Separate Dryland Peanuts
Posted by romeethredge on September 20, 2011
I’m getting reports of some dryland peanuts going to a classification known as Seg 3, due to aflatoxin. Also some irrigated peanut loads with a little dry corner of a field in them may go to the lower quality designation as well. So we need to make sure that we separate dry stressed peanuts from non stressed, irrigated nuts. If we keep them separate it will cut down on the poundage classified at the lower level.
In this photo you can see where the irrigation water comes to in the field (greener vines in background). In the foreground we have drought affected peanuts and also spider mites have moved in and affected the vines here. This grower told me he will dig these peanuts in a few days and pick the dry area separately from the irrigated even though it will be some trouble to do it. It will pay off in the long run.
Here’s a closeup of the spider mites and the damage and webbing they do to the vines. They are much worse in hot dry conditions and in dry areas of a field. Here’s some spider mite comments from Dr John Beasley, UGA Extension Peanut Scientist “Spider Mite damage – We have seen an explosion of spider mites across the state the past couple of weeks. These tiny insects can spread rapidly and suck the juices from the leaflets so that they
looked “scorched”. In some fields the level of damage is severe enough that there
is no option but to go ahead and dig. For those fields where the population is
just now building, there is time to treat those fields, especially if your
evaluation of a hull-scrape profile indicates there is 10 or more days to
Here are some dryland peanuts that are worse beside a tree line where the trees are pulling moisture from the area as well.
Quality Adjustments for Seg. 2 and Seg. 3 Peanuts – Nathan Smith, UGA Extension Ag Economist
Unfortunately, there are a number of fields that will likely have Seg.2
and Seg. 3 peanuts again during the 2011 harvest. Crop insurance will adjust for quality for
insured causes of loss. An indemnity payment is triggered when the quality adjustment brings the production to count
below the production guarantee.
Reports are that some areas have offered $500 per ton for Seg. 3 peanuts. In this case, a quality
adjustment would not be made because the price received is more than 85% of the
price election which is $500 per ton for 2011.
If your price election is $500 per ton, quality loss adjustment will
trigger at below $425 per ton. For $600 per ton, the quality loss adjustment will trigger at below $510 per ton.
You can have Seg. 2 and Seg. 3 peanuts, receive a price less than 85%
of the price election for those peanuts, and still not trigger a payment. It depends on how many loads are discounted
due to poor quality. Every situation will be different. Section 14 (e.) of the
Peanut Crop Provisions describes the quality loss adjustment method and is
(e) Mature peanuts may be adjusted for quality when production has been damaged by an
insured cause of loss.
(1) To enable us to determine the number of pounds, price per pound, and the quality of production for any peanuts that
qualify for quality adjustment, we must be given the opportunity to have such peanuts inspected and graded before you dispose of
(2) If you dispose of any production without giving us the opportunity to have the peanuts inspected and graded, the gross
weight of such production will be used in determining total production to count unless you submit a marketing record satisfactory to us
which clearly shows the number of pounds, price per pound, and quality of such peanuts.
(3) Such production to count will be reduced if the price per pound received for damaged peanuts is less than 85 percent of
the price election by:
(i) Dividing the price per pound for the damaged peanuts, as determined by us in accordance with section
14(e)(1), received for the insured type of peanuts by the applicable price election; and
(ii) Multiplying this result by the number of pounds of such production.
Here is an example of a couple scenarios for Seg. 3 peanuts.
Assume a 2,000 lb. yield guarantee (2,857 lb. APH and 70% coverage) and a 100,000 lb total unit
guarantee (2000 lb. x 50 acres). The policy on peanuts states that the loss in value due to quality must fall below
85% of the price election.
If the harvest yield is 1,500 lb./ac. on 50 acres, the production to count would be 75,000 lbs. An indemnity would be triggered on the 500
lbs at the price election of $0.25 per pound (could be up to $0.30 pound if
grower contracted and turned in the contract by June). The indemnity would be $125 per acre or
$6,250 for the unit before quality adjustment.
If the 75,000 lbs harvested went seg 2 or 3 then the production to count would be adjusted for quality loss
provided the price received for these peanuts is below $425. The price received for the seg 2 or 3 peanuts
is used to derive a factor to adjust the production to count.
Let’s assume the price per pound for the peanuts harvested was $0.10 per pound, then 0.10/0.25 = 0.4
factor. Multiply the factor times the production to count of 75,000 lbs (1,500 if want by acre basis), 0.4 x 75,000 = 30,000. The harvested yield is reduced by 30,000 lbs to give new production to count of 45,000 lbs.
The total indemnity is paid on the guarantee minus the production to count, in this case 100,000 – 45,000 = 55,000 lbs.
The total payment is figured as $13,750 (55,000 x 0.25). The quality adjustment on the 1,500 lb per
acre paid $150 per acre or $7,500 on the unit.
In the case where the actual harvested yield is greater than the 2,000 lb. yield guarantee, 2,800 lbs for
instance, there can still be an indemnity if the quality loss is large enough to drop the production to count below the guarantee.
If the entire crop went seg 2 or 3 for 0.10 per pound then the production to count of 140,000 lbs would be multiplied by the 0.4 factor and subtracted from the total harvest yield, 140,000 x 0.4 = 56,000 lb production to count. The
100,000 guarantee minus 56,000 lb. is 44,000 lb. shortfall. The indemnity is calculated as 44,000 x 0.25 = $11,000.
Quality is adjusted by wagon load meaning the peanuts have to be graded but the loss is adjusted in pounds as
long as the price received is less than 85% of price election or contracted price in the case of option contracts.
Contact your insurance agent if you think you will have Seg.
2 or Seg. 3 peanuts to make sure you know your options when selling the
Dryland Peanut Harvest
Here’s a video I took 2 days ago of some dryland peanuts being dug. The ground was hard then and he had new blades but they dulled very quickly in the hard dry dirt. Last night we had some rain that will facilitate digging.