Birdsong recounts ups and downs of peanut business

Published 12:00 am Tuesday, March 15, 2005

Through 40 years in the peanut business, George Birdsong has seen both feast and famine.

The operator of Suffolk’s sole remaining peanut shelling business, Birdsong Peanuts, told a Suffolk Rotary audience last week that but for a fortuitous decision in the 1960s, Birdsong peanuts likely would have been a part of Suffolk lore as well.

At one time, the &uot;World’s Largest Peanut Market&uot; was home to many shellers – Old Dominion, Arthur’s, Suffolk Peanut Company and Columbus Peanut Company are a few – but since 1999, Birdsong has been alone.

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Birdsong said that about the time he left the practice of law and started in the peanut business, the company decided to branch out into Texas (about 20 years ago, it also began operations in Georgia.) The decision proved to be prophetic because the Southwest and Southeast 90 comprise about 90 percent of the nation’s peanut market.

&uot;The move was key to Birdsong’s survival,&uot; Birdsong said. &uot;Had we not made the move we would be gone completely, too. It’s enabled us to absorb some of the losses.&uot;

Birdsong noted that while their have been many changes in the business since he started, the pace of change has accelerated tremendously over the past decade, and those changes have impacted the entire economy of Suffolk, not just the peanut business.

Rotary President John Harrell, owner of Suffolk Iron Works, noted that 40 years ago, probably 60 percent of his trade was with the peanut industry. Today it’s less than one percent.

Much of the change has been in consolidation. Birdsong noted that in 1988, there were about 45 shelling firms like Birdsong and today there only about a dozen.

The consolidation was necessary, he said, to efficiently operate in a business characterized by risk, competition, high volume and low margins.

It’s been much the same for the growers. Small Virginia operations that are more susceptible to disease, can barely stay in business in the face of stiff competition from the Southwest and Southeast. Birdsong said the typical Virginia operation is anywhere from 25 to 75 acres while the average peanut farm in Georgia is about 200 acres.

He told of one local farmer who said he has to take his tractor across his field about 17 times during the course of a growing season while the big farms in Texas and Georgia, with high-tech irrigation systems, see a tractor only once.

&uot;We have good growers here,

but they have difficulty overcoming what it takes to grow peanuts up here,&uot; he said.

Another problem for growers has been price supports. The federal guarantees reached a high of $687 a ton some years back but since 2002 have fallen to $495, with a guarantee of just $355.

&uot;The large farms are able to handle it better because of their efficiencies,&uot; he said.

But all is not gloom and doom for the industry.

Birdsong noted that consumption has risen dramatically thanks to efforts on the part of the industry to educate that peanuts are nutritional powerhouses.

&uot;We found out all sorts of great things about peanuts,&uot; Birdsong said. &uot;Eight to 10 years ago we were virtually told not to eat peanuts. Now it’s one of the most nutritious foods.&uot;

However, the nearly 10 percent increase in consumption has coincided with a vast increase in acreage planted, leading to a possible glut. He said the price has dropped three or four cents a pound in recent weeks.

&uot;We may be on the verge of another glut which presents a whole different set of marketing problems with which we will have to deal,&uot; Birdsong said. &uot;But we’ve gone all over the place – from good times to bad, but that’s the nature of the commodities market.&uot;