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May 05, 2006   Email to Friend 

From AFC Reports
(334) 613-4212
May 05, 2006

MONTGOMERY, Ala. -- Dennis Finch, general manager of Anderson's Peanuts, announced that Anderson's Peanuts will bring its shelling operations to a halt in early May for an undetermined period of time.

"We regret this action because we must lay people off, but our losses are mounting with every ton of peanuts we shell, and we must stop the bleeding.

"Because we harvested an abundant crop last fall, some would believe we have an oversupply of peanuts," stated Finch, "but too many peanuts are not the problem. The problem is the failure on the part of USDA to carry out the law passed by Congress in the 2002 Farm Bill. If USDA was managing the program as laid out by Congress, peanuts would be moving domestically and into international markets as well."

Under Subtitle C (Peanuts), the Secretary of Agriculture shall permit producers to repay a marketing assistance loan for peanuts at a rate that is the lesser of the loan rate ($355) or a rate (national posted price) that the Secretary determines will (1) minimize potential loan forfeitures, (2) minimize the accumulation of stocks of peanuts by the Federal Government, (3) minimize the cost incurred by the Federal Government in storing peanuts and (4) allow peanuts produced in the United States to be marketed freely and competitively, both domestically and internationally.

According to Mr. Finch, USDA is simply ignoring the law, as clearly stated by the above-listed, four criteria. "There is absolutely no transparency. The government's actions seem to be totally budget driven. Most people in our industry believe forfeitures to the government from the '05 crop will be 600-800 thousand tons compared to only 100,000 tons from the '04 crop. Warehouses needed to accommodate the 2006 peanut crop are going to be occupied by 2005 crop peanuts. There is going to be a train wreck, and USDA is the engineer."

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