With peanut production being up 20 percent over 2015, make sure your peanut crop has space in approved warehouse this year.
Peanut warehouse capacity could reach its limit as the 2016 crop comes in, and farmers need to make sure that their peanuts will have room in a Commodity Credit Corporation-approved warehouse.
According to the USDA, most states increased acreage in 2015, reflecting favorable of the farm bill and low prices for other commodities. The latest estimate shows a 6.21 billion-pound crop. Planted acreage at 1.63 million reflects a 20 percent increase, and harvested acreage at 1.57 million is 19 percent higher than the 2014 harvest. Overall, the total U.S. harvested acreage harvested is at nearly 1.57 million and is up from just 1.3 million in 2014.
“You’ve got to do what makes the most sense for your operation and what makes the most sense to your banker. But for God’s sake don’t plant (peanuts) without knowing where they are going to be stored,” said George Lovatt, a peanut broker and president of Lovatt and Rushing, Inc., in a Southwest Farm Press article.
Farmers need to make sure they have a binding agreement that their peanuts will have room in a Commodity Credit Corporation-approved warehouse. Peanuts not stored in approved warehouse cannot enter the federal peanut loan program.
The U.S. peanut production is expected to be 3.16 million tons and that will be adding to an already 1 million-ton carryover from the 2014 crop. Expected total use, or consumption, for the next year will be around 2.7 million tons, which is up and going in the right direction, but leaves a potential 1.38 million ton unused supply from the 2015 crop.
Before you consider planting peanuts, be sure to have an agreement with the warehouse and enroll in the Price Loss Coverage safety net program (PLC) or the Agriculture Risk Coverage safety net program (ARC).
The ARC program protects producers against income losses relative to their recent income experience and the PLC program provides income protection against steep price declines. If the PLC option is chosen, producers have the opportunity to update their payment yields to 90 percent of the 2008-2012 crop year averages.