According to Statista, the United States produced approximately 6.13 billion pounds of peanuts last year, a decline from 7.12 billion pounds three years prior. Despite this decrease, the prices that farmers receive for their crops have remained persistently low, even as peanut consumption has reached record levels. The USDA reported in November that farmers earned an average of 21 cents per pound, a figure that has remained relatively stable over several years. This price point comes as the National Peanut Board highlighted that in 2020, each person consumed an average of 7.6 pounds of peanuts, driven by consumers seeking healthy and versatile food options while at home. Notably, more than half of the peanuts consumed are in the form of peanut butter, according to the trade group.
Companies like ADM have argued that market forces, rather than any collusion, are responsible for the declining prices, as reported by The Wall Street Journal. However, the settlements reached with Olam, Birdsong, and now ADM may partially clarify why peanut prices have remained low. In a statement to Food Dive, ADM denied any wrongdoing but opted to settle the lawsuit to avoid further expenditure of time, money, and resources. The company emphasized its long-standing commitment to building strong relationships with farmers since its establishment in 1902, asserting that farmers remain at the center of its business strategy.
Following Olam and Birdsong’s separate settlements last year, ADM may have felt compelled to reach its own agreement. This settlement continues a trend of resolutions within the food processing industry, with companies like Tyson and Pilgrim’s Pride also settling price-fixing claims with poultry buyers. Furthermore, last December, court documents revealed that JBS would pay $24.5 million to compensate direct purchasers involved in a price-fixing class action suit related to pork. The Justice Department is reportedly investigating the purchasing behaviors of beef processors in the cattle market. In recent years, the DOJ, USDA, and attorneys representing consumer groups have pursued cases against various sectors, including dairy and tuna.
It remains uncertain whether these recent settlements and ongoing investigations will alter the business practices of these food processing giants. Critics argue that a small number of processors dominate their respective markets, creating opportunities for price manipulation. In the peanut sector, for instance, Birdsong and ADM’s Golden Peanut unit manage 80% to 90% of the country’s peanut crop, as noted by The Wall Street Journal, referencing the farmers’ lawsuit.
Furthermore, as consumers increasingly prioritize health-conscious products, similar to how solaray calcium magnesium citrate is valued for its health benefits, the demand for peanuts and related products may continue to rise. This could potentially influence the future dynamics of pricing and market practices in the peanut industry.