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- Growth & Development

by Lynn Waltz
Virginia Business
September 2004

On a hot summer day in Southampton County, M.L. Everett gently scrapes the hull off a peanut pod, a mid-season check on the plump Virginia peanuts he plans to harvest come fall. Everett, his father, Marvin, and his son, Louis — the family’s fifth-generation peanut farmer — hope they can keep growing what they believe are the best-tasting peanuts in the world. They’re not sure they can.

When Virginians think Southampton County, they think peanuts. But the fields of yellow-flowering foliage with tasty morsels growing below in sandy loam are swiftly disappearing. Two years ago, federal price supports and quotas were phased out, and since then peanut production here has plummeted. In Southampton the acreage dropped from 24,000 in 2000 to 9,800 last year, a trend mirrored statewide as farmers abandon the once-profitable crop. The Everetts haven’t escaped the trend — they planted just 130 acres in peanuts this year — down from 325 acres in past years. “I’m trying to hang in there,” says M.L. Everett, whose great-grandfather was a sharecropper on the land he farms today.

Farmers aren’t the only ones affected. Hancock Peanuts in Courtland, a peanut processor that employed about 125 people, closed in August 2003. Another processor and retail outlet, the 20-employee Peanut Patch, put expansion plans on hold. Shellers such as Birdsong and Golden are investing in states where peanut production is growing, such as South Carolina and Texas. “We can’t grow corn like the Midwest. We can’t grow vegetables like Florida, California or Georgia. We can’t produce soybeans like the delta,” says county extension agent Wes Alexander. “Peanuts were the perfect crop for our soil and climate, then they took peanuts away from us.”

Even with the cutbacks, Southampton remains the state’s top peanut producer. Still, the lost income and spending from peanuts is being felt throughout the local economy. Some of the losses are direct. Peanut prices to farmers have dropped from about $604 per ton to about $475 per ton. Land rents have fallen from about $85 to $45 an acre. With roughly half of the county’s 348,000 acres in cropland, the direct cash impact is in the millions, estimate county extension agents. “Farmers buy pickup trucks. They have insurance. They shop at Wal-Mart. The whole economy is affected,” says Alexander.

Filling this gap in the economy is particularly difficult here, in part because Southampton has few resources to do so. The county budgeted just $133,753 this year for economic development. “Identifying who we are is difficult,” says Cindy Cave, Southampton’s economic development director. “We are part of Hampton Roads and we’re looking for regional alignment, but we’re not getting a lot of attention.” Cave wants the state and city economic development leaders to recognize the county’s role in the regional economy, as a land-rich resource with great potential for customized site development.

The region’s economic future, she believes, lies with the highways that stretch through wide parcels of flat, developable land, linking Interstate 95 with the Port of Hampton Roads. U.S. 460 and U.S. 58 provide two major east-west corridors. In addition, both CSX Transportation and Norfolk Southern railroad companies serve the region. Companies that support trucking are a natural, Cave says. “Industrial site development is a primary focus for me while simultaneously marketing what we have. The state has to have the confidence to send interested companies.”

Change comes slowly, though, to Southampton and to Franklin. Besides farming, the region has long depended on a handful of businesses such as International Paper, Naricott Industries, maker of webbing for seat belts and military use; and Hercules Inc., which makes chemicals and resins for paper. State and private prisons are major employers as well, along with Southampton Memorial Hospital and the public schools.

While many employers have been here for generations, new ones are hard to find. Cave watches with envy as neighboring communities closer to Hampton Roads announce the arrival of big-box distribution centers such as Target and Wal-Mart. Along with port-related business, Cave is focusing on second-tier manufacturing that would tie into regional industries such as automotive. “They don’t need to be in Norfolk. It’s a 45-minute drive. The cost of living is less, land cost is less, and there are capable skilled workers here.”

It’s true that the region has workers who would probably like to get jobs closer to home. About 62 percent of county workers travel to jobs in neighboring localities, and just under a third of Franklin residents do the same. Unemployment here hovers around 4 percent. But the work force is undereducated and underpaid compared to the rest of the state. In the county, only 8.5 percent have a bachelor’s degree and 36.8 percent don’t finish high school. About 14.6 percent live in poverty. In Franklin, about 30 percent of the population doesn’t graduate from high school, while only 11.3 percent graduate from college. Nearly 20 percent live below the poverty level.

Improving the local labor pool will take time. The Paul D. Camp Community College has a $5.2 million work force education program that customizes training for Hampton Roads employers. But much of the change in the work force may end up coming from new residents. County population, stable for the last decade at about 17,482, is projected to grow to 23,500 by 2030, according to the Hampton Roads Planning District Commission. Franklin’s population is expected to expand from 8,346 to 13,400. As many as 500 new homes are planned by developers in Franklin within the next decade. “People are just flocking over here,” says Teresa Beale, director of the Franklin Chamber of Commerce. “It’s further to drive, but with traffic, you can almost get to work in the same amount of time. Plus, there’s a more laid-back lifestyle. A lot of families are looking for a small-town quality of life.”

Of course, that small-town feeling comes from having lots of farms, and Southampton is losing many of them. Many farmers are close to retirement, and some are selling equipment and scaling back because of the financial strain. The number of farms dropped from 303 in 1997 to 275 in 2002. “In 2003 I did 183 comprehensive financial plans for farmers in the region. Usually I do 10,” says Mike Roberts, a farm business management coordinator with Virginia Tech. “We’re on the brink of a total change in rural agricultural farms. Some trace their family farms back to the 1600s. I’ve sat in kitchens where a person is saying, ‘I’m the one that’s going to lose this farm.’” This year’s weather, which is producing bumper crops, may help marginal farmers hang on a bit longer, adds Roberts.

Along with bad news — Southampton Motor Speedway closed in May for lack of business and International Paper whittled its work force to 1,300 people with two layoffs in 2003 — there’s been good as well. A $21.9 million expansion at Deerfield Correctional Center will add about 100 employees when it opens in 2006. Southampton Memorial Hospital opened its $17 million, 60,000-square-foot addition this summer. Money Mailers, a direct coupon distributor, opened in Franklin in March 2003 with about 30 employees, expanding this spring to 60. The city, which rebounded from a devastating flood in 1999, has just launched a business incubator to encourage small businesses to expand or relocate there. Niche market entrepreneurs, such as mushroom growers and goat farms, are sprouting up in the region, serving the gourmet and ethnic food markets in urban areas. The large whitetail deer population supports about 70 public and private hunt clubs. A high-end bed and breakfast, Sunnyside Plantation, has opened in Newsoms.

In Franklin, a strong retail cluster along U.S. 58 is attracting national chains. Applebee’s is building. Huddle House is nearly complete. A Rose’s department store has reopened. There’s a Wal-Mart, three small hotels, strip shopping centers and numerous restaurants. Travelers through the region spent nearly $9 million in 2000, according to the Virginia Tourism Corp.

Those visitors can’t see the evidence, though, of the peanut industry’s decline. A water tower in Franklin still proclaims the city as “Home of the Jumbo Peanut.” A brochure for The Peanut Patch in Courtland still tells visitors to come try samples of “the world’s best peanut.” Extension agent Alexander believes there’s a potential market for Virginia-grown peanuts as a gourmet snack. “You ship them up to the Yankees. They’ll love them,” he says. “They’ve never seen gourmet peanuts, only cocktail peanuts in a jar that aren’t fit to eat.”

That might help a few farms, but the region’s best hopes are likely to come from what it can get from being on the edge of the growing Hampton Roads region. If land prices and the labor pool here can compete in that market then capital investment and jobs will follow. Then, the people who live here won’t have to work for peanuts.

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