Sunland closure hammers peanut market

By Christina Calloway

PNT senior writer

ccalloway@pntonline.com

Kenneth Cox said the peanut market died in this area when Sunland, Inc. shut its doors Wednesday.

The 48-year-old Roosevelt County farmer is among the peanut producers in the county and West Texas who have contracts with Sunland. He harvested and dug up his peanuts this year like any other, but for the first time in his 30 years of peanut farming, he has no idea what he’s going to do with his crop now that Sunland filed for Chapter 7 bankruptcy.

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Christina Calloway: Portales News-Tribune
Roosevelt County farmer Kenneth Cox dug up his entire peanut crop nearly a week ago with hopes to ship his product to Sunland, Inc. After Sunland filed for Chapter 7 bankruptcy Wednesday, Cox said he has no one to sell his crop to.

“I have hundreds of thousands of dollars of peanuts ready and I have no where to go,” Cox said. “I can’t thrash them, I can’t haul them anywhere, I can’t get paid for them. I can’t do one thing with them at this moment and I got a banker saying your notes are due and we need money.”

In addition to more than 100 Sunland employees losing their jobs from the impact and financial strain of a voluntary product recall and a government-enforced plant shutdown, Cox says the livelihood of peanut farmers is at stake with Sunland’s closure.

“My personal self is liable to go broke and lose my farm because I can’t sell my crop,” Cox said. “(The Food and Drug Administration) have no idea what they have done to this county. Beyond shutting Sunland down, they ruined a whole crop for farmers this year.”

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Christina Calloway: Portales News-Tribune
Farmer Kenneth Cox said he had hundreds of thousand of dollars worth of Valencia peanuts with no one to sell to. He said the only two peanut processors in the nation for the Valencia peanut are Sunland and Hampton Farms.

Sunland which began in 1985 as a co-op of peanut farmers who invested in the company as a vehicle to sell their peanuts had grown into the nation’s largest producer of organic peanut butter before its demise.

The company would enter into contracts with local growers to buy their peanuts.

Cox said he’s a third-generation farmer with land southeast of Dora.

He’s been working with Sunland for the past 20 years and was looking forward to supplying the company with what he considers a good peanut crop this year.

“(Sunland) was the best people in the world to work with. They did nothing but treat the farmers right,” Cox said.

When Sunland shuttered last fall after its products were linked to a salmonella outbreak that caused 41 illnesses in 20 states, producers were in limbo with the payment owed to them.

Cox said he received 50 percent of the money he was supposed to get per his contract.

He said it will now be a struggle to find anyone who will purchase his peanuts.

Sunland board member Wayne Baker said typically in this situation, farmers can put their peanuts into a government marketing assitance loan program in which farmers are paid $355 per ton using the crop as collateral. Current peanut prices are about $500 a ton.

“A good crop was made this year. It was a good production year,” Baker said.

Cox, however, sees a government loan as an unlikely option because of the current government shutdown. He said because peanuts are such a delicate crop, there is not much time left because his dug up crop is at risk for damage.

Cox thinks the shutdown of Sunland will nearly kill peanut production in the area, especially since it’s been on the decline the last 10 years because the crop has a higher water usage.

Roosevelt County farmer Rick Ledbetter is a former producer for Sunland but stopped growing peanuts about 13 years ago.

“There was a time when peanuts were the golden egg in Roosevelt County, but things have changed,” Ledbetter said.

He said a food safety scare is a hard blow to recover from.

“I feel bad for Sunland; that’s the worst nightmare you could have in the food production industry,” Ledbetter said. “Sunland was a very well-run company, but it’s hard to come back from a food safety problem.”

Ledbetter added that those who had contracts with Sunland and had already shipped their peanuts to its plants will be tangled in the bankruptcy process. This isn’t much better than those who hadn’t shipped their peanuts to Sunland yet because Cox said there are only two peanut processors in the nation that deal with Valencia peanuts; Sunland and Hampton Farms.

Cox said Portales Select Peanut Co., a subsidiary of Hampton Farms, is working with farmers but there’s only so many peanuts the company can purchase because it already has other contracts to honor.

An official of Portales Select Peanut Co. said there is a demand for Valencia peanuts, but is unsure of what will happen with farmers in the area because the shutdown of Sunland was too recent to tell.

Cox said he won’t grow peanuts anymore because there is not one place he’s found yet that will purchase his product.

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