Economic Feasibility of Screening Farmer Stock Peanuts Prior to Marketing

Abstract

Abstract Screening farmer stock peanuts prior to marketing provides a method to increase the per-ton value of peanuts. The mechanical separation of larger, higher value pods (overs) from smaller, lower value pods—which includes foreign material (FM) and loose shelled kernels (LSK) (thrus)—results in significant changes in farmer stock grade. Based on data from 394 runner lots in the Southeast, the percentage of sound mature kernels and sound splits (SMKSS), LSK, FM, and other kernels (OK) was changed by +0.61, −4.31, −2.32, and −0.3 between overs and unscreened lots, respectively. The average value of farmer stock peanuts was $29.15/ Mg higher in the screened lots (overs) compared to the unscreened lots. Although the average per-ton value of screened peanuts is increased, economic feasibility of screening is dependent upon several factors. Two specific marketing scenarios for farmers are analyzed including production of quota poundage only and production in excess of quota poundage where additional peanuts are used to replace peanuts removed during the screening process. Thus, opportunity cost must be included. Typical investment in high capacity (minimum 18 Mg/hr) screening equipment is approximately $150,000. Amortized at 10% rate of interest over a 6-yr period with depreciation allowances and labor and energy cost included, a minimum of 4536 Mg/yr must be screened to effectively ldquo;spread” fixed cost, thus indicating that only exceptionally large farmers, groups of farmers, or buying points have sufficient volume for screening. Further, the quality of peanuts prior to screening also impacts economic feasibility. These factors will be incorporated to estimate probability decision thresholds to determine if individual lots can be profitably screened prior to marketing.