Brave new world of peanut marketing

First let’s review the old system. For starters, we had allotments and established prices for what farmers grew on their allotments. Then the government changed its mind about allotments and switched to quota, which meant you either had inherited or bought a certain number of pounds that you could plant on your farm, even when you had allotments.

You could produce more than you had quota for, if you were a mind to, but the set price for quota was better than $600 per ton and the set price for those other peanuts was about $125, give or take a few.

Now these other peanuts, which some farmers had because they simply made too good a crop and couldn’t even help themselves from busting their quota, were called, at one time or another, non-quota, which makes sense, or additionals, which also makes some sense if you consider that these peanuts were over and above what you had quota for and were usually priced so low they hardly deserved to be named at all.

A lot of producers made non-quota peanuts work, however, simply because they could grow lots of them and pretty cheaply, and they generally did a stand-up job of selling them on contract before they put a plow in the ground.

The government, being the government and apt to change something simply because it could, switched the program around about every chance it got and made it so a farmer in one county could transfer his quota to a farmer in another county and not get jailed for it.

That’s when a bunch of peanuts ended up in West Texas and a bunch left the central and eastern parts of the state. But even then folks could still plant quota and get a guaranteed price. Or they could plant non-quota and get a non-guaranteed price.

That system rocked on for a few years until the government, still being the government, decided to do away with quotas and let every Thomas, Richard and Harrison plant peanuts if they wanted to, and they could participate in a special government program – if they had a base. I never did understand that base business so I will not attempt to explain it.

The upshot of this last change, however, is that peanut farmers no longer have an absolute guaranteed price of better than $600 per ton for quota or whatever they could get for non-quota. They do have a target price of $355 per ton. But they can grow a lot more peanuts, if they have base enough and time.

And this is where it gets confusing. You thought it was already messed up, didn’t you? Well it gets worse.

Now farmers have to look at a pocketful of possibilities. For instance, the price of peanuts is linked to the National Posted Price, NPP. From that, the government, being the government and being able to do things like this, set a loan rate, LR, which currently is $355 per ton. But growers may also qualify for a loan deficiency payment, LDP, and a Marketing Loan Gain, MLG, but a lot of that has to be approved by the Farm Service Agency, FSA, which has forms to fill out, CCC-709 or FSA-111, depending on whether the grower sells the peanuts himself or turns them over to a Certified Marketing Association or CMA.

The CMA does all the FSA paperwork for the grower, which is a good thing. They also explain all the acronyms, which is an even better thing. Oh, I almost forgot, they also get a direct payment or DP, which I always thought was an abbreviation for double play, but I could be wrong.

And all this time farmers need to be aware of hanging onto their beneficial interest so they qualify for all those acronyms.

Finally there is the MLB, the NFL and the NBA, which are only loosely associated with peanuts since you can buy a little bitty bag of in-shells at their various stadiums and arenas for about $5 for 37 peanuts.

So, in a nutshell, so to speak, here is how it works: A peanut farmer produces peanuts on his base, which I will still not try to explain. He can then get his LR, which is based on the NPP, and maybe get a buyer premium (BP), along with the LDP and a MLG, and a DP after he fills out CCC- 709. Or he can use a CMA, fill out a FSA-111 and let CMA take care of the LR, the NPP, the LDP, the MLG, and the DP and send the products along to the MLB, NFL and NBA, where I’ll plunk down some hard earned cash to procure beneficial interest in about 37 peanuts and munch while I contemplate the universe.

Y’all don’t need to thank me.

e-mail: [email protected]

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.