A new study by experts in the University of Georgia’s College of Agricultural and Environmental Sciences is seeking to increase the value of Georgia’s peanut crops for new markets while reducing losses caused by aflatoxin, a consistent threat to the No. 1 peanut-producing state in the United States.

The four-year, $490,000 grant will take a systems-based approach toward developing high-oil peanut varieties bred to withstand the unique climate and pest pressures of the Southeast. Funded by the U.S. Department of Agriculture National Institute of Food and Agriculture, researchers will determine at what point in the growing cycle peanuts are at their highest oil content to identify the best harvest time, develop management practices to help increase oil production, and examine the profitability of oil production under variables including drought, disease and market demand.

Assistant Research Scientist Nino Brown, a team of colleagues in the Department of Crop and Soil Sciences including Cristiane Pilon, Scott Monfort and Scott Tubbs, and senior public service associate Amanda Smith in the Department of Agricultural and Applied Economics will collaborate on research designed to give peanut producers expanded production options beyond the edible peanut market.

Combating the threat of aflatoxin

The study's goal is to assess the potential for Southeastern peanut growers to participate in the global peanut oil market, including the harvest of aflatoxin-contaminated edible peanut crops and the intentional planting and management of high-oil varieties bred to perform in the Southeast.

The domestic peanut oil market is currently small. Most peanut oil used in the U.S. is imported from countries including China, Africa, South America and India. While most of the peanut production in the U.S. is slated for the edible market — think peanut butter, roasted snacks and confectionary use — a percentage of U.S. peanut production goes toward oil production if a harvested load or field exceeds the aflatoxin threshold for the edible market.  

In 2019, aflatoxin — a poisonous substance produced by the fungi Aspergillus flavus and Aspergillus parasiticus — was responsible for an industry-wide yield loss of 24% in Georgia. In 2021, Georgia farmers produced approximately 52% of the peanuts produced in the country, harvesting more than 3.3 billion pounds of peanuts.

“Our peanuts are primarily for the edible market, which is of higher value, but if a trailer or semi-load of peanuts comes in from the field and aflatoxins are above a certain level, they are sent for oil crushing,” said Brown, adding that aflatoxin is removed during the oil extraction process.

Expanding oil markets

While peanut oil is currently considered a backup market for peanut producers in the U.S., there is a large global market for the product.

“Most peanuts grown internationally are grown for oil, about 60% percent,” Brown said. “Domestically, we pay a premium for peanut cooking oil, which garners one of the highest per gallon prices for vegetable oils, yet we are importing it. It doesn’t make sense. There is a really big market for peanut oil that U.S. producers are currently not taking advantage of. The market for edible peanuts seems like it has reached a limit — it might be as high as consumption is going to go.”

Breeders can easily develop high-oleic varieties, which have a longer shelf life and are better for cooking. However, lower oleic acid varieties seem to be better for producing biofuels, Brown added.

“Peanut oil makes a very good biofuel. With the airline and auto industries trying to decrease fossil fuel consumption, peanut oil would be a great way to offset that. We can likely produce 200 to 300 gallons of oil per acre,” he said.

Because edible peanut demand and prices appear to have leveled off, evaluating the potential use of peanuts for oil production is one way to ensure the sustainability of the peanut industry in Georgia. They will do that by maximizing oil production, finding better production strategies for dryland peanuts, and focusing on breeding to increase the oil percentage in new peanut varieties.

Brown explained that although growers can produce a lot of oil using current edible varieties, they need varieties specific to oil production to capitalize on the oil market. “That way we can play both sides of the game, and edible peanuts that are discarded due to aflatoxin can still be used for oil, but we will also have varieties specifically for oil production,” he added. These varieties could be planted on land that has a history of high levels of aflatoxin or limited ability for irrigation.

Boosting peanut value

The impetus for this project has largely been grower-driven.

“The Georgia Peanut Commission and the National Peanut Board have been asking us to start working on this to give our growers more options,” Brown added. “If we know a variety or a field is not going to be used for edible production, we can change some inputs and management practices to gear it more toward lower input costs. Production costs have gotten out of control and the price of peanuts has not tracked with production costs. Prices are flat. By diverting some of those acres to oil production, it may increase the demand and price for edible peanuts.”

As climate risks such as more frequent and severe droughts become more prevalent, developing varieties for oil production that are suited to the region could be a boon for producers.

“In 2019, about 30% of all edible peanuts were rejected due to aflatoxin, a loss of about $126 million,” Brown said. “This research will help us to be prepared for those situations in the future and to protect our growers against drought and aflatoxin to produce more oil per acre and contribute to the biofuel economy. It is a multi-pronged approach to address a multi-faceted problem.”

To learn more about CAES research and the communities it benefits, visit caes.uga.edu/research.