Poor soil and tight margins provide opportunities for peanuts

As 2020 peanut prices gradually catch up to those offered in 2019, the popular legume, now

planted in an estimated 35,000-36,000 acres across Arkansas, continues to look like an

increasingly good bet for growers with soil beset by southern root knot nematodes or low

nutrient values.

Andy Vangilder, of the University of Arkansas Division of Agriculture, said the crop often serves

to kill two or more birds with one stone, redeeming otherwise unusable land and keeping input

costs low.

“The real draw for a lot of peanut farmers here is, you grow it on your sorriest ground,” Vangilder

said. “Not everywhere — in Marianna, for example, they grow it on some of their really good

cotton dirt, and they make really good yields. But up in Mississippi and Craighead counties, and

even in Clay County this year, we put it on our really sorry, sandier, southern root knot

nematode-infested ground, because the peanut isn’t affected by that pest.”

Peanut acreage in Arkansas has fluctuated over the past decade, dipping from about 18,000

acres in 2012 to about 10,000 acres in 2014, then steadily climbing since. In Arkansas, the

leading peanut counties include Mississippi and Craighead counties, with smaller acreages in

Greene, Lee, St. Francis and other counties in the Delta region.

From early August 2019 through early December, peanut prices in the United States generally

lagged behind prices of the previous year by as much as four cents per pound. By February

2020, markets had pulled even or even passed the previous year’s prices in some weeks, and

by the end of June, growers were seeing prices above 20 cents per pound. During the week

ending June 27, growers sold approximately 82.4 tons of peanuts, nearly all of which were

“runner-type” peanuts — the kind most commonly grown in Arkansas and elsewhere.

“Peanuts are one of our most profitable crops right now” in terms of input-to-cash receipts,

Vangilder said. “The inputs are not quite as high as other crops, and the profit margin is

probably better than any of them, depending on your yield.”

Scott Stiles, extension economist for the Division of Agriculture, said peanuts offer attractive

margins for growers who can take advantage of them.

“At just under $500 per acre, variable costs for peanuts are less than rice, corn or cotton,” Stiles

said. “Consumer demand has been strong for products like peanut butter due to more

stay-at-home eating,” he said. “The USDA is forecasting a 2.5 percent increase in domestic food

use of peanuts in the current marketing year.”

Of course, the value of a crop is measured in more than just its own profitability — it has to be

considered in the context of competing crops. And while peanuts are a strong competitor in that

context, they have the added benefit of restoring soil through nutrient deposits, and also by way

of starving off pest populations, particularly the southern root knot nematode, which often

bedevils cotton crops but is a non-issue to peanuts.

“If you have ground that’s really infested with root knot, that doesn’t produce other crops well,

you can put a crop of peanuts in there, and they’ll grow really well,” Vangilder said. “Then you

can come back with soybeans, cotton or corn. Our cotton producers typically see a 100-200 lb.

lint increase per acre by doing this.”

No matter how well the growing season goes, any crop can ultimately be fouled by bad harvest

conditions, and peanuts are no exception. Because harvesting the legumes is a two-step

process, involving both digging them from the ground, then later collecting them once they’ve

dried out, they are particularly vulnerable to wet weather.

“Bad weather can be very detrimental to peanuts in harvest,” Vangilder said. “When it’s wet, it’s

a problem, getting peanuts out of the ground. You can’t dig them out, and you can’t run them

through a combine.

“It’s a profitable crop, but it’s a higher-risk crop,” he said.

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