Chapter 1. 2002 OUTLOOK AND SITUATION

The 2001 Crop

U.S. harvested acreage of peanuts was estimated at 1.391 million acres, up from 1.336 in 2000. Average yield was estimated at 2,783 pounds per acre up from 2,444 pounds in 2000. The October 1, 2001, crop estimate for U.S. production was 3.870 billion pounds, up from 3.265 billion pounds produced in 2000.

The October 1, 2001 crop estimate for North Carolina production was 357 million pounds, up from 338 million pounds produced in 2000. Average yield per acre in North Carolina was 2,900 pounds, up from 2,750 pounds per acre in 2000. Harvested peanut acreage in North Carolina was 123,000 acres, unchanged from 2000.

Peanut Use

Peanut consumption in the U.S. peaked in 1989 and then declined until 1995. Consumption has experienced moderate increases since 1995. Domestic food use in the 2001-02 marketing year was forecast at 2.230 million pounds, up slightly from 2.170 million pounds the previous year. Exports of peanuts were estimated in 2001-02 at 700 million pounds, up from 520 million pounds the previous year. Crush was expected to be higher in the current year at about 670 million pounds.

The Peanut Program

Sweeping changes were in process for the peanut program at the time of writing. The House of Representatives had passed a farm bill that included elimination of the current supply control program and incorporation of peanuts into a commodity program similar to grains and soybeans. The bill included compensation to quota owners of annual installments of $200 per ton of quota to be paid for 5 years. Peanuts would have a loan rate of $350 per ton and loan deficiency payments like soybeans and corn. Counter cyclical payments based on the difference between a target price of $480 per ton and market prices are also part of the bill. As with other commodities, fixed contract payments would also be made. Producers would establish base production as with crops like cotton. Similar farm bill legislation had passed the Senate Committee on Agriculture and was awaiting debates and possible passage by the Senate.

The Peanut Production Budget

The following budget is not intended to be representative of the average cost of producing peanuts in North Carolina. Individual producers should use this budget only as a guideline for developing their own budgets.
 

TABLE 1-1. ESTIMATED COSTS AND RETURNS PER ACRE OF PEANUTS, 2,800 POUND YIELD, 8-ROW EQUIPMENT, 4-ROW HARVESTER

	Unit	Quantity	Price or Cost/Unit	Total Per Acre	Your Farm
1. GROSS RECEIPTS Peanuts Quota Peanuts Additional Total Receipts:	lb lb	2,380.00 420.00	$0.31 $0.175	$737.80 $73.50 $811.30	__________ __________ __________
2. VARIABLE COSTS Seed Fertilizer Potash Boron Lime (prorated) Wet Land Plaster Fumigant Herbicides Insecticides Fungicides Scouting Hauling Drying & Cleaning Market Assessment Crop Insurance Tractor/Machinery Labor Interest on Op. Cap. Total Variable Costs:	lb lb lb lb ton cwt acre acre acre acre ton ton acre acre acre hrs dollar	110.00 60.00 2.50 0.50 10.00 1.00 1.00 1.00 1.00 1.00 1.40 1.40 644.70 1.00 1.00 11.88 191.55	$0.80 $0.25 $0.73 $27.45 $1.90 $3.73 $28.14 $34.74 $82.01 $7.00 $12.00 $25.00 $0.01 $15.00 $56.34 $8.00 9.0%	$88.00 $15.00 $1.83 $13.73 $19.99 $37.30 $28.14 $34.74 $82.01 $7.00 $16.80 $35.00 $6.45 $15.00 $56.34 $95.04 $17.24 $568.62	__________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________ __________   __________
3. Income Above Variable				$242.68	__________
4. FIXED COSTS Tractor/Machinery Total Fixed Costs:	acre	$1.00	$120.11	$120.11 $120.11	__________ __________
5. TOTAL COSTS				$688.73	__________
6. NET RETURNS TO LAND, RISK, AND MANAGEMENT				$122.57	__________
BREAK-EVEN YIELD Variable Costs Total Costs	lb lb	1,834 2,222	BREAK-EVEN PRICE Variable Costs Total Costs		$0.24 $0.29
*This budget excludes the additional $40.00 per acre for Sclerotinia blight. Prepared by Blake Brown, Gary Bullen, and Donny Lassiter, Department of Agricultural and Resource Economics.

Recommendations for the use of agricultural chemicals are included in this publication as a convenience to the reader. The use of brand names and any mention or listing of commercial products or services in this publication does not imply endorsement by the North Carolina Cooperative Extension Service nor discrimination against similar products or services not mentioned. Individuals who use agricultural chemicals are responsible for ensuring that the intended use complies with current regulations and conforms to the product label. Be sure to obtain current information about usage regulations and examine a current product label before applying any chemical. For assistance, contact your county Cooperative Extension agent.