Farmers Claim Price Fixing Is No Small Peanuts

According to a Complaint filed by a group of peanut farmers, the two leading peanut shelling companies conspired to fix prices of raw and harvested peanuts by underreporting their inventory to the U.S. Department of Agriculture in order to make the market appear to be oversupplied.  The plaintiffs claim that Birdsong Corp. and Golden Peanut “together control 80-90% of the United States Peanut Market.”  Peanuts are the twelfth most valuable cash crop grown in the United States, with a farm value averaging $1.1 to $1.4 billion U.S. dollars annually.

The farmers claim that representatives of the two defendant companies had ample opportunities to collude due to the close proximity of their facilities in several states as well as  their common membership in numerous trade associations such as the American Peanut Shellers Association, the American Peanut Council, the Peanut and Tree Nut Processors Association, The Peanut Institute and the National Peanut Buying Points Association.  The defendants sought to dismiss the complaint asserting, among other things, that low peanut prices were not caused by unlawful price fixing but were the result of natural market forces coupled with the effect of subsidies provided in the 2014 Farm Bill.  However, Judge Jackson of the Eastern District of Virginia denied defendants’ motion stating that “the totality of the factual assertions within the Complaint give rise to the plausible inference of a price fixing conspiracy.”  Thus, the litigation will continue and may go on “’till the cows come home.”