THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, September 11, 1994 TAG: 9409100094
SECTION: SUFFOLK SUN PAGE: 16 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY JODY R. SNIDER, STAFF WRITER
DATELINE: SUFFOLK LENGTH: Long : 145 lines
FOR THE PAST TWO YEARS, peanut farmer Cecil Byrum has decreased the peanut acreage on his Isle of Wight County farm to meet domestic demand.
Byrum has had no choice.
The national peanut quota, set each Dec. 15 by the U.S. secretary of agriculture to react to domestic demand, has been declining for the past three years. This year's quota is 1.35 million tons.
The reason: National consumption of peanuts and peanut products is falling.
Since 1989, overall national consumption of peanuts has declined 6.6 percent, from a high of 1.657 billion pounds in 1989 to 1.547 billion in 1993, says Eddie Marks, general manager of the Virginia-Carolina Peanut Farmers Cooperative Association.
In 1993 alone, the national market dropped 2 percent, he said.
``Nobody really knows what the problem is,'' Marks said last week. ``There's competition with other snack foods like microwave popcorn and pretzels.
``But we're also suffering from an image problem. People believe there's a lot of fat in peanuts. But if you read the labels and understand it, it's good fat. About 80 percent of it is not saturated fat.''
Peanut imports from Argentina, China, Canada and Mexico also have intruded into the domestic market, said Betsy Owens, director of Virginia-Carolina Peanut Promotions in Nashville, N.C.
Imported confectionary items and peanut paste to make peanut butter are routinely making their way into the states. And there are no laws or regulations that limit the amount of peanut paste from Mexico.
``In the first eight months of last year, 25,000 tons of U.S. peanuts were displaced because of imports coming into the country,'' Owens said.
In addition to the imports, Marks said, domestic exports dropped by 50 percent last year because of a poor 1993 crop.
In-shell peanuts, the Virginia-type grown in Virginia and North Carolina, also have taken major hits. Last year, consumption fell by 16.64 percent.
``A poor-quality crop resulted in higher prices. In-shell peanuts got up to 70 cents per pound, when they generally sell for 40 to 50 cents per pound,'' Marks said.
And last month, sales of ball park, or in-shell, peanuts suffered another blow when the major leaguers laid down their bats and walked off the field.
``That's not helping our headache at all,'' Owens said.
Virginia farmers grow about 8 percent - 106,861 tons - of the national peanut quota, said Russell Schools, executive secretary for the Virginia Peanut Growers Association.
``Although the percent per state hasn't changed since 1977, the national quota continues to decline, bringing each peanut farmer's share of the quota down,'' he said. ``Last year, Virginia peanut farmers suffered about a 10 percent loss.''
With Southampton County holding the largest peanut acreage in the country - 28,000 acres with a gross value of $28 million - the cut in peanut quotas has hit home.
``Farmers are taking a hit every time the peanut quota is lowered,'' said Southampton Extension Service Agent Wes C. Alexander. ``A reduction of peanut quota is a reduction in net income for the farmer. And that's because peanuts are so lucrative. They're much more lucrative than corn.
``For example, farmers net $100 per acre on peanuts, where they only make $50 per acre on cotton and $30 per acre on corn.''
Down the road in Isle of Wight, farmer Cecil Byrum said he finds the income loss discouraging.
``If your boss came to you and said, `You have to work for a dollar less an hour for the next 10 years,' what motivation would you have?
``Nothing else kicks in as much in the kitty. Peanuts are still king on this farm. Even though we've shifted to cotton, cotton will never bring the money peanuts can bring.''
Virginia peanut growers are expecting a good year this year. Yields are predicted to average 3,000 pounds per acre, up 60 percent from last year and close to the record high of 3,200 pounds per acre in 1991.
But with a national quota of 1.35 million tons for the 1994 crop, a good crop could be bad news for the Federal Peanut Program.
According to industry figures, 1.29 million tons of peanuts may be all that's needed to meet the 1994 domestic demand. And the 1994 peanut crop is predicted to be a 2 million-ton crop, Marks and Schools said.
That means the government could be picking up the tab at $675 per ton, Marks said, when it buys excess peanuts.
``If the government can't sell those peanuts for edible use, they'll be crushed for oil - at about $200 a ton. The government could lose about $100 million. And that's bad news when it comes to renewing the Peanut Program in 1995,'' Marks said.
Byrum also fears the peanut program could be losing ground with Congress.
``It makes you tremble in your tracks,'' he said. ``A loss of the peanut program would put (more U.S.-grown) peanuts on the world market, and other countries just don't have the quality we have. We couldn't compete with their lower prices.''
Meanwhile, in Suffolk - which proudly bills itself as the Peanut Capital of the World - the new, $35 million processing plant for Planters has just been completed.
But even there, Planters has had to cut back on peanut buying to compensate for the decline in consumption, said Richard Burton, group product manager for Planters' nut businesses in Winston-Salem.
``Our peanut purchasing patterns have followed consumption trends for the past three to four years,'' he said Friday. ``And there's been a 1 to 2 percent decline in our peanut buying each year.''
Burton said Planters hopes to stop the decline by launching several new peanut products that could capture the younger snacking crowd.
And that, he said, could be the answer to changing the downward trend. ILLUSTRATION: [Cover]
COUNTING ON A CASH CROP
Staff photo by JOHN H. SHEALLY II
Eddie Marks, left, general manager of the Virginia-Carolina Peanut
Farmers Cooperative Association, meets with Bob Pitman, warehouse
manager at Nansemond Cold Storage.
Staff photo by JOHN H. SHEALLY II
Roger Lundy delivers a pallet of bagged peanuts to the warehouse at
Nansemond Cold Storage, at Washington and County streets in Suffolk.
He should have a busy year. Virginia growers, who produce about 8
percent of the national peanut quota, expect a good crop.
The peanut's best qualities are promoted in this poster from the
National Peanut Council.
PEANUT OVERVIEW
From 1992 to 1993, Americans have been chomping more peanut
candy, but they were eating less of other peanut products:
Peanut candy +10.3%
Snack peanuts -1.1%
Peanut butter -8.89%
In-shell peanuts -16.64%
Shell peanuts -1.5%
In 1993, domestic use of Virginia-type peanuts, the type grown in
Virginia and the Carolinas, broke down like this:
In-shell peanuts 35%
Snack peanuts 30%
Peanut butter 22%
Candy 11%
Other uses 2%
Source: Virginia-Carolina Peanut Farmers Cooperative Association
by CNB