Tuesday, February 27, 2024

Peanut Industry Well Represented In Farm Bill Hearings

The U.S. House Agriculture Subcommittee on General Farm Commodities, Risk Management and Credit held a hearing on Tuesday, April 26, entitled “Producer Perspectives on the 2023 Farm Bill.” Representing the U.S. Peanut Federation was Daniel McMillan of Southern Grace Farms in Enigma, Georgia.

In McMillan’s testimony, he presented peanut priorities for the 2023 Farm Bill, namely an increase in the reference price for the Price Loss Coverage program. He outlined the financial stressors that peanut growers are facing on the farm.

“In my home area, we saw fertilizer costs double from 2021 to 2022. Some products tripled in price. Currently, fertilizer prices are changing week to week preventing us from making informed management decisions.”

Effects Of Inflation And Higher Costs

McMillan also voiced the support of the U.S. Peanut Federation for a voluntary base update that includes growers with and without peanut base acres. While the 2014 Farm Bill allowed for base updating for peanut growers that already had base on their farms, it excluded many young farmers and new production areas.

Daniel McMillan

Subcommittee Chairman Austin Scott (R-GA) opened the hearing, saying, “Title I programs, specifically the Agricultural Risk Coverage and Price Loss Coverage, or ARC and PLC, were established in the 2014 Farm Bill and the reference prices used to determine assistance were set using 2012 cost of production data. Meanwhile, inflation has gone up significantly since 2012, and the price of most inputs have doubled or even tripled since 2021 alone. Farm sector debt is at record-high levels, and net farm income is expected to fall 16% from 2022 to 2023. These warning signs underscore the importance of our work in the 2023 Farm Bill.

Senate Hearing

The U.S. Senate Agriculture Subcommittee on Commodities, Risk Management and Trade held a hearing on Tuesday, May 2, 2023, entitled “Commodity Programs, Credit and Crop Insurance – Part 1: Producer Perspectives on the Farm Safety Net.” Representing the U.S. Peanut Federation was Karla Thompson of JET Farms and Integrity Farms in Camilla, Georgia.

Karla Thompson

Thompson’s testimony also emphasized including an increase in the reference price for the PLC program. Inflation on key farm inputs, including fuel, fertilizer and labor, have all contributed to the rising cost of production. 

Thompson said, “On our farm alone, many of our expenses have almost doubled since 2018. Our fertilizer costs absolutely skyrocketed. We need certain fertilizers to sustain the right nutrient levels in the soil, both for the peanuts we are growing in any given season and to protect the land for the future. In the past few years, we have experienced seasons where we could barely obtain the necessary products due to supply chain issues. Supply shortages directly translated to price increases, and our fertilizer expenses have as much as doubled.”

Labor Costs Add To The Woes

She also talked about the challenges of labor costs. 

“Since 2018, it has become increasingly difficult to plan for and cover our labor costs. For example, we need skilled equipment operators to plant and harvest our peanuts safely and efficiently. Every year, it gets harder and harder to find local workers with those skills, and so we have come to rely on guest workers from Mexico that we recruit through the H2A visa program. The costs for the H2A program have always been high, but they have risen dramatically just this past year. In Georgia, the U.S. Department of Labor unexpectedly raised the H2A minimum wage by 14%, from $11.99 in December 2022 to $13.67 for 2023.”

Thompson also voiced the support of the U.S. Peanut Federation for a voluntary base update that includes growers with and without peanut base acres.

During the hearing, Thompson answered questions from U.S. Senators Raphael Warnock, (D-GA) and Tommy Tuberville, (R-AL) on the challenges that peanut producers are currently facing to grow such an important nutritional crop for all of America and for children, especially. PG

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