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Russians eating more U.S. peanuts

AP Farm Writer

ALBANY - Annoyed by four years of tumbling exports, peanut industry officials are encouraged by what they hope will become a growing market in Russia, a trend that would benefit peanut farmers and rural communities throughout the South where the crop is grown..

Canada is the leading importer of U.S. peanuts, buying 70,374 metric tons last year, followed by the Netherlands with 27,835 tons and Mexico with 21,740 tons.

The Russian Federation climbed to 10th place in 2005, importing just 1,522 metric tons. But Russia has already nearly doubled that in the first half of this year, with imports totaling 2,652 metric tons.

''I think it's a golden opportunity if we can keep it going,'' said Tyron Spearman of Tifton, publisher of a peanut industry newsletter. ''It's significant that they've moved up. They were off the radar screen before that.'' Georgia is the nation's leading peanut producing state.

Argentina, a major competitor in the world peanut market, had a short crop last year and that may have prompted the Russians to buy more U.S. peanuts, said Sally Klusaritz, spokeswoman for the Agriculture Department's Foreign Agricultural Service in Washington.

But Patrick Archer, president of the American Peanut Council, believes it's an indication of a growing market for higher quality snacks, including American-style potato chips and candy bars loaded with U.S. peanuts.

''Russian society is becoming more affluent,'' he said. ''There's been very significant development of their snack-food industry with all kinds of new foods.

''Several multinational companies now have a presence in Russia which has raised the overall quality of Russian snack foods,'' he added. ''With that rise in quality, there's been an increased demand for high-quality U.S. peanuts.''

While the Russians may be eating more snack nuts and candy bars loaded with U.S. peanuts, they don't appear ready to embrace peanut butter, experts say.

''I know you can buy imported peanut butter in Russia, but it's not a well-known product,'' said Archer.

Representatives of the Peanut Council - a trade group that represents growers, shellers, manufacturers and all other segments of the U.S. peanut industry - traveled to Moscow about 10 years ago and served peanut butter-and-jelly sandwiches, hoping to persuade the government to add peanuts to the school lunch program.

Russian officials decided there were cheaper alternatives and rejected the idea.

But now, the officials appear to be rolling out the welcome mat for commodities that can enhance life in

Russia.

At the urging of the country's confectionary industry, the government agreed to drop a 5 percent tariff on imported cocoa and non-roasted coffee and peanuts for nine months, beginning in February, officials say.

''That would at least make imported peanuts of all origins less expensive and that's always good for the market,'' Archer said.

The 2002 Farm Bill, which sets the nation's agricultural policies, was supposed to make U.S. peanuts more competitive by eliminating a Depression-era program that kept prices artificially high. That didn't happen.

Domestic peanut consumption has climbed to an all-time high since 2002 because of new products and better promotion, but exports have dropped from about 500,000 tons that year to around 250,000 tons.

Industry leaders blame the Agriculture Department. They contend a ''posted price'' set by the USDA to regulate domestic and export prices is unrealistically high and hinders foreign sales.

With no signs of reconciling their differences with the USDA, peanut industry officials are encouraged by the news from Russia.

''We're excited about any increase in any export market, given the current situation with exports,'' Archer said.

He believes the growth of the Russian market is driven more by quality than by the cost of Argentine peanuts or amount that country produces. Argentina had a good crop this year, yet U.S. exports to Russia continue to increase, he notes.

''They're just demanding higher quality and when you want the best quality peanuts, you buy U.S.,'' Archer said.