Reasons Why Virginia Market Types Dominate NC Production Peanut Notes No. 187 2024

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Question:

Got a question from a citizen asking why don’t we grow runners here instead of Virginia type peanuts?

Jordan:

Many years ago the shelling and processing industry developed the markets for Virginia types in our region (Virginia and North Carolina.) Once any industry gets established, it is typically going to maintain that momentum. Runner and Virginia market types must be segregated because shelling plants have to be adjusted for one or the other. This is not that easy to do. You can’t run both at the same time.

Also, after government programs for peanuts were established many years ago, they were maintained in that form. The government changes slowly as do big industries. I know more about why the industry we have today has been maintained than how the decision was made for one or the other 80 years ago (where market types are grown.) Farm programs are more open-market oriented now. Prior to 2003, the Federal legislation associated with peanut dictated market types in different regions. Spanish and Valencia market types were grown in the southwestern states while runner market types were grown in the southeast. Virginia market types were grown in the Virginia-Carolina region. To sell for the domestic market and receive a quota price for your production (quantity of pounds,) you had to grow specific market types. If you produce peanuts under that system long enough, that is what you know and that is how the overall industry is shaped. Now, we have an open contract system that would allow any market type to be grown in NC, but the shelling plants and the industry in general are designed for Virginia market types.

Currently, there is a certain demand for in-shell and gourmet peanuts, and Virginia market types meet that demand. The peanut industry needs a certain amount of production based on consumer demand. It costs more to grow a Virginia market type. The plant population per acre is the same for both. The amount of seed planted for a Virginia market type is greater (pounds) than a runner market type because a bag of seed does not plant as much of an acre for the larger-seeded varieties. Virginia market types also require gypsum while runner market types either do not require it or need it at a lower rate. The shellers have to offer a higher contract for Virginia market types to get the acres planted that supply the consumer demand. That is attractive to growers at face value. But there is only so much demand for in-shell and gourmet peanuts. But much of a load of peanuts is shelled and competes with runner market types for other uses.
The total peanut industry (shellers, processors, research, extension, agribusiness, lobby efforts, grower organizations) has supported Virginia market types for many decades. Genetic and breeding programs have created locally-adapted varieties that withstand disease to a degree and yield well. Runner breeding programs are in other states. The closer variety development and selection of a variety is to the region of production, the more adapted the variety is and the greater the yield will be. When we grow runners, we are growing runners that were adapted for Georgia, Florida, and Alabama. They are not as well adapted as the locally-breed Virginia market types, and this results in lower yields or at the very least more variation in yield response for runner market types.
Maturity (days from peanut emergence to digging and vine inversion) of most runner market types is longer than our Virginia market types, and given our growing cycle is shorter than the southeast (cooler temperatures and frost potential in September and October,) we don’t want anything that is later maturing if we can help it. That points to Virginia market types as the best option. But we can grow runner market types and we do grow some. They just stay in the field longer in the fall.
The primary driver for interest in runner market types over the past decade has been Birdsong Peanut Company. They need a certain amount of high oleic runner market types to meet product demand. High oleic varieties need to be segregated from normal oleate varieties. In the southeastern US, the runner market types grown are not high oleic (there is a negative issue with the high oleic fatty acid profile and peanut butter manufacturing.) Segregation would be a nightmare (you have to be all high oleic to experience the value of that trait.) All of our Virginia market types are high oleic, so growing high oleic runner market types for a certain product demand in NC and VA is a good choice. Birdsong also wants their mill in Suffolk to process peanuts all year around as this creates efficiency. But they don’t want to buy more Virginia market types because contracts with growers would be higher than runner market types. They have been willing to offer reasonable contracts for runner market types to fill this demand. That is why for many years we had about 5% or so of our production in runner market types.
Lots to unpack in this answer. But in short, once an industry with a product gets established, it does not change quickly.
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