United States Congressman Ted Yoho recently convened a town hall style forum with North Florida farmers and agribusinesses to discuss the recently passed Farm Bill. The meeting was a result of many area stakeholders contacting the Congressman to discuss the ramifications of the new law on their livelihood. The concerns of these farmers are basically two-fold. First, it restricted base acres to those which existed prior to the passage of the Farm Bill. This in effect “locked out” the area farmers from the safety net programs contained in the law. It also eliminated cotton base and established a “generic” base on which any program commodity crop can be planted and receive the benefits of the safety net programs. The second major change was the change from a “Target Price” for peanuts at $495/ton to a “Reference Price” at $535/ton. The concern of most peanut farmers is that the reference price for peanuts is about 25% above the current cash market price. Conversely, competing crops such as soybeans, corn, and wheat have a reference price about 25% below the cash market.
Total Base Acres in Major Peanut States. Source, Peanut Farm Market News 2014 (29)
The combination of these changes results in a large number of acres eligible to plant to peanuts which will receive the “safety” net set forth in the Farm Bill if peanut prices are low. Area farmers are very concerned the combination of these changes will result a severely depressed peanut market where they must compete on price alone, while the rest of the nation could continue a cycle of overplanting because of the safety net programs. Their greatest concern was for the investments they have made in land, equipment, and peanut facilities. Congressman Yoho voiced concern that if these changes result in overplanting, the expense of the new insurance programs and the high reference price of peanuts could place a large economic burden on the Federal government. There was overwhelming concern among farmers and agribusiness that the Reference Price and safety net of peanuts will lead to overproduction because of skewed market dynamics.
The recent changes have led to a large number of media outlets covering the topic and many discussions among farmers. The National Center for Peanut Competitiveness recently published a summary of the expected effects on the peanut industry. 2014 Farm Bill Does Wall to Wall Potential Exist NCPC
Several media pieces are linked below for your review.
Peanut Farmers Meet Ted Yoho WCJB