The United States last year produced around 6.13 billion pounds of peanuts last year, down from 7.12 billion pounds three years earlier, according to data from Statista. However, how much farmers receive for their crops has remained stubbornly low even as peanut consumption is at an all-time high.
USDA reported in November that farmers got an average of 21 cents a pound, a level it has fluctuated around for several years. The price comes as the National Peanut Board noted each person consumed 7.6 pounds of peanuts in 2020 as home-bound consumers turned to its healthy halo and versatility as an option throughout the day. More than half of the peanuts people eat comes in peanut butter, the trade group said.
ADM and the other companies have argued market forces, rather than collusion, have driven down prices, The Wall Street Journal noted. Still, the settlements reached with Olam, Birdsong and now ADM may go a long way in explaining, at least in part, why peanut prices have remained so low.
In a statement provided to Food Dive, ADM said while it denied any wrongdoing, it agreed to settle the lawsuit rather than expend additional time, money, and resources on the case. “ADM has been building strong relationships with farmers since the company’s inception in 1902, and we continue to make farmers the center of our business,” the company said.
It’s possible that after Olam and Birdsong reached separate deals last year, ADM felt it had little choice but to agree to its own deal. The settlement continues a string of agreements reached in the food processing industry. Tyson and Pilgrim’s Pride have separately reached deals with poultry buyers to settle price-fixing claims. And last December, court documents revealed JBS will pay $24.5 million to compensate direct purchasers for damages in a price-fixing class action suit involving pork.
The Justice Department also reportedly is looking into the buying habits of beef processors in cattle. In recent years, the DOJ, the USDA and attorneys representing groups of consumers or business customers also have brought cases against dairy and tuna.
It’s uncertain whether the recent settlements and investigations will change the business practices at these food processing giants. In many cases, their respective markets are controlled by just a few processors, a factor critics argue gives them an opportunity to manipulate prices in whatever way benefits them. In peanuts, Birdsong and ADM’s Golden Peanut unit handle 80% to 90% of the country’s crop, The Wall Street Journal noted, citing the farmers’ lawsuit.