Ag News

USDA changes Seg 2 peanut grading requirements

The USDA has revised the Minimum Quality and Handling standards for domestic and imported peanuts marketed in the United States, according to the USDA’s Agricultural Marketing Service.

This rule implements a recommendation from the Peanut Standards Board (PSB) to raise the grading score used to classify farmer stock peanuts as Segregation 2 from 2.49 percent damaged kernels to 3.49 percent damaged kernels.

The PSB, which is comprised of U.S. peanut producers and industry representatives, recommended the change in September 2016 to bring the grading scores that were left over from the old peanut quota program in line with changes made to the peanut program in the 2002 farm bill.

Georgia Farm Bureau, along with eight other peanut stakeholder organizations, asked the PSB to make the change in July 2016.

“We’re pleased that the USDA accepted the board’s recommendation to adjust the percentage used to grade farmer stock peanuts as Segregation 2,” Georgia Farm Bureau President Gerald Long said. “Under these requirements, farmers will receive a more accurate value when their peanuts are graded Segregation 2.”

The board requested the change to reduce farmers’ financial risk. Segregation 2 peanuts usually account for less than 1 percent of the U.S. peanut crop, but an individual grower who has his entire crop graded Segregation 2 could face financial ruin. The loan value for Segregation 2 peanuts is typically about $200 a ton less than for Segregation 1 peanuts. Using new technology, damaged peanuts can be conditioned and resold at market value without affecting quality of nuts delivered to customers. 

“A farmer having a majority of their crop graded as Segregation 2 is an economic devastation which could lead to bankruptcy, while the true value seems to be significantly higher," Georgia Peanut Commission Chairman Armond Morris said.

The notice announcing the changes was published in the Federal Register on Oct. 20, 2017. The rule will be effective Feb. 1, 2018, in order for the change to be implemented for the next crop year.