Lower-than-desired peanut contract prices due to an oversupplied market will have more farmers planting less of the crop and turning to cotton and corn.
But with low commodity prices across the board in all major crops, farmers this year will be hoping for good weather in order to make a profit.
Jim Traywick, who farms in Cope at Frog Level Farm, is an example of a farmer planning to cut back on peanut acreage from 400 to 250 and most likely increase his cotton acreage.
"The price is not where we need it to be," he said.
Peanut contract prices were hovering at about $425 per ton heading into the spring right on par with 2018 prices. Farmers would like to see prices at $600 per ton. Prices in 2016 were around $500 a ton.
These prices follow a 2017 where peanut production saw record-high production and yields in the state.
With a large supply of peanuts in the pipeline, the market is currently depressed, making shellers less aggressive in pushing for contracts.
As a result, peanut markets have dropped to loan value.
The low peanut prices have prompted farmers to cut back on planted acreage the last two years.
Orangeburg County Clemson Extension Agent Jonathan Croft said Traywick is not alone in reducing peanut plantings in 2019.
"I think we will be planting less than 10,000 acres total in the county," he said. "That is a combined total of runner and Virginia type."
Last year, countywide there were 7,263 acres of runner peanuts planted and about 5,981 acres of Virginia peanuts.
While a reduction in peanut prices is impacting planting plans, for growers 2019 will be a year of low commodity prices.
"The prices of everything is marginal right now," Traywick said. "You can maybe break even, but if you get a weather problem, either too wet or too dry, you will not be breaking even. It will be a marginal or break-even situation at best."
"It will be a time to have insurance and not to stick your neck out too far," Traywick continued.
Traywick is planting about 600 acres of cotton, which is up some from 2018, and about 350 acres of corn, which is about the same as 2018.
Croft says overall corn plantings are expected to increase in 2019 to about 35,000 acres
"Growers I have talked with that plan to increase corn acres are doing so because they are cutting peanut acres," Croft said. "They feel they can make more of a profit on corn for their operations."
About 30,156 acres of corn were planted in Orangeburg County in 2018, which was in line with the acreage planted the last three years.
Corn prices are running in the $4-per-bushel range, according to the Chicago Board of Trade.
Last year, corn prices were down to about $2.65 per bushel, though with the basis, one could get $4.30 for corn.
In order for farmers to see a profit, corn needs to be in the $5 to $5.50 range.
Croft said with cotton, he expects about 40,000 acres will be a good estimate.
Last year, about 37,016 acres of cotton were planted.
"They (farmers) are cutting dry-land peanut or soybean acres, and their land is better suited for cotton than dry-land corn," he said. "They feel that cotton can be more profitable for them than other crops on their land."
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Cotton prices at the end of February heading into March were about 72 cents a pound. This was down slightly from 2018 cotton prices in the upper 70-cent range.
One thing of note with regard to cotton and soybeans in 2019 is that growers who are planting dicamba-tolerant crops in both commodities and intend to spray the crops with labeled dicamba products will need to participate in one of the 2019 Dicamba Use Certification programs, Croft said.
"There are some changes to the product labels from 2018 that they need to be aware of," he said.
Croft said he expects about 15,000 acres of soybeans will be planted in the county for 2019, which is down from the 17,297 acres planted last year.
Prices and an uncertain market for soybeans in 2019, Croft said, are the reasons for the decrease.
"Also deer damage in some areas is causing farmers to not plant soybeans."
Soybean prices took a hit in 2018, hovering in the $8-a-bushel range, below the desired over-$11 a bushel farmers like to see to make a profit.
November contract prices for soybeans are about $9.50 per bushel for 2019, according to the CBOT.
More detailed crop-planting projections will be available later in the spring as the U.S. Department of Agriculture’s National Agricultural Statistics Service contacts producers to determine their plans for the upcoming growing season.
The survey will include the types of crops farmers intend to plant, how many acres they intend to plant and the amounts of grain and oilseed they store on their farms.
Survey results will be published in the Prospective Plantings and Quarterly Grain Stocks report.
Another issue facing growers in 2019 is the impact of President Donald Trump's administration's dispute over China's high-tech industrial policies.
In 2018, the Trump administration set tariffs on about $34 billion of Chinese goods. China retaliated with duties on soybeans and pork.
Traywick says most farmers to his knowledge are hoping for relief via trade negotiations.
"It should happen, but it may not happen as soon as we hope," he said, adding the trade war recently with China has mostly impacted soybeans, but cotton has also been hurt.
"The Chinese are going to have to buy some cotton eventually," he said. "If they buy it from Brazil, someone else is going to have to buy it from us."
Traywick said it is his thought that most farmers agree the trade situation with China needs to be resolved.
"We have been told they are taking advantage of us," he said.
According to a late January Farm Journal Pulse survey, about 78 percent of the 1,043 farmers and ranchers say they either strongly approve or somewhat approve of the way President Donald Trump was conducting his job.
Farmers and ranchers' approval for the president went up from 76 percent in December 2018.
Traywick is hoping brighter days are on the horizon following a 2018 where farmers either made little or no money at all.
"We got a little help from insurance because of the wet weather," he said, adding that some of the cotton was downgraded because it remained in the fields too long.
Farmers are also going to be operating under the new farm bill that was passed last year.
Croft said the jury is still out on exactly what impact the Farm Bill will have on growers' planting intentions or patterns into the future.