Get ready for the peanut crunch of 1981.
The peanuts that make ball games and cocktail parties hallowed American pastimes and the peanut butter that fuels juvenile armies will be in short supply next year, and their prices are expected to rise dramatically.
Last summer's drought and higher-than-usual amounts of plant disease have turned the country's huge peanut industry into a disaster area with warehouse and processing workers being laid off by the hundreds.
Agriculture Secretary Bob Bergland, according to departmental sources, is expected soon to recommend to President Carter that tight import controls on foreign peanuts be lifted to help processors and compulsive munchers over the hump.
Carter's history as a peanut warehouse operator at Plains, Ga., is well known, but according to USDA officials, he has kept hands off peanut policy. A peanut import decision will rest largely on Bergland's recommendation, they said.
Under the Agricultural Adjustment Act of 1933, the president is empowered to act, on recommendation of the secretary, to suspend the import limits that are established to protect American farmers under the federal price support program.
The U.S. International Trade Commission (ITC), meanwhile, responding to an urgent request from nut processors and candy makers, has scheduled a Dec. 1 hearing on their plea for a relaxation of import controls.
"We need emergency action," said James E. Mack, attorney for the Peanut Butter and Nut Processors Association and the National Confectioners Association, who use about 98 percent of the edible peanuts in the country.
"Unless you had peanuts under contract, there hasn't been anything available on the market since Labor Day," Mack said.
The crisis in the nuthouse is due mainly to the severe hot and dry weather that baked the three major growing zones -- the Virginia-North Carolina area, other portions of the Southeast and the Southwest.
The USDA estimated this month that the 1980 crop will be 42 percent smaller than last year's. Coupled with the unusually high incidence of aflatoxin, a carcinogenic mold peculiar to peanuts, the edible portion of the crop will be reduced even further.
Lack of moisture is generally considered a spur to development of the fungus, which is carried into the peanut by a boring weevil. Sophisticated electronic scanning devices segregate contaminated peanuts, which are moved from edible stocks into oil-processing.
USDA experts say that between 15 and 20 percent of the crop is tainted. Others, such as Peter Rogers, senior vice president of Standard Brands' Planters Peanuts division, say the rejection rate for some lots is above 50 percent.
All of which is to say that the peanut supply situation -- even if the president or the ITC decided to allow more imports -- is going to be tight next year with commensurate price increases.
"We don't need to scare people, but we have a shortage, no question about it," said Mack Birdsong, who operates Birdsong Peanuts, a warehousing firm at Suffolk, Va. "This has been a real catastrophe. "There is some carryover from last year's crop, but the big question is what this will do to the consumer market."
The peanut butter moguls and the nut roasters, toasters and boasters are asking themselves the same questions, but beyond talking about shortages in 1981 and higher prices, they are saying little else. Might tip off the competition, you know.
"For the first part of 1981 there will be a tremendous shortage," said Rogers of Planters. "Nuts that normally would sell for 42 cents a pound were going for $1.50 this week."
Translated, that means, particularly in time of shortages, sellers will not only pass on their higher costs, but also probably add a little cushion for themselves, Rogers said. Roughly half of available peanuts go into peanut butter.
Statistically, it might seem the world is up to its knees in peanuts, but that is not so. U.S. consumption of edible shelled nuts last year was about 1.3 billion pounds, from a crop of 3 billion pounds after shelling. The rest was sold overseas, saved for seed, crushed for oil and put into federal warehouses. Most carryover nuts from 1979 were used last September.
This year, according to USDA, the U.S. crop -- before tainted nuts are removed and seed nuts put aside -- will be down to 1.7 billion pounds after shelling. While world production is expected to be up about 4 percent to 5 percent, imports are limited by law to only 1.7 million -- not billion -- pounds. In sum: not enough nuts for U.S. cravings.
It is no secret that prices of peanut products will have to go up, for the shortage is servere," said Ed Ryder, a spokesman for Procter & Gamble of Cincinnati, one of the country's leading peanut butter producers. "As far as shortages go, we don't comment for competitive reasons. We have to play it close to the vest."
But if figures from the peanut butter and nut processors' association are accurate, the crisis already has hit. By the end of October, more than 1,000 workers had been laid off by processors, with many more expected as production catches up with supply in a few months.
USDA officials, conceding problems, are not so certain the situation is quite as dire as the processors paint. "There's no question but what it's serious, but there's also a good deal of market confusion, with farmers holding onto their stocks until things settle down," said William Motes, an aide to USDA economist Howard Hjort.
"The big unknown is what the overall reduction will be. Will our experts go down? Will domestic use go down? If peanut butter prices increase substantialy, what happens to demand? It is very difficult to estimate, that's why our processing of the import request is so slow," Motes said.
Motes also said USDA officials will not recommend an embargo on exports of U.S. peanuts, a step sought earlier by the processors' association.
The first certain sign of hard times in the bleachers showed up this week in Baltimore when George Vandora, owner of Virginia Peanut Co., said he already had begun rationing his peanuts so he can fill roasted peanut contracts for the last three Baltimore Colts home games and for upcoming events at the University of Maryland.