By Clint Thompson
Alabama and Florida peanut producers reunited on Thursday in Dothan, Alabama for their annual trade show event. At the forefront of farmers’ minds ahead of planting this year’s crop are the extremely high input costs.
Jacob Davis, executive director of the Alabama Peanut Producers Association said growers are trying to hit a moving target with locking down input expenses. Prices continue to rise.
“Every time they check on input costs, they get a different price. It seems like it’s going up. For them to make planting decisions and know where they are economically on what the futures are for other commodities, they’re trying to look to see if they can break even on the crop or make a profit possibly. It’s hard to do that when you’re trying to hit a moving target,” Davis said. “If it was more fixed like traditional years, then they could make better decisions. This year’s going to be pretty unique and challenging for them.”
How High Are Costs?
Fertilizer prices for nitrogen, phosphorous and potassium are especially high and may not come down until next summer or fall, estimates Glen Harris, University of Georgia (UGA) Professor and Extension Agronomist in Environmental Soil and Fertilizer. Nitrogen prices are 95 cents per pound, compared to 50 cents in 2020. Phosphorous costs are 67 cents per pound, compared to 40 cents in 2020. Potassium expenses are 68 cents per pound, compared to 34 cents in 2020.
“Across the peanut belt, inputs projected for ’22 are not pretty. You’re hearing it in other commodities, in specialty crops to all the row crops, South and Midwest. That’s the main discussion now,” said Bob Redding, who works for the Redding Firm and serves as a lobbyist for agricultural groups in Washington, D.C. “What do we do? The current programs don’t address that. Is this a unique event where it happens in ’22 and doesn’t ever happen again and prices all come down? That’s not the history of pricing. The input piece, what does this mean and how do we adjust these programs? That’s what our economists are working on right now.”
Farmers remain optimistic, however, says Ken Barton, executive director of the Florida Peanut Producers Association.
“I can tell you there’s growing optimism within the farming community that we do have some better pricing for commodities. And there’s optimism that these input costs will moderate some by the time we need to start buying the bulk of those products,” Barton said.