published Monday, August 6th, 2012

Feeling the peanut pinch? Production is down; prices are up, but relief is on the way

Christopher Williams scoops boiled peanuts into a Styrofoam container inside P & P Produce in downtown Chattanooga on Thursday. Store manager Joe Ingram said that a global peanut shortage is causing peanut product prices to skyrocket.
Christopher Williams scoops boiled peanuts into a Styrofoam container inside P & P Produce in downtown Chattanooga on Thursday. Store manager Joe Ingram said that a global peanut shortage is causing peanut product prices to skyrocket.
Photo by Alyson Wright.
  • photo
    Raw peanuts sit in a bin inside P & P Produce in Chattanooga.
    enlarge photo

Customers crave boiled peanuts at the Brewhaus, a "German-American pub with a Southern twist" in Chattanooga's trendy North Shore neighborhood.

"They're very popular," general manager Michael Nolan said. "Three out of every 10 tables would ask for them."

The $6 appetizer's iconic appeal is simple, Norton explained: "You're in the South -- boiled peanuts."

Trouble is, Brewhaus hasn't been able to get the Southern specialty from its supplier for about six months.

The pub isn't alone. A worldwide peanut shortage has led to a lack of the South's signature legume, affecting Chattanooga businesses and pushing prices up for consumers.

The good news for peanut lovers is the shortage should be short-lived.

It was caused largely by farmers switching thousands of acres last year from peanuts to cotton because cotton commanded top dollar at the time. Now that peanut prices are soaring, swaths of Southern acreage have seesawed back to peanut production.

"The peanut shortage is going to be a thing of the past," predicted Tyron Spearman, editor of the Peanut Farm Market News, an electronic news hotline based in Tifton, Ga.

Georgia leads

Spearman said 80 percent of the U.S. peanut crop is concentrated in four states: Georgia, Florida, Alabama and South Carolina.

Georgia is the leader, growing 49 percent of the U.S. crop, Spearman said. Most of it is used to make peanut butter.

Last year, however, Georgia farmland planted with peanuts dropped to 475,000 acres — the lowest since 1982, said John P. Beasley, a University of Georgia peanut agronomist and editor of the "2012 Peanut Production Update."

Farmers switched to cotton after the cotton contract hit $1.20 per pound in 2010 — "officially the highest price since records began back in 1870 with the creation of the New York Cotton Exchange," according to the Wall Street Journal.

"Cotton prices skyrocketed," Beasley said, so switching from peanuts to cotton "was a no-brainer for farmers."

Then cotton prices started going down. Meanwhile, peanut processors upped the amount they pay farmers. At a time when the minimum price guaranteed by the farm bill was $355 a ton, processors began paying $500 to $600 per ton — and in some cases $1,000 a ton because of the peanut shortage.

"It's the old supply and demand," Beasley said. "This year, the average [acreage] in the Southeast has increased pretty dramatically."

Georgia acreage planted in peanuts soared this year to 710,000 acres — a 49 percent increase, he said. Overall, U.S. acreage planted in peanuts has increased about 25 percent this year.

Drought and disease can hurt peanut production, but "thus far, we've got a good season," Beasley said.

Price of peanuts

For consumers, the price of peanut butter has increased by about 30 percent, Spearman said, and wholesale peanut prices are up, too — when businesses can get peanuts.

"We are currently out of stock due to peanut shortage," reads a message on the website of Uncle Bud's Fried Peanuts, a Soddy-Daisy business that produces salted, garlic, Cajun and hot peanuts that can be eaten "shell-n-all."

P&P Produce on East 11th Street sells boiled, deep-fried and raw peanuts, but the produce stand's cost has nearly tripled from $38 for a 50-pound bag two years ago to $95 now, manager Joe Ingram said.

"The [wholesale] price has just skyrocketed," he said.

Because wholesale costs have increased, the number of roadside stands selling boiled peanuts has gone down, he said — it's harder for mom-and-pop operations to make a profit.

Grow your own goobers

Chattanooga-area peanut lovers who are jonesing for a peanut fix can grow their own.

"They do pretty well," said Mike Barron, greenhouse manager at Crabtree Farms, a community farm in Chattanooga tucked away off Rossville Boulevard.

Tennessee isn't a big peanut producer now, but according to "Tennessee: A Guide to the State," published in 1939 by Federal Writers' Project, Middle Tennessee once was noted for its peanut crop.

"In only two other states, Virginia and North Carolina, are more peanuts produced," the guide said.

Tennessee red and Tennessee white are two types of "heirloom" peanuts available today.

"The issue with peanuts typically is that they need a lot of drainage to produce really well," Barron said. "With our predominantly clay and chert soil, it's typically not [ideal]."

Mary Farley, of Dunlap, Tenn., is a lifelong gardener who walked away from the Sequatchie County Fair this summer with more than 30 blue ribbons for her produce.

Growing peanuts is "really better in sandy soil," she said. "They're like a potato. If the dirt gets hard around them, they won't grow."

Andrea Jaeger, administrative intern at Crabtree Farms, planted some raw peanuts from the grocery store in a corner of her garden at home.

"They have been growing. We haven't harvested them, yet," Jaeger said. "We'll probably get a small batch of them."

about Tim Omarzu...

Tim Omarzu covers education for the Times Free Press. Omarzu is a longtime journalist who has worked as a reporter and editor at daily and weekly newspapers in Michigan, Nevada and California.

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