|
About The Peanut Industry
Peanuts - A Brief History
Peanut Types and Production 
Peanut Producing Areas
Growing and Harvesting
Shelling and Grading
Custom Products and Processing
Value-Added Products
U.S. Peanut Supply
Export Markets
U.S. Quality Control and Research
Current Legislation
Peanuts - A Brief History
The peanut, while grown in tropical and subtropical regions throughout the world, is native to the Western Hemisphere. It probably originated in South America and spread throughout the New World as Spanish explorers discovered the peanut’s versatility. When the Spaniards returned to Europe, peanuts went with them. Later, traders were responsible for spreading peanuts to Asia and Africa. The peanut made its way back to North America on sailing ships in the 1700’s. Although there were some commercial peanut farms in the U.S. during the 1700’s and 1800’s, peanuts were not grown extensively. This lack of interest in peanut farming is attributed to the fact that the peanut was regarded as food for the poor and because growing and harvesting techniques were slow and difficult. Until the Civil War, the peanut remained basically a regional food associated with the southern U.S.
After the Civil War, the demand for peanuts increased rapidly. By the end of the nineteenth century, the development of equipment for production, harvesting and shelling peanuts, as well as processing techniques, contributed to the expansion of the peanut industry. The new twentieth century labor-saving equipment resulted in a rapid demand for peanut oil, roasted and salted peanuts, peanut butter and confections.
300 Uses
Also associated with the expansion of the peanut industry is the research conducted by George Washington Carver at Tuskegee Institute in Alabama at the turn of the twentieth century. The talented botanist recognized the intrinsic value of the peanut as a cash crop. Dr. Carver proposed that peanuts be planted as a rotation crop in the cotton-growing areas of the Southeast where the boll weevil insect threatened the region’s agricultural base. Not only did Dr. Carver contribute to changing the face of southern farming, but he also developed more than 300 uses for peanuts, from recipes to industrial products.
Government Involvement
The U.S. government instituted agricultural support programs in the early 1900’s to promote the production of important food crops, including peanuts. Today, the production of peanuts is overseen by the U.S. Department of Agriculture under the auspices of farm legislation adopted by the U.S. Congress in 2002.
Back to Top
Peanut Types and Production
Seven states account for approximately 99% of all peanuts grown in the U.S. Georgia (41%) grows the major proportion of all peanuts followed by Texas (24%), Alabama (10%), North Carolina (9%), Florida (6%), Virginia (5%), and Oklahoma (5%). There are approximately 25,000 peanut farmers in the major producing regions.
The peanut growing regions of the U.S. have direct access to port facilities of the Atlantic Ocean and the Gulf of Mexico.
U.S. peanuts fall into four basic types: Runner, Virginia, Spanish and Valencia. Each of these peanuts is distinctive in size and flavor.
Runner
Runners have become the dominant peanut type grown in the U.S. due to the introduction in the early 1970’s of a new variety, the Florunner, which was responsible for a spectacular increase in peanut yields. Runners have rapidly gained wide acceptance because of their attractive kernel size range; a high proportion of runners are used for peanut butter. Runners, grown mainly in Georgia, Alabama, Florida, Texas and Oklahoma, account for 80% of total U.S. production.
Virginia
Virginias have the largest kernels and account for most of the peanuts roasted and eaten as inshells. When shelled, the larger kernels are sold as salted peanuts. Virginias are grown mainly in southeastern Virginia and northeastern North Carolina and West Texas. Virginia-type peanuts account for about 15% of total U.S. production.
Spanish
Spanish-type peanuts have smaller kernels covered with a reddish-brown skin. They are used predominantly in peanut candy, with significant quantities used for salted nuts and peanut butter. They have higher oil content than the other types of peanuts which is advantageous when crushing for oil. They are primarily grown in Oklahoma and Texas. Spanish-type peanuts account for 4% of U.S. production.
Valencia
Valencias usually have three or more small kernels to a pod. They are very sweet peanuts and are usually roasted and sold in the shell; they are excellent for fresh use as boiled peanuts. Because of the greater demand for other varieties, Valencias account for less than 1% of U.S. production and are grown mainly in New Mexico.
Back to TOP
Peanut Producing Areas
|
Peanuts: Harvested, Yield and Production by State and United States
2005- 2007
|
|
|
Area Harvested
|
Yield
|
Production
|
|
|
|
|
|
|
|
1,000 Acres
|
Pounds
|
1,000 Pounds
|
|
|
|
|
|
|
|
2005
|
2006
|
2007
|
2005
|
2006
|
2007
|
2005
|
2006
|
2007
|
|
Alabama
|
223
|
163
|
157
|
2,750
|
2,500
|
2,600
|
613,250
|
407,500
|
408,200
|
|
Florida
|
152
|
120
|
119
|
2,700
|
2,500
|
2,700
|
410,400
|
300,000
|
321,300
|
|
Georgia
|
750
|
575
|
520
|
2,840
|
2,750
|
3,150
|
2,130,000
|
1,581,250
|
1,638,000
|
|
Mississippi*
|
14
|
16
|
18
|
3,200
|
3,000
|
3,300
|
44,800
|
48,000
|
59,400
|
|
New Mexico
|
19
|
12
|
10
|
3,500
|
3,600
|
3,500
|
66,500
|
43,200
|
35,000
|
|
N. Carolina
|
96
|
84
|
90
|
3,000
|
3,200
|
2,800
|
288,000
|
268,800
|
252,000
|
|
Oklahoma
|
33
|
22
|
17
|
3,270
|
3,000
|
3,400
|
107,910
|
66,000
|
57,800
|
|
S. Carolina
|
60
|
56
|
56
|
2,800
|
3,100
|
3,100
|
168,000
|
173,600
|
173,600
|
|
Texas
|
260
|
145
|
187
|
3,750
|
3,700
|
3,950
|
975,000
|
536,500
|
738,650
|
|
Virginia
|
22
|
17
|
21
|
3,000
|
3,100
|
2,700
|
66,000
|
49,600
|
56,700
|
|
United States
|
1,629
|
1,210
|
1,195
|
2,989
|
2,874
|
3,130
|
4,869,860
|
3,474,450
|
3,740,650
|
* Estimates began in 2005
Source: USDA, NASS
Back to TOP
Growing and Harvesting
 Peanuts are the seeds of an annual legume, which grows close to the ground and produces its fruit below the soil surface. U.S. peanuts are planted after the last frost in April or May when soil temperatures reach 65–70° Fahrenheit (20° Celsius). Pre-planting tillage ensures a well-prepared seedbed. Seeds are planted one and half to two inches (four to five centimeters) deep, one every two to four inches (5–10 centimeters) in the Southeast and Southwest, and four to six inches (10–15 centimeters) in the Virginia-Carolina area, in rows about three feet (one meter) apart. The row spacing is determined to a large extent by the type of planting and harvesting equipment utilized.
Peanuts may be cultivated once or twice (depending on region) to control broadleaf weeds and grasses. A climate with 200 frost-free days (175 days for Spanish varieties) is required for a good crop. Warm weather conditions, adequate moisture, and fertile, sandy soil result in the appearance of peanut leaves in 10–14 days after planting. Farmers generally follow a three-year rotation pattern with cotton, corn or small grains planted on the same acreage in intervening years to reduce disease problems. In addition, many farmers utilize irrigation in an effort to reduce crop stress and thereby enhance opportunities for the production of high quality peanuts.
Integrated pest management is utilized in order to control weeds, diseases, and insects. Diseases caused primarily by several fungal organisms are particularly troublesome and generally require chemical control. Weeds are controlled using either chemical or mechanical methods or a combination of the two.
The peanut harvesting process occurs in two stages. Digging, which is the first stage, begins when about 70% of the pods have reached maturity. At optimum soil moisture, a digger proceeds along the rows of peanut plants driving a horizontal blade four to six inches (10–15 centimeters) under the soil. The digger loosens the plant and cuts the taproot. A shaker lifts the plant from the soil, gently shakes the soil from the peanut pods and inverts the plant. A windrow of inverted plants results and this exposes the pods to the sun. The peanuts are now ready for the second phase of the harvest — combining. After drying in the field for two or three days, a peanut combine (also known as a thresher) separates the pods from the vines, placing the peanut pods into a hopper on the top of the machine. The vines are returned to the field to improve soil fertility and organic matter. Freshly harvested peanut pods are then placed into drying wagons for further curing with forced hot air slowly circulating through the wagons. In the curing process, moisture content is reduced to 8–10% for safe storage.
Back to Top
Shelling and Grading
 After proper curing, farmers' stock peanuts (harvested peanuts that have not been shelled, cleaned or crushed) are inspected and graded to establish the quality and value of the product. The inspection process determines the overall quality and on-farm value of the shelled product for commercial sales or price support loans.
The inspection and grading of peanuts by the Agricultural Marketing Service of the U.S. Department of Agriculture (USDA/AMS) occurs at buying stations or shelling plants usually located within a few miles of where the peanuts have been harvested. A pneumatic sampler withdraws a representative quantity of peanuts from the drying wagon, and from this sample the USDA inspector determines the meat content, size of pods (for Virginia &Valencia), damaged kernels, foreign material, and kernel moisture content. Once the grade is established, the loan or commercial value is determined from USDA price support schedules.
After grading, peanuts move on to the shelling process. In the first step of this process, peanuts are cleaned -- stones, soil, bits of vines and other foreign materials are then removed. The cleaned peanuts move by conveyor to shelling machines where peanuts are de-hulled as they are forced through perforated grates. The peanuts then pass through updraft air columns that separate the kernels from the hulls. Specific gravity machines separate the kernels and the unshelled pods. The kernels are then passed over the various perforated grading screens where they are sorted by size into market grades.
The edible nuts are individually inspected with high-speed electronic color sorting equipment that eliminates discolored or defective kernels as well as any remaining foreign material.
Inshell peanuts are usually produced from large Virginia or Valencia type peanuts that have been grown in sandy and light-colored soil for bright hulls. Sizing screens remove the small pods while updraft air columns remove very immature and lightweight pods. The largest remaining pods are separated into size categories by screens. Stems are removed and any remaining immature pods are removed by specific gravity. Electronic sorters then remove dark, cracked, or damaged pods so that only the most mature, brightest pods remain.
Back to Top
Custom Products and Processing
Over the past several years, United States processors and manufacturers have greatly expanded the range of specialized products available. American processors can meet individual specifications and can offer many new and interesting products which incorporate flavors, coatings and processes. These products are available in bulk, institutional and consumer sizes. Peanut butter, roasted and flavored kernels, roasted and sized peanut granules, and salted inshell peanuts, peanut flour, peanut oil (both refined and crude) and aromatic oil and extract are all available from U.S. shellers, blanchers and manufacturers.
Utilizing modern techniques, custom processors are able to provide their customers with a range of services, including:
Blanching
U.S. technological advances have meant that blanched peanuts offer better quality including fewer splits, less foreign material, and greater uniformity of flavor and color.
Cleaning and Sizing
Greater uniformity is provided through the removal of defects, foreign material, and additional sizing.
Flavoring
Customized coatings can be developed for whole or split peanuts.
Back to Top
Value-Added Products
New value-added products have been developed which have a number of applications including bakery, confectionery and the general consumer
market.
Among these are:
Peanut Flour
Made from raw peanuts which have been cleaned, blanched and electronically sorted to select the highest quality peanuts, the nuts are then roasted and naturally processed to obtain a lower fat peanut flour with a strong roasted peanut flavor.
Peanut flour is used in confectionery products, seasoning blends, bakery mixes, frostings, fillings, cereal bars and nutritional bars. Because the flour is partially defatted, it works well as a fat binder in applications such as confection centers. Using peanut flour at a level of 4-8% in a formulation has been found to extend the shelf life of confections and can contribute a peanut flavor to the product. Peanut flour, because of its high protein content (45%-50%), is a good protein source in addition to its function as a flavoring agent.
Peanut Oil
Peanut oil is extracted from shelled and crushed peanuts by one or a combination of the following methods: hydraulic pressing; expeller pressing; and/or solvent extraction.
Highly aromatic 100% peanut oil and peanut extract also are available. These products have a strong roasted peanut flavor and aroma. Suggested applications for these products include flavoring compounds, confections, sauces and baked goods.
Roasted Peanuts
Roasted peanuts are available in several different packages and roast variations. Different coatings can be applied to the peanuts prior to and after roasting to provide a variety of products including such flavors as honey, smoked, sweet, hot and spicy, and salty.
Peanut Butter
A variety of different peanut butter products is currently available. Peanuts are roasted, blanched and sorted before grinding into a creamy consistency. Peanut butter produced in the U.S. contains a minimum of 90% peanuts; sweeteners and salt can be added to enhance flavor while small amounts of stabilizers are used to prevent oil separation. The small amount of stabilizer used does not contribute trans fatty acids to the product. Peanut pieces can be added to provide a crunchy style. Custom formulations also can be developed to modify the texture or sweetness or to add flavoring.
Reduced fat peanut butters are also available which provide a fat reduction of at least 25%. Several different varieties are sold for both consumer and industrial use with varying peanut content depending on the flavor and consistency of the product needed. Other modified formulations for peanut butter, peanut spreads and peanut paste are available from most manufacturers.
Peanut butter is available in consumer-ready packaging or in institutional/catering containers for use in bakery and confectionery products.
Peanut paste, which is 100% ground peanuts, is used in a variety of industrial food recipes and is available from processors.
Back to Top
U.S. Peanut Supply
 Unlike other countries where the end products are peanut oil, cake and meal, the prime market for U.S. peanuts is in edible consumption, and the marketing and production focus is in that direction. Only 15% of U.S. production is normally crushed for oil. Peanuts are the 12th most valuable cash crop grown in the United States with a farm value of over one billion U.S. dollars.
Most of the U.S. peanut crop is used in domestic edible products each year. Peanuts, peanut butter and peanut candy are some of the most popular products in the United States. American consumers eat more than 6 pounds or 2.7 kilograms (kernel basis) of peanut products each year, worth more than $2 billion at the retail level.
Peanut butter accounts for approximately half of the U.S. edible use of peanuts — accounting for $850 million in retail sales annually. It is a popular sandwich spread, particularly for children, and it is both nutritious and economical. Peanut butter is high in plant protein, contains no cholesterol, and has many important vitamins and minerals, including niacin, vitamin E and other antioxidants, and natural folic acid.
The other half of U.S. edible consumption is divided equally between snack nuts and confectionery. Peanuts are consumed as snack nuts in a variety of ways: roasted inshell, roasted kernels, or in mixed nuts. Snack nuts often are salted, spiced, or flavored with a variety of coatings.
New research funded by The Peanut Institute shows that daily consumption of peanuts may have favorable effects on consumer health. This research includes prevention of heart disease and the promotion of weight-loss and maintenance.
Many of the top-selling confectionery products in the U.S. contain peanuts or peanut butter. They are most popular in combination with chocolate. Peanuts and peanut butter also are used in a variety of cookies and baked goods. Peanut oil is considered a premium, high quality cooking oil in the U.S., is able to withstand higher cooking temperature than many other oils and does not retain the flavor of foods cooked in it.
Back to Top
Export Peanut Market
World peanut production totals approximately 29 million metric tons per year, with the U.S. being the world’s third largest producer, after China and India. Worldwide peanut exports are approximately 1.25 million metric tons. The U.S. is one of the world’s leading peanut exporters, with average annual exports of between 200,000 and 250,000 metric tons. Argentina and China are other significant exporters, while origins such as India, Vietnam, and several African countries periodically enter the world market depending upon their crop quality and world market demand.
Canada, Mexico and Europe account for over 80% of U.S. exports. The largest export markets within Europe are the Netherlands, the U.K., Germany, and Spain.
Demand for peanuts in North America and Europe has been steady, although competition within a dynamic snack market continues to put pressure on peanuts to compete with a growing range of products (potato chips, extruded snacks, tree nuts, and baked snacks). In addition, quality specifications, food safety concerns and import requirements continue to require the implementation of improved monitoring and quality control standards at origin. In response to customer demands, U.S. producers, shellers and processors implement oversight and inspection procedures at each stage of production to ensure that the highest quality standards are achieved.
Back to Top
U.S. Quality Control and Research
 Consumers throughout the world are concerned about consistently obtaining flavorful, wholesome peanuts that are uniform in size and free from foreign material and contamination. The U.S. peanut industry continues to invest heavily in plant modernization and the latest designs in automated cleaning, shelling, testing, and sorting equipment to ensure that all buyers receive the best possible product. U.S. government inspectors monitor processing at each stage of the peanut's journey from the farm to the manufacturer and to the grocery shelf in the case of domestic production.
The Peanut Standards Board
The Peanut Standards Board is comprised of nine growers and nine industry members representing each of the three production areas. Under the provision of the Minimum Quality and Handling Standards Agreement, peanuts are subject to strict quality standards that are enforced by USDA and Federal-State inspectors. These inspectors supervise, inspect and grade peanuts from delivery at buying points to shipment from shelling plants.
Strictly enforced government regulations ensure that U.S. peanuts are of consistently high quality. In addition, comprehensive lot identification systems enable peanuts to be tracked throughout their various stages of processing until final delivery to a domestic processor or export customer. The U.S. peanut industry is committed to providing the highest quality peanuts in the world. Toward this end, they engage in testing procedures throughout the shelling process. These tests enable them to meet the stringent specifications of their customers as well as the U.S. Government standards.
Research Improves Yield and Quality
Due to the emphasis on production of edible peanuts, both the government and the industry allocate a considerable amount of time and money to peanut research to produce a high-quality food item. The focus of the research includes seed breeding for higher yields, higher quality, lower levels or no aflatoxin, better flavor and shelf life, more disease resistance, and mitigation of allergenic reaction.
The peanut industry in 1988 formed The Peanut Foundation. The Foundation has been instrumental in reducing peanut production costs, improving peanut quality and increasing the product safety of peanuts. Additionally, it is involved in helping to coordinate peanut research currently conducted by government and university researchers. Additional research funding from USDA, State Grower Organizations, and the National Peanut Board gives the U.S. a strong base in peanut research.
Back to Top
Current Legislation
The 2002 Farm Bill changed the peanut program drastically. A two-tiered price system with quota peanuts (sold in the domestic market) and additionals (sold in the export market) was ended and replaced with a market/loan system. Under the new system there is no distinction between peanuts for the domestic and export market.
Base
A base has been established for historic peanut producers who farmed peanuts at any time between1998-2001. The base for the historic peanut producer is the payment yield multiplied by the base acreage. The payment yield is equal to the producer’s 1998-2001 total production divided by the 1998-2001 total acreage. The base acreage is equal to the 1998-2001 total acreage divided by four. The base will be with the historic peanut producer for 2002 and then must be assigned to land no later than March 31, 2003. If the land already has 100% base then there will have to be a release of other bases in order to put peanut base on the land as bases are capped at 100%. A producer may also choose to substitute the 1990-97 county average yield for up to three years of the 1998-2001 base period farm yields. The base payments are totally decoupled from the production of peanuts on the farm. Base payments for peanuts can be made on farms planted in other eligible commodities or practices. Exceptions include Conservation Reserve Program (CRP) or other paid conservation programs, newly established vegetable enterprises, and wild rice.
Direct Payment
A $36 direct payment will be made to the historic peanut producer in 2002 and producers of a farm with a base in subsequent years. This payment will be calculated by taking the farm base and multiplying it by 85% and then multiplying that result by the $36 per ton. This is the only guaranteed federal payment.
Target Price
A target price of $495 has been set for the purposes of calculating the counter cyclical payment.
Counter Cyclical Payment
A counter cyclical payment will be made to the producer when the market prices fail to achieve the target price of $495. Counter cyclical payment will be made to the historic peanut producer for 2002 and to the producers on a farm with peanut base in subsequent years. To calculate the counter cyclical payment for a farm, take the base and multiply it by 85%. Take that result and multiply it by the difference between the target price and the sum of the higher of the following, either the average season price plus the direct payment or the marketing loan rate plus the direct payment. Formula: Counter cyclical payment = $495 - $36/ton (Average Season Price or National Loan Rate, whichever is higher) x Base Acreage X 85% x Payment Yield.
Quota Buyout
Quota is bought out at 11 cents per pound per year for five years, but the quota holder has the option to take a one-time payment of 55 cents. Several economists have made the case that this buyout is subject to capital gains taxation so there may be no benefit to taking the spread out payments.
Marketing Loan
A marketing loan is established with a loan rate of $355. This is the only support on the actual production of the commodity and is available on all tons of peanuts produced. A producer can forfeit his peanuts under the loan or if the market moves higher he may choose to redeem his peanuts and sell them in the commercial market. Also, the Secretary of Agriculture can choose to lower the repayment rate to avoid the chance of paying storage on forfeited peanuts.
Loan Deficiency Payment
LDPs will be paid to producers who opt to forgo participating in the loan program. LDP’s will be paid based on world market pricing factors. The producer must maintain beneficial interest in the crop prior to receiving a loan deficiency payment.
Storage and Handling
The law provides that the Secretary to cover all storage and handling charges on loan peanuts to ensure that the loan rate provides the desired level of support with no hidden charges.
Back to Top
Standards for U.S. Peanuts
All U.S. peanut handlers are obliged to follow the provisions set forth in the Minimum Quality and Handling Standards for Domestic and Imported Peanuts Agreement. This program is administered jointly by The Peanut Standards Board (18 member industry committee) and USDA’s Agriculture Marketing Service (AMS). The Peanut Standards Board recommends the incoming and outgoing quality standards and regulations on all peanuts that handlers buy for commercial use. The Secretary of Agriculture is charged with implementing these recommendations.
Incoming quality standards require all handlers to officially inspect farmers’ stock peanuts and certify them as to mold, damage, moisture content, and foreign material. The outgoing regulations, applied after peanuts are milled, require all peanuts to meet specific quality factors and be analyzed for aflatoxin. Specifications for U.S. peanuts are modified as needed, based on developments within the industry.
U.S. standards – administrered and overseen by the Peanut Standards Board and USDA/AMS –establish the minimum specifications which U.S. peanuts must meet. Stricter tolerances for certain grades and sizes have also been established by the American Peanut Shellers Association (APSA).
Peanuts traded under APSA Rules can be on either a screen size or on a count per ounce basis (usually the case with export peanuts). If sold on a count basis peanuts do not fall specifically in the categories indicated on the following grade charts and therefore should not be expected to conform exactly to these standards..
|