Total Cleaned Total beginning butter candy peanuts butter shelled in-shell. shelled August 1 sandwiches shelled-

equivalent^ equivalent^

Million pounds

1964 480 160 202 20 16 879 65 944

1965 499 180 213 22 18 933 72 055

1966 480 198 229 23 17 948 69 1,017

1967 514 216 233 22 17 1,002 69 1,071

1968 525 226 240 22 18 1.032 78 1,110 1969 541 236 241 22 21 1.061 80 1.141

1970 540 243 239 25 18 1.065 90 1.155 1971 557 246 242 26 17 1,087 87 1,174 1972 578 260 254 26 18 1.136 88 1,224 1973 660 252 284 24 19 1,239 114 1,353 1974 651 217 278 20 15 1.181 97 1,278 1975 648 240 301 21 16 1.226 107 1,331

1976 618 235 254 24 18 1.149 123 1.272 1977 624 235 274 28 19 1,180 144 1,324 1978 665 268 292 28 19 1,272 159 1,431 1979 700 258 285 30 19 1,292 151 1,443 1980 589 238 205 24 20 1.076 90 1.166

The factor for conversion to farmers' stock was 1.05 for 1960-65. and 1.00 for 1966 and subsequent years. Factors for conversion of farmers' stock to shelled in 1964, 1965. and 1966 are as follows: 1964-72.05; 1965-72.23; 1966-71.27. For 1967 and subsequent years, the factor used by the Economic Research Service is 75.19.

Încludes imports. Source: Peanut Stocks and Processing, various issues, 1964-81, Statistical Reporting Service, U.S. Department of Agriculture.

Appendix table 3- -Peanut meal and oil in relation to total U.S. high-protein meal and vegetable oil, 1975/76-1980/81

Peanut Total high- Peanut meal Peanut Edible Peanut oil meal protein meal share of high- oil vegetable oil share of

Year^ production production^ protein meal production production vegetable oil

—1,000 metric tons— Percent — 1,000 metric tons— Percent

1975/76 223 33,592 .66 165 8,207 .020 1976/77 217 28,375 .76 161 7,075 .023 1977/78 215 39.166 .55 160 9,805 .016 1978/79 229 40,921 .56 169 10,271 .016 1979/80 229 50.085 .46 170 12,902 .013 1980/81 133 39,280 .34 99 9,885 .010

^Split year includes crops harvested in the late months of the first year shown. 244-percent protein meal equivalents.

Source: Foreign Agriculture Circular, FOP 8, April 1980; Foreign Agriculture Circular. FOP 17. October 1981, U.S. Department of Agriculture.

25


Appendix table 4—Estimated costs of producing oil and meal, United States, 1981

Costs of oil and meal from peanuts

Peanut yield: 2,569 pounds per acre 1981 production cost: $546.49 per planted acre, excluding land^

Oil produced per acre: ^QQQ X 634 = 814 lbs crude peanut oil.

Meal produced per acre: ^QQQ X 838 = 1,076 lbs of 50-percent peanut meal

Value of oil: 814 x $0,340 = $276.76 (71 percent) Value of meal: 1,076 x $0,105 = 112.98 (29 percent)

$389.74

Cost allocation for oil: $546.49 x .71 = $388.01 Cost allocation for meal: $546.49 x .29 = $158.48

<tOQQ n-j

Per-unit cost of oil: »^^ = $0.48 per pound

tí« H CO AQ

Per-unit cost of meal: ^ Q^g = $0.15 per pound

Costs of oil and meal from soybeans

Soybean yield: 30 bu/acre 1981 production cost: $149.71 per planted acre, excluding land^

Oil produced per acre: 30 x 10.7 = 321 pounds crude soybean oil

Meal produced per acre: 30 x 43.1 = 1,293 pounds 49-50 percent soybean meal

Value of oil: 321 x $0.23 = $73.83 (33 percent) Value of meal: 1293 x $0.1175 = 151.93 (67 percent)

$225.76

Cost allocation for oil: $149.71 x .33 = $49.40 Cost allocation for meal: $149.71 x .67 = $100.31

$49 40 Per-unit cost of oil: ^pi— = $0.15 per pound

Si 00 31 Per-unit cost of meal: TögT" = $0.08 per pound

'Costs of Producing Selected Crops in the United States—1978, 1979, Agriculture, Nutrition, and Forestry, 1981.

1980, and Projections for 1981. U.S. Senate Committee on

26

Appendix Tables

Appendix table 5—Harvested acres of peanuts, by State

Year Georgia Florida Alabama Texas Oklahoma Virginia North Carolina U.S.totaP

7,000 acres

1950 728 72 335 490 212 148 232 2,268 1951 662 65 298 338 220 146 237 2,009 1952 506 54 209 237 112 118 193 1,460 1953 536 56 215 287 119 110 177 1,528 1954 440 55 201 281 100 106 176 1,387

1955 546 60 225 389 134 116 190 1,691 1956 522 56 214 175 70 118 198 1,385 1957 510 52 205 287 109 106 180 1,481 1958 515 52 209 307 124 105 178 1,523 - 1959 484 49 201 289 118 104 178 1,450

1960 475 47 191 285 110 104 176 1,410 1961 475 47 193 296 115 104 176 1,429 1962 472 48 195 278 115 104 176 1,412 1963 478 49 195 268 117 104 176 1,409 1964 480 50 196 261 123 101 173 1,405

1965 485 50 194 287 125 103 169 1,435 1966 482 49 186 288 122 103 167 1,418 1967 478 49 176 285 123 102 167 1,402 1968 497 51 181 294 121 102 167 1,436 1969 502 53 187 297 120 102 167 1,451

1970 507 53 190 306 116 102 167 1,467 1971 510 54 194 297 119 93 155 1,454 1972 512 54 197 307 115 102 166 1,486 1973 512 55 200 309 118 103 166 1,496 1974 516 55 201 288 114 104 166 1,472

1975 524 • 55 206 304 115 102 165 1,504 1976 526 55 214 304 120 103 166 1,522 1977 526 55 215 300 120 103 166 1,516 1978 526 55 209 301 115 103 168 1,509 1979 527 55 210 309 120 101 166 1,520 1980 514 55 200 230 105 101 166 1,399 1981 565 60 222 242 91 105 177 1,493

Û.S. totals include Mississippi, New Mexico, South Carolina, and other minor peanut-producing States.

Source: U.S. Department of Agriculture. Crop Production, 1950-81.

27


Appendix table 6—Production of peanuts (farmers' stock basis), by State

Year Georgia Florida Alabama Texas Oklahoma Virginia North Carolina U.S. totaP

Million pounds

1950 681 61 325 331 125 228 253 2,037 1951 596 57 206 118 114 238 320 1,676 1952 405 48 209 89 48 241 307 1,366 1953 531 55 200 179 114 219 271 1,589 1954 266 45 111 107 41 172 251 1,008

1955 513 62 214 239 129 181 204 1,565 1956 569 60 216 88 51 245 351 1,608 1957 464 46 135 151 87 218 306 1,436 1958 613 58 222 224 133 220 331 1,836 1959 542 44 161 207 132 199 281 1,591

1960 594 57 218 219 157 197 319 1,786 1961 575 58 207 225 147 192 310 1,743 1962 548 63 196 222 163 234 352 1,810 1963 746 68 237 196 170 211 363 2,022 1964 821 78 260 268 184 210 351 2,205

1965 878 83 258 276 195 269 390 2,384 1966 810 72 227 403 204 256 401 2,410 1967 975 79 236 333 209 256 347 2,473 1968 934 86 246 426 227 237 347 2.543 1969 946 85 285 389 204 237 343 2,529

1970 1.126 110 315 430 192 312 446 2,979 1971 1,270 140 402 367 219 219 326 3.005 1972 1,341 138 368 480 243 266 370 3,275 1973 1,344 150 400 471 254 322 466 3,474 1974 1,662 170 474 413 218 296 384 3,668

1975 1,727 178 536 464 232 285 374 3,857 1976 1.554 1,65 514 464 246 309 441 3.751 1977 1,499 170 589 394 268 293 444 3,726 1978 1,725 182 552 436 207 312 465 3,952 1979 1,705 180 585 533 264 254 378 3,968 1980 995 143 265 265 140 136 291 2,308 1981 1,655 178 603 393 189 331 562 3,985

Û.S. totals include Mississippi, New Mexico, South Carolina, and other minor peanut-producing States.


28

Appendix Tables

Appendix table 7—Average yield per acre of peanuts harvested (farmers' stock basis), by State

Year Georgia Florida Alabama Texas Oklahoma Virginia North Carolina U.S. average

Pounds per acre

1950 935 850 970 675 590 1,540 1,090 898 1951 900 870 690 350 520 1,630 1,350 834 1952 800 890 1,000 375 425' 2.040 1,590 936 1953 990 990 930 625 960 1.990 1,530 1.040 1954 605 810 550 380 410 1.625 1,425 727

1955 940 1,025 950 615 960 1,560 1,075 925 1956 1,090 1,075 1,010 500 725 2,080 1,775 1,161 1957 910 880 660 525 800 2.060 1,700 970 1958 1,190 1,120 1,060 730 1,075 2,100 1,860 1,205 1959 1,120 900 800 715 1,115 1.910 1,580 1,097

1960 1,250 1,210 1,140 770 1,425 1,890 1,810 ' 1.266 1961 1,210 1,230 1,075 760 1,275 1.850 1,760 1.220 1962 1,160 1,320 1,005 800 1.415 2,250 2,000 1,282 1963 1,560 1,390 1,215 730 1.450 2.030 2,060 1,435 1964 1,710 1,560 1,325 1,025 1.500 2,080 2,030 1,569

1965 1,810 1,660 1,330 960 1,560 2.610 2,310 1,661 1966 1,680 1,475 1,220 1,400 1,675 2.490 2,400 1,700 1967 2,040 1,610 1,340 1,170 1,700 2.505 2,080 1.765 1968 1,880 1,680 1,360 1,450 1,880 2.320 2,075 1,771 1969 1,885 1,605 1,525 1,310 1,700 2,325 2,055 1,743

1970 2,220 2,075 1,660 1,405 1,655 3,060 2.670 2,031 1971 2,490 2,590 2,070 1,235 1.840 2,360 2.100 2,066 1972 2,620 2,550 1,870 1,565 2,110 2,605 2,230 2,203 1973 2,625 2,735 2,000 1,525 2,150 3,130 2,810 2,323 1974 3,220 3,100 2,360 1,435 1,910 2,845 2,315 2,491

1975 3,295 3,230 2,600 1,525 2,020 2,790 2.265 2.565 1976 2,955 3,000 2,400 1,525 2,050 3,000 2,655 2.465 1977 2,850 3,100 2,740 1,315 2,230 2.845 2.675 2.457 1978 3,280 3,310 2,640 1,450 1,800 3,025 2.770 2,619 1979 3,235 3,270 2,785 1,725 2,200 2,510 2,280 2.611 1980 1.935 2,600 1,325 1,275 1.335 1,350 1,755 1,650 1981 2,930 2,970 2,715 1,625 2.080 3,150 3.175 2,668


29


Appendix table 8-~Peanut production by type, selected States, 1977

Type of peanut Unit Alabama Georgia North Carolina Virginia Texas Oklahoma U.S.total

Virginia: Harvested 1,000 acres 0.150 1.341 163.6 103.0 — 278.5 Yield lbs/acre 1,880 3.016 2,664 2,845 — 2,707 Production mil. lbs .282 4.044 435.7 293.0 — 753.7 Share of U.S. total percent .04 .5 57.8 38.9 — — 100.0

Runner: Harvested 1,000 acres 214.8 519.2 2.450 — 101.1 23.7 919.1 Yield lbs/acre 2,741 2,861 3,383 — 1,995 2,945 2,754 Production mil. lbs 588.6 1,485.1 8.3 — 201.7 69.8 2,530.7 Share of U.S. total percent 23.2 58.7 .3 — 8.0 .3 100.0

Spanish: Harvested 1,000 acres 0.088 5.5 — — 198.6 96.3 309.1 Yield lbs/acre 2,364 1,806 — — 967 2,054 1,344 Production mil. lbs .208 9.92 — — 192.0 197.8 415.6 Share of U.S. total percent .5 2.4 — — 46.2 47.6 100.0

Valencia:^ Harvested 1,000 acres — — — — .318 9.8 Yield lbs/acre — — — — 2,509 — 2,656 Production mil. lbs — — — — .798 26.0 Share of U.S. total percent — — — — 3.1 — 100.0

All types: Harvested 1,000 acres 215.0 526.0 166.0 103.0 300.0 120.0 1,516.4 Yield lbs/acre 2,740 2,850 2,675 2,845 1,315 2,230 2,457 Production mil. lbs 589.1 1,499.1 444.0 293.0 394.6 267.6 3,726.0 Share of U.S. total percent 15.8 40.2 11.9 7.9 10.6 7.2 100.0

— = None re ¡ported. ^Produced mainly in New Mexico.

Source: U.S. Department of Agriculture, Agricultural Stabilization and Conservation Service.

30

Appendix Tables

Appendix table 9—Average acres of peanuts grown per farm and tenure patterns, major peanut-producing States and regions

State and region

Peanut acreage per farm^

1974 1978

Distribution of 1977 allotment acres by tenure^

Owned Cash rented Share rented

Acres-


Southeast

41.1 30.6 45,7 43.0


Virginia-North Carolina

27.1 49.6 32.8

Texas Oklahoma

Southwest

74.3 44.9 62.7

U.S. average 41.3

52.2 30.8 52.4 50.0

37.1 59.6 43.4

89.5 56.0 76.6

51.5

22.5 3

28.4

18.3 28.5

39.4 39.7

NA

Percent

58.1 3

19.4 3

68.2 3,4

54.0 48.6

27.7 22.9

30.8 25.1

29.8 35.2

NA NA

NA = Not applicable. ^Data from 1978 Census of Agriculture. ^Based on data from 1977 Peanut Cost of Production Survey. ^Data not available.

Appendix table 10-~Peanut allotment acreage and number of peanut farms, by State and region, 1980

State and region Allotment Farms' Average allotment per farm^

1,000 acres Number Acres


Southeast

216.2 55.5

530.4 802.1

8,242 2.736

17,068 28,046

26.2 20.3 31.1 28.6

Oklahoma Texas

Southwest

138.3 358.1 496.4

3,935 7,678

11,613

35.1 46.6 42.7


Virginia-North Carolina

Other States

U.S. total

167.9 104.8 272.7

42.8

1,614.0

9,884 4,550

14.434

1,033

55,126

17.0 23.0 18.9

41.4

29.3

^These data reflect permanent transfer of allotment from lower to higher yielding farms. Îndicates average allotment acreage available per farm after permanent transfer of allotments from lower to higher yielding farms.


31


Appendix table 11~Effective peanut allotment acreage by size of farm allotment, 1976

Size of allotments Total allotments Farms Allotment acreage

Acres

3.0 or less 3.1-5.0 5.1-7.5 7.6-10.0 10.1-20.0 20.1-30.0 30.1-40.0 40.1-50.0 50.1-75.0 75.1-100.0 100.1-200.0 200.1-300.0 300.1-400.0 400.1-500.0 500.1-600.0 600.1-700.0 700.1-800.0 800.1-900.0 900.1-1,000.0 Over 1,000

U.S.total

Acres

8,249.0 22,690.4 42,084.6 50,623.5

208,044.0 178,875.5 148,459.2 131,966.0 217,250.0 145.934.0 242,594.7 81,044.9 35,172.4 17,939.7 9,414.1

11.115.9 5.122.6 2,531.4 1,942.9 7,533.6

1,568,589.0

Number

4,591 5,514 6,700 5,749

14,398 7,302 4,293 2,933 3,581 1,694 1,810

340 103 40 17 17

7 3 2 6

59,100

Percent

9.3 11.3 9.7

24.3 12.3 7.3 5.0 6.1 2.8 3.1

.6

.2

.1

100.0

Percent

0.5 1.4 2.7 3.2

13.3 11.4 9.5 8.4

13.9 9.3

15.5 5.2 2.2 1.1

.6

.7

.3

.2

.1

.5

100.0

^Less than 0.1 percent.


Appendix table 12—Equipment use per acre of peanuts in major peanut-producing States, 1977^

State Preplant tillage Plant Cultivate

Chemical application^ Harvest Other

Equipment f;>77es over per acre

Alabama 5.17 1.04 1.88 8.15 2.00 0.77

Georgia 5.36 1.02 1.73 7.85 1.93 .67

North Carolina 4.68 1.00 1.78 9.00 2.33 .67

Virginia 5.15 1.00 1.13 7.28 2.36 .87

Texas: Irrigated Nonirrigated

6.22 5.35

1.02 1.00

3.07 3.22

1.78 1.84

2.00 1.98

.45 1.61

Oklahoma: Irrigated Nonirrigated

7.64 4.49

1.05 1.02

3.05 2.69

1.98 2.58

2.23 1.96

.98 1.45

^Based on data from 1977 Peanut Cost-of-Production Survey. Încludes all single operation applications of chemicals including fertilizer. This item does not include applications made with

attachments to tillage or other equipment.

32

Appendix table 13—U.S. average costs of producing peanuts

Appendix Tables

Item 1978 1979 1980 1981

Variable costs Seed Fertilizer Lime and gypsum Chemicals Custom operations All labor Fuel and lubrication Repairs Drying and cleaning Interest

Machinery ownership costs Replacement Interest Taxes and insurance

General farm overhead Management

Total, excluding land

Land charge: Composite, current value Composite, acquisition value

Variable costs Machinery ownership costs Farm overhead Management Land, composite acquisition

Total, all costs

Value of secondary product Net cost per pound

Dollars i per i acre

271.27 298.47 320.24 447.37 54.50 57 95 66.70 131.66 18.80 1996 22.64 24.45 18.03 18.41 20.28 24.42 64.10 65.29 70.15 78.91

4.48 481 4.68 5.98 32.62 3583 36.83 42.80 22.01 31 14 40.74 49.10 19.97 21.64 23.10 27.51 29.27 33.63 22.02 42.03

7.49 9.81 13.10 20.51

54.76 62.49 71.65 88.85 34.72 36.08 39.02 46.04 15.34 21.40 27.33 36.49 4.70 5.01 5.30 6.32

7.22 7.99 7.42 8,12 34.36 36.90 39.93 54.43

367.61 405.85 439.24 598.77

104.67 115.97 113,05 142.77 93.81 102.49 95.84 122.99

Dollars per pound

0.104 0.115 0,210 0.170 .021 .024 .047 .034 .003 .003 .005 .003 .013 .014 .026 .021 .036 .041 .069 .047 .177 197 .357 .275

.005 .006 .006 .006 ,172 .191 .351 .269

Pounds per acre

Yield per planted acre 2,602 2,587 1,526 2,628

Source: U.S. Senate Committee on Agriculture, Nutrition, and Forestry. Costs of Producing Selected Crops in the United States. Committee Prints.

33


Appendix table 14—Peanut production costs per acre by region

Item Southeast Southwest Virginia-North Carolina

Variable costs: 1978 1979 1980 1981

Machinery ownership costs: 1978 1979 1980 1981

Land connposite value: 1978 1979 1980 1981

Other costs:^ 1978 1979 1980 1981

Total costs: 1978 1979 1980 1981

308.16 335.95 359.23 485.47

53.27 61.07 67.35 83.39

121.13 138.38 134.02 151.44

45.87 49.01 48.90 63.79

528.43 584.41 609.50 784.09

Dollars per acre

194.30 221.48 242.94 350.26

62.21 68.58 83.78

108.20

31.91 41.73 28.33 33.55

32.66 36.74 42.43 56.66

321.08 368.53 397.48 548.67

284.78 312.53 323.35 455.19

47.94 56.86 65.87 80.96

110.59 95.00 86.52

149.78

42.46 45.89 50.26 66.18

485.77 510.28 526.00 752.11

Pounds

Yield per acre: 1978 1979 1980 1981

3,098 3,095 1,760 2,880

1,496 1,820 1,050 1,675

Percent

2,887 2,332 1,567 3,067

Percentage of U.S. production (1978-81) 61.6 17.5 19.1

^General farm overhead and management.


34

Appendix table 15—Peanut production costs, by region (1978-81 average)

Appendix Tables

Item Southeast Southwest Virginia-

North Carolina United States

Dollars per pound

Variable costs Machinery ownership Farm overhead Management


Land, composite value Value of secondary product Net cost per pound

Yield per acre planted

0.146 .026 .002 .018 .192

.054

.006

.240

2,708

0.173 .056 .006 .024 .259

.023

.013

.269

0.147 .027 .004 .018 .196

.046

.003

.239

Pounds per acre

1,510 2,463

0.150 .032 .004 .018 .204

.048

.006

.246

2,336

Source: U.S. Senate Committee on Agriculture, Nutrition, and Forestry. Costs of Producing Selected Crops in the United States Committee Prints.

35

U.S. Peanut industry

Appendix table 16—Average costs of producing peanuts, Southeast

Item 1978 1979 1980 1981





Land charge: Share rent Cash rent Current value Acquisition value Composite, current value Composite, acquisition value


Total, all costs


D ollars per acre

308.16 335.95 359.23 485.47 64.19 66.02 76.21 144.23 24.33 25.50 28.78 30.73 22.84 22.91 25.68 29.40 80.18 81.85 87.08 94.87 4.92 5.27 5.50 6.55

32.17 34.71 35.52 42.00 19.53 29.07 39.03 47.11 20.14 21.66 23.04 39.34 30.52 36.97 22.62 27.23

9.34 11.99 15.77 24.01

53.27 61.07 67.35 83.39 33.89 35.40 36.75 43.19 14.81 20.68 25.41 34.09 4.57 4.99 5.19 6.11

7.64 8.46 5.67 6.28 38.23 40.55 43.23 57.51

407.30 446.03 475.48 632.65

186.33 181.41 40.78 188.94 154.48 180.20 191.80 198.37 56.19 66.92 79.79 90.32 19.41 23.06 22.09 25.50

130.94 150.08 149.41 168.74 121.13 138.38 134.02 151.44

Dollars per pound

0.100 0.109 0.204 0.169 .017 .020 .038 .029 .002 .003 .003 .002 .012 .013 .025 .020 .039 .046 .081 .052 .170 .191 .351 .272

.005 .005 .006 .006

.165 .186 .345 .266

Pounds per acre

Yield per acre planted 3,098 3,095 1,760 2.880


36

Appendix table 17—Average costs of producing peanuts, Southwest

Appendix Tables

Item 1978 1979 1980 1981







Total, all costs


Dollars per acre

194.30 221.48 242.94 350.26 39.15 41.33 49.25 109.98 12.53 13.95 16.40 16.77

.08 .08 .11 .08 29.33 30.28 32.43 36.43 4.52 4.89 4.02 6.13

36.76 40.31 41.80 49.89 32.23 42.03 52.68 65.68 22.03 24.23 25.59 31.80 13.19 18.49 12.11 20.00 4.48 5.89 8.55 13.50

62.21 68.58 83.78 108.20 39.44 39.78 46.17 57.29 17.53 23.67 32.13 44.05 5.24 5.13 5.48 6.86

5.94 7.03 8.87 9.83 26.72 29.71 33.56 46.83

289.17 326.80 369.15 515.12

70.19 94.03 66.75 89.74 33.24 35.65 30.99 25.52 32.64 44.73 45.58 57.27

.77 4.84 3.93 4.90 44.65 57.68 48.13 58.42 31.91 41.73 28.33 33.55

Dollars per ] Dound

0.130 0.122 0.231 0.209 .042 .038 .080 .065 .004 .004 .008 .006 .018 .016 .032 .028 .022 .022 .032 .026 .216 .202 .383 .334

.010 .010 .013 .013

.205 .192 .370 .321

Pounds per acre

Yield per acre planted 1,496 1,820 1,050 1,675


37


Appendix table 18—Average costs of producing peanuts, Virginia-North Carolina region

Item 1978 1979 1980 1981







Total, all costs


Dollars per acre

284.78 312.53 323.35 455.19 50.24 61.04 65.29 121.41 12.46 13.39 14.17 15.42 32.19 34.81 35.01 39.92 71.70 73.11 77.79 84.41 3.09 3.31 3.25 4.13

27.41 31.89 33.16 36.37 13.44 19.62 27.69 34.39 16.31 17.39 19.54 23.01 50.92 48.26 35.27 77.29

7.02 9.71 12.18 18.84

47.94 56.86 65.87 80.96 30.02 32.13 34.84 40.50 13.64 19.84 25.64 34.20 4.28 4.89 5.39 6.26

7.35 8.14 10.31 11.42 35.11 37.75 39.95 54.76

375.18 415.28 439.48 602.33

172.05 101.65 54.82 219.49 114.15 117.76 125.29 161.25 78.71 100.86 118.50 133.75 29.70 35.11 35.52 40.30

121.56 109.71 105.09 170.60 110.59 95.00 86.52 149.78

Dollars per pound

0.099 0.134 0.206 0.148 .017 .024 .042 .026 .002 .004 .007 .004 .012 .016 .026 .018 .038 .042 .068 .045 .168 .220 .349 .241

.002 .003 .004 .003

.166 .217 .345 .238

Pounds per acre

Yield per acre planted 2,887 2,332 1,567 3,067


38

Appendix Tables

Appendix table 19—Peanut production in specified countries, shelled basis^

Country 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/812

1,000 metric tons

Argentina 330 218 300 254 450 279 504 221 180 Benin 32 26 30 30 46 45 48 53 53 Brazil 443 340 332 386 243 255 349 362 233 Burma 293 385 350 303 312 343 288 253 363 Cameroon 113 65 55 60 68 68 68 68 68

Central African Republic 64 64 64 64 64 64 64 64 64

Chad 34 38 68 53 53 53 53 53 53 China 1,838 1,763 2,100 2,025 2,063 1,549 1,783 2,117 2,700 India 3,069 4,449 3,833 5,066 3,948 4,565 4,656 4,326 3,765 Indonesia 362 384 475 426 512 557 531 596 643

Mozambique 92 92 54 54 60 53 60 56 56 Nigeria 405 257 345 227 233 227 256 283 300 Senegal 405 525 675 1,068 887 503 790 450 367 South Africa 148 403 182 99 170 224 134 258 225 Sudan 426 408 698 597 561 770 610 639 599 Taiwan 71 73 71 68 67 58 69 65 65

Tanzania 41 47 47 47 47 56 56 56 56 Thailand 152 158 173 107 107 89 77 92 102 Uganda 161 161 161 161 161 161 161 161 161 United States 1,114 1,182 1,248 1,313 1,276 1,268 1,345 1,350 785 Upper Volta 45 47 49 49 49 64 53 52 53 Zaire 150 173 201 217 221 221 221 221 221 Zimbabwe 57 150 148 140 106 79 86 50 57

Subtotal 9,845 11,408 11,659 12,814 11,704 11,551 12,262 11,846 11,169

Others 1,911 941 1,307 1,407 1,225 1,222 1,258 856 816

World total 11,756 12,349 12,966 14,221 12,929

Percent

12,830 13,520 12,702 11,985

U.S. production as a percentage of world total 9.5 9.6 9.6 9.2 9.9 9.9 9.9 10.6 6.5

^Shelled peanuts equivalent to 0.75 times in shell weight. Local marketing year. ^Preliminary.

Source: Foreign Agriculture Circular FOP 15, September 1981 gives country data. Foreign Agriculture Criculars FOP 2, January 1980 and FOP 14, August 1981 give world totals for marketing years 1975/76-1980/81. Data for 1979/80 and 1980/81 were updated to reflect Foreign Agriculture Service estimates as of early February 1982. Earlier year totals from NED Staff Report, "Peanuts: Background Information and Program Alternatives," AGESS 810130, February 1981.

39


Appendix table 20—Peanut exports from specified countries, shelled basis'

Country 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/812 1,000 metric tons

Argentina — — — 32 37 103 69 38 Brazil 59 54 56 23 27 15 20 29 30 China 38 31 31 30 20 23 30 32 113 India 25 96 55 179 68 20 20 54 Malawi 29 23 28 32 17 11 24 29 34 Senegal — 45 11 131 59 38 38 56 45 South Africa 53 156 29 14 39 68 20 68 68 Sudan 154 131 206 354 305 148 50 24 60 United States 177 242 252 148 266 349 389 359 171

Subtotal 535 778 668 911 833 689 694 686 613

Others 140 50 17 28 32 57 55 69 76

World totaP 675 828 685 939 865

Percent

746 753 755 689

U.S. exports as a percentage of world total 26 29 37 16 31 47 52 48 25

— = None reported. ^Shelled peanuts equivalent to 0.75 times in shell weight. Local marketing year. ^Preliminary. Êxcludes some minor exporting countries.

Source: Foreign Agriculture Circular FOP 15, September 1981. Data for 1978/79-1980/81 were updated to reflect Foreign Agriculture Service estimates as of early February 1982. Foreign Agriculture Service, U.S. Department of Agriculture.

Appendix table 21—U.S. peanut exports as proportion of total peanut imports by selected countries

Country Average for selected periods Importing 1967-6S 1 1971-73 1974-76 1977-78

Percent

Canada 60 72 69 74 Japan 2 22 32 41 Netherlands 14 24 33 63 Poland 38 39 48 45 Switzerland 2 38 51 54 United Kingdom 6 11 20 47 West Germany 5 6 5 17 Other Europe 1 12 5 19 Other 19 6 33 55

World total 5 18 22 41


Source: NED Staff Report, "Peanuts: Background Information and Program Alternatives," AGESS 810130, February 1981.

40

Appendix Tables

Appendix table 22— Market destination of U.S. exports of shelled peanuts and peanut oil

Appendix table 23—U.S. peanut oil exports as proportion of total peanut oil imports by selected countries

Average for selected periods

Destination 1969-71 1972-74 1975-77 1978-79

Percent

Shelled peanuts: Canada 51 22 20 15 France 1 11 4 19 Italy Japan Netherlands

6 9 6

8 8 7

5 11 14

5 7

10 Switzerland 10 17 13 8 United Kingdonn 2 6 9 14 Venezuela 2 4 1 0 West Germany

Other 3

10 2

15 2

21 3

19

Peanut oil: Australia 5 6 2 3 Belgium-Luxembourg Canada

17 6

11 8

1 6

9 16

Dominican Republic France

19 3

37 1

4 0

5 20

India 0 0 33 5 Netherlands 11 3 5 1 United Kingdom Venezuela

17 0

21 6

1 8

1 27

West Germany Other

15 7

2 5

2 38

0 13

Country 1971-73 1974-76

Canada Dominican Republic Netherlands United Kingdom West Germany Other

World total

36 79 17 12

1 4

Percent

29 28

8 2

7

7

1977-78

66 23 23

5 3 9

10


Source: NED Staff Report, "Peanuts: Background Information and Program Alternatives," AGESS 810130, February 1981.

Source: Foreign Agriculture Circular FOP 12, June 1981, gives data for 1975-77 and 1978-79. Foreign Agriculture Circular FOP 7, June 1976, gives data for 1969-71 and 1972-74. Foreign Agri- culture Service, U.S. Department of Agriculture.

41


Appendix table 24--Peanut oil production in specified countries^

Country 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/812

Argentina Brazil Burma China India Indonesia

Senegal South Africa Sudan Uganda United States Zaire

Subtotal

Others

World total

76 112 73

392 1,060

31

123 34 92 24

122 22

2,161

609

2,770

65 86 96

376 1,242

33

136 79 50 24 97 26

2,310

454

2,764

93 84 86

448 1,310

41

232 67 113 24 85 30

2,613

454

3,067

79 98 89

432 1,491

36

336 39 22 24

216 32

2.894

500

3,394

1,000 metric tons

127 62 110 440

1,319 44

288 38 32 24 165 33

2,602

394

3,076

75 65 108 331

1,366 48

150 43 126 24 66 33

2,435

370

2,805

99 100 94

380 1,441

23

232 30 129 24 74 33

2,659

352

3.011

65 128 79

452 1,340

26

96 60 149 24 81 33

2,533

291

2.824

45 54 90 576

1,340 28

64 56 122 24 63 33

2,495

265

2,760

U.S. production as a percentage of world trade 4.4 3.5 2.8 6.4

Percent

5.4 2.4 2.5 2.9 2.3

^Local nnarketing year. ^Preliminary.

Source: Foreign Agriculture Circular FOP 15, September 1981, gives country data. Foreign Agriculture Circulars FOP 2. January 1980, and FOP 14, August 1981, give world totals for marketing years 1975/76-1980/81. Country data for 1980/81 and world totals for all years adjusted to reflect Foreign Agriculture Service estimates as of early February 1982. Earlier year totals from NED Staff Report, "Peanuts- Background Information and Program Alternatives," AGESS 810130. February 1981.

42

Appendix Tables

Appendix table 25—Peanut oil exports from specified countries^

Country 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/812

1,000 metric tons

Argentina 70 59 89 54 138 63 115 70 45 Brazil 44 32 38 94 49 61 81 120 52 Burma — — — — — — — — China 12 12 9 12 5 7 24 28 30 India — 1 — 4 3 5 3 Indonesia — — — — — — — — —

Senegal 63 95 190 286 236 55 182 72 12 South Africa 9 22 8 5 13 19 1 26 27 Sudan 1 — 11 1 12 24 39 19 30 Uganda — — — _ _ _ __ — — United States 48 28 16 45 21 57 18 7 22 Zaire — — — — — — —

Subtotal 247 249 361 501 477 291 463 342 218

Others 154 51 72 47 43 43 61 81 78

World totaP 401 300 433 548 520

Percent

334 524 423 296

U.S. production as a percentage of world total 12 9 4 8 4 17 3 2 7

— = None reported. ^Local marketing year. ^Preliminary. Êxcludes some minor exporting countries.

Source: Foreign Agriculture Circular FOP 15, September 1981, gives country data. Country data for 1980/81 and world totals for all years adjusted to reflect Foreign Agriculture Service estimates as of early February 1982. Foreign Agriculture Service, U.S. Department of Agriculture.

43


Appendix table 26—World production of peanut meal and oil compared with world production of all protein meals and vegetable oiP

Crop year

Peanut meal production as a Peanut oil as

Peanut Total high- percentage of Peanut Total edible a percentage of meal protein meal high-protein meal oil vegetable oil total vegetable

production production^ production production production oils

— 7,000 metric tons— Percent —1,000 metric tons— Percent

4,454 52,655 8.5 3,302 24,495 13.4 4,555 54,007 8.4 3,377 26,078 12.9 4.768 55,490 8.6 3,535 27.939 12.7 3,940 57,531 6.8 2,921 27,472 10.6 4.169 68,311 6.6 3,091 30,919 10.0 4.292 62,822 6.8 3.182 30,414 10.5

4,864 71,184 6.8 3,606 33,244 10.8 4,306 64.836 6.6 3,183 30,983 10.3 4,245 76,735 5.5 3,147 35,252 8.9 4,574 81,559 5.6 3,357 37.560 9.1 4,278 93,800 4.6 3,130 41,611 7.9 4,290 85.556 5.0 3,093 39,704 8.6

1969/70 1970/71 1971/72 1972/73 1973/74 1974/75

1975/76 1976/77 1977/78 1978/79 1979/80 1980/8r

Production represents potential, and not actual, production; based on assumed extraction rates. Oilseed production is converted to 44-percent protein content basis.

M4-percent protein meal equivalent. ^Preliminary.

Source: Fats and Oils Situation, FOS-301, October 1980 and FOS-304, July 1981, U.S. Department of Agriculture, Economic Research Service; Circular FOP 2, January 1980, and FOP 14, August 1981, U.S. Department of Agriculture, Foreign Agriculture Service.

44

Appendix Tables

Appendix tabie 27—Average peanut price support levels and season average price received by farmers

Year Percent of parity

Percent

1941 68 1942 90 1943 90 1944 90 1945 90

1946 90 1947 90 1948 90 1949 90 1950 90

1951 88 1952 90 1953 90 1954 90 1955 90

1956 86 1957 81 1958 81 1959 75 1960 79

1961 86 1962 82 1963 80 1964 79 1965 77

1966 77 1967 75 1968 77.5 1969 76 1970 75

1971 75 1972 75 1973 75 1974 75 1975 75

1976 75 1977 75 1978 67 1979 59 1980 60 1981 55

Support price Season ave rag

Cents/lb

4.35 4.67 6.6 6.09 7.1 7.12 7.3 8.05 7.5 8.27

8.6 9.1 10.0 10.1 10.8 10.5 10.5 10.4 10.8 10.9

11.5 10.4 12.0 10.9 11.9 11.1 12.2 12.2 12.2 11.7

11.4 11.2 11.1 10.4 10.66 10.6 9.68 9.56

10.06 10.0

11.05 10.9 11.07 11.0 11.2 11.2 11.2 11.2 11.2 11.4

11.35 11.2 11.35 11.4 12.012 11.9 12.375 12.3 12.75 12.8

13.425 13.6 14.25 14.5 16.425 16.2 18.30 17.9 19.725 19.6

20.7 20.0 21.525 21.0 21.0^ 21.V 21.0^ 20.6^ 22.75^ 25.r 22.75^ 26.7^

^For quota peanuts. National average support price for "additional" peanuts amounted to $250 for the 1978, 1980, and 1981 crops, and $300 per ton for the 1979 crop.

Source: U.S. Department of Agriculture, Agricultural Stabilization and Conservation Service, Farm Commodity and Related Programs. AH-345, March 1976; and annual issues oí Agricultural Statistics, 1976-81.

45

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