Peanut Policy Change and Adjustment Under the 2002 Farm Act

By eliminating the longstanding peanut marketing quota system, the 2002 Farm Act substantially altered the policy environment for the U.S. peanut sector. Under the marketing quota system, supply controls assured peanut quota holders of receiving high support prices, while requiring that nonquota peanuts be exported or sold into the lower value crush market. Pressured, in part, by increased imports, these supply controls were replaced with the same set of supports available to producers of other program crops. For producers, the transition has been marked by lower peanut prices and reduced, but stabilizing, acreage, and adaptation to an environment with limited price information and marketing strategies. At the same time, it appears that peanut producers are taking advantage of increased planting flexibility and expanding production in higher yielding areas. For many producers, the transition has been cushioned by additional revenue from Government payments and other sources of farm and off-farm income.