Kyle Dean, Host: We are back here on WTIF. It is 9:41 on this Monday morning and it is time for Market Monday, our UGA Tifton Farm Chat. Joining us in studio is Nathan Smith. Nathan, good to have you back with us.
Nathan Smith, UGA Tifton Peanut Economist: Good morning Kyle; good to be here.
Kyle Dean, Host: It's good to talk to you once again about peanuts, corn, soybeans. We mostly talk with you about peanuts but corn and soybeans have kind of been in the news a little bit this week and last week as well.
Nathan Smith, UGA Tifton Peanut Economist: Yep, it's planting time in the mid-west for corn and soybeans. They are a little bit ahead of schedule but as you talked with the last couple weeks with the planting intentions report [Dean: Right.] that has had some implications on what prices have done and what growers are going ahead in their planting decisions.
Kyle Dean, Host: And remind folks out there that maybe not understand how big corn and soybeans are, especially to the mid-west. They are to the mid-west what cotton and peanuts are to the south, right?
Nathan Smith, UGA Tifton Peanut Economist: Yes, corn and soybeans are the...If you are a farmer, that's what you pretty much are in row crops out in the mid-west certainly why we call it the corn belt. But corn, their planting decisions basically come down to, “Am I going to plant corn after corn this year or am I going to rotate with soybeans?” [Dean: Got you.] It will be some areas that have wheat, but that's more on the arid areas than right there in the mid-west.
Kyle Dean, Host: To a lesser degree as corn and soybeans are both seen in the south, remind folks of the Georgia numbers as well. We are not a big player, but we do get our acreage in corn and soybeans.
Nathan Smith, UGA Tifton Peanut Economist: That's right. We certainly have the option to plant corn and soybeans in Georgia. But as far as acres go, corn kind of fits into the rotation with cotton and peanuts particularly if you have irrigation. That's a nice crop to have in rotation to help with improving yields on peanuts. We try not to bring soybeans into the mix if you are growing peanuts because you got 2 legumes there and you start running into issues with disease and so forth. But in parts of Georgia, soybeans are still strong. We’ve got pretty good infrastructure when you look at it from that stand point. We got the mill, the ADM Oil Seed Mill, down in Valdosta; in Gainesville, Georgia is another mill. There is even 1 in South Carolina, but pretty much anything produced here is going to go to 1 of those 2 mills in terms of soybeans. Corn is going to be fed to the poultry industry all through the state. So, we are a grain deficit state.
Kyle Dean, Host: No question. The acreage or the planting intentions report says that both corn and soybeans are going to be down. But we talked with Don Shurley last week. We know cotton is going to be down as well. Where is the jump from acreage going to be seen mostly? Is it peanuts?
Nathan Smith, UGA Tifton Peanut Economist: Yes. When you see where the cotton acres are going, it's mainly peanuts; little bit of increase in sorghum and oats, but the intentions then show it going to corn. Corn is essentially the same as last year, maybe down 5,000 acres to 340,000 planted was the indication by growers. A lot of those acres have already been planted. We are about 2 weeks ahead as scheduled on planting this year in corn and nationally too, is 1-2 weeks ahead. So, soybeans are probably down a little bit from last year too. Although that may change since the report's come out showing fewer acres nationally on soybeans and prices have been up on soybeans because of South America production issues. Their crop has kept getting smaller and smaller as the year goes.
Kyle Dean, Host: We are talking with Nathan Smith about corn, soybeans and peanuts here on our UGA Tifton Farm Chat Market Mondays. And of course, peanuts are huge in Georgia. You say planting intentions report in your email to me says 1.422 million acres. We see that this is one of the biggest crops out there. Peanuts are huge to our area. We were talking off the air, Nathan, about if we see a good rain this week, we might see peanuts going in the ground pretty soon after.
Nathan Smith, UGA Tifton Peanut Economist: Yes, there have been some early peanuts planted. We don't have any numbers on those yet with the crop progress that usually comes out on Monday afternoons. But with the dryness, the drought's coming back to hit us right now. It's been dry lately, but as soon as we get a decent rain and there is some forecast for chance of rain the middle of this week. I think that Dr. Beasley has been sending out notices to the counties and county agents that once we got pass Easter, it’s okay to move ahead or start planting. So, I think soon as we get a decent rain, planters are going to be going wide open on peanuts and everything else.
Kyle Dean, Host: So, with our intentions up 20% here in Georgia and also nationally up 25%, what does that do to the supply situation and pricing?
Nathan Smith, UGA Tifton Peanut Economist: Well, if everything comes out as projected in the planting intentions, little more than 1.4 million acres planted in the U.S. will certainly fill back up the pipeline probably increase our carry over at least 200,000 tons. So, that will be sufficient in terms of carrying over into the 2013-14 marketing year. Now, the big concern this year is having enough peanuts to meet demand as we get into summer and before this crop that's about to be planted comes off, is picked out of the fields and delivered to the shelling plants. So I think some of the earlier peanuts that are planted are going to maybe help narrow that a little bit. But, we are still going to be getting tighter as we finish out this crop year or marketing year. But then this increase, 25% increase in the U.S. and 20% increase in Georgia, is going to add a good bit of buffer, I guess, to the supply for peanuts.
Kyle Dean, Host: Are we seeing any other states have that big gain like we see in Georgia at 20%?
Nathan Smith, UGA Tifton Peanut Economist: Yes. Actually our neighboring states have increased more than Georgia as far as percentage. Florida maybe not percentage wise, but they are at basically their record yield or record acres in many, many years. Alabama up over 200,000 to 210, South Carolina at 105, actually going to plant more than North Carolina based on those numbers so; Mississippi trying to almost triple their acres so. Yes, we are seeing in the southeast a response to the higher peanut prices.
Kyle Dean, Host: I know you guys watch numbers. And when we were talking with Don, you know every other state in the southeast was losing percentage except South Carolina. They were gaining some acreage according to the planting intentions in cotton and you see negative numbers then all of a sudden you see plus 2% and you're like why is this happening? Why are we seeing this? Of course, we know why that cotton is losing acreage and we just going to see those other states gain, but typically you see Georgia and I think North Carolina's usually a pretty big player in peanuts as well. Why are we seeing these numbers increase as a whole you think?
Nathan Smith, UGA Tifton Peanut Economist: I think what you are saying is a little bit of effect is just more acres are being brought into production and we've seen a lot more irrigation going in and I think that's a similar situation in South Carolina. So, with the type of prices we've seen in the last 2 or 3 years, we're really starting back 2008, but particularly the last 2 years, we are seeing a little more land come back in to production particularly as CRP contracts expire. But as they put in irrigation, going ahead and clearing out a little bit more of the corners and stuff to get maximize basically the use of their land for crops.
Kyle Dean, Host: Nathan, again we thank you for dropping by on our Market Monday and giving us an update on peanuts, soybeans and corn. We'll see you again in 3 weeks.
Nathan Smith, UGA Tifton Peanut Economist: Thank you, Kyle, enjoyed it.
Kyle Dean, Host: Alright we'll be back right after this on WTIF.