Small farmers have fought hard to keep the price loss coverage program in place. Michael Davis, a sixth generation peanut farmer in Florida, said during a 2017 campaign to save the program that it was the only thing keeping many of his neighbors operational.
“Without the Peanut Program, I believe that one-third of the farmers I know would go out of business, which would dramatically impact our communities,” Davis told the industry publication AgFax.
While the federal payment support program does in some ways incentivize farmers to plant more peanuts, increasing the potential cost to taxpayers, a higher market price—set by shellers who face real competition—would drastically reduce what taxpayers must pay to keep peanut farmers afloat.
Now, farmers and buying point owners are moving to break the control of the big shellers. In addition to the antitrust lawsuits, over the past five years at least five significant farmer-owned cooperatives have organized in the peanut belt. The largest, Premium Peanut, includes farmer members and buying points throughout south Georgia, who all sell their crops into the group’s massive, sophisticated shelling plant.
Locked into buying points that were in turn locked into contracts, and prices, with big shellers, farmers started the cooperative in 2014 while hunting for an alternative, where they could be guaranteed a buyer for a set quantity of crops and, in good years, make more money for their work.
“With us, they know that if they bought a thousand shares of the company, they have a home for a thousand tons of farmers’ stock peanuts every year. We will buy them, we will warehouse them,” Karl Zimmer, CEO of Premium Peanut, told The Counter in 2017, a year after the cooperative’s shelling plant opened.
Bob Parker, president of the National Peanut Board and a former executive at Golden Peanut, told me the rise of peanut farmer cooperatives is the most significant change he’s seen in any cash crop in America over the past decade or so. Parker likens the cooperatives to community banks, which are often supported by the deposits of local businesses and, in turn, operate to the benefit of small and local businesses in the community. He estimates that cooperatives from Georgia to Texas could soon account for a quarter of the peanut shelling market.
“I think it’s a unique thing in the peanut industry. No other industry has gone through the kind of deconsolidation that peanut has,” Parker said.
Tyron Spearman, head of the National Peanut Buying Points Association, said he’s seen farmers leave their longtime, big sheller-controlled buying points for those operated by Premium and other cooperatives. Premium now has more than 200 farmer members. “The co-op movement is really getting to these big shellers, and they’re not going to have the power they used to,” Spearman said
The real impact of the cooperatives remains to be seen. The massive market share of Golden Peanut and Birdsong won’t evaporate overnight. But the push for peanut farmers to harness their collective power against the control of the big shellers may just bring brighter days ahead for an industry that has long been under the thumb of monopoly power.