National Peanut Month

Rows of peanuts bask in the glow of the late afternoon sun in a rural Houston County peanut field in the summer of 2015.

Two Florida Panhandle peanut farmers have alleged in a class-action lawsuit filed Thursday that shelling companies Golden Peanut and Birdsong Corporation have fixed prices for more than five years.

The lawsuit, filed in federal court in Virginia, notes runner peanut prices have remained “remarkably” flat since January 2014 despite market conditions that have disrupted supply and demand. Chief among those events is the landfall of Hurricane Michael in October 2018, which created $23 million in damage to peanut crops in Florida, $10 to $20 million in Georgia, and another $11.5 million in Alabama – the nation’s three largest peanut-producing states.

The lawsuit claims the tariff war with China cannot explain why peanut prices remained low since 80 percent of peanut exports go to Canada, Mexico, and Europe.

Plaintiffs Dustin Land and Mark Hasty of D&M Farms of Bascom, near the Florida-Alabama line, allege Golden and Birdsong colluded to keep prices low following weather-related events from 2011 to 2013 that destabilized the market and made risk hard to manage. The lawsuit states Golden and Birdsong submitted false reports of a flooded market to the U.S. Department of Agriculture in an effort to keep prices stabilized and low.

The shellers also offer similar contracts to farmers, often simultaneously, to limit negotiating power, according to a press release from Lockridge Grindal Nauen, one of the firms representing the class. The release also states shellers play a major role in the peanut market since the majority of peanuts are sold to them for processing.

Golden and Birdsong control 80 to 90 percent of the shelling market, the lawsuit noted.

“Peanut farmers are used to boom and bust years, but what’s happened with peanut prices since 2014 is unprecedented,” said Brian Clark, a partner with Lockridge Grindal Nauen. “Prices have bottomed out and stayed low in a way never seen before. The result is many peanut farmers are having to draw on the equity in their farms and equipment built over generations just to survive.

“It’s a dire situation brought on by the collusion among peanut shellers alleged in the complaint.”

Clark said his firm specializes in anti-trust lawsuits and is involved in three other major class-action agriculture lawsuits involving the poultry, pork, and beef processing industries.

Clark encourages peanut farmers who believe they have suffered damage due to price-fixing to call his office at 612-339-6900.

Golden Peanut operates several plants, including one in Headland, and numerous buying points throughout the Southeast. Birdsong also operates several plants in the Southeast and Mid-Atlantic states, including plants in Blakely, Georgia, and Arlington, Georgia.

Follow Jeremy Wise on Twitter @DEgovbeat

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