Peanut Farmer Antitrust Lawsuit
Several peanut farmers, along with a determined legal team, discovered that since the beginning of 2014, the prices paid by peanut shelling companies have remained remarkably low. In their investigation into the stagnant prices, they noticed that there were significant market changes and supply disruptions that should have affected the price that farmers were receiving for their peanuts. From these discoveries, a lawsuit was brought against Birdsong and Golden Peanut that alleged they coordinated with each other and over-reported their peanut and runner inventory to the USDA to create the illusion of an oversupplied market to drive down the purchase price of peanuts from farmers. This allowed these large companies to hold the defendants to artificially low runner prices to farmers.
The defendants also under-reported peanut and runner prices to the USDA to further suppress prices and keep them low and less volatile. Birdsong and Golden Peanut offer nearly identical shelling contracts to farmers, often within the same day of one another, to limit the negotiating power and pricing options for farmers.
Because the peanut selling industry is highly consolidated into only a handful of companies and a lack of transparent pricing, the industry is particularly susceptible to these types of anti-trust conspiracies. As a result, peanut prices are dictated through private contracting between shelling companies and peanut farmers. Controlling almost 90% of the market, the defendants were able to control the prices offered to peanut farmers.
Judge Raymond A Jackson, District Judge of the United States District Court for the Eastern District of Virginia, denied the defendant’s motions to dismiss the complaints on May 13, 2020. He ruled that the plaintiffs sufficiently alleged that Golden Peanut and Birdsong shellers colluded to lower the prices they paid to peanut farmers. Two weeks later, the plaintiffs class was amended to include Oman Peanut Shelling Company, who were also included in the collusion allegations to control prices offered to peanut farmers.
On April 5, 2021, the Court approved settlements with Olam and Birdsong totaling $57,750,000. The Golden Peanut Settlement, along with the Olam and Birdsong settlements, total $102,750,000, which will be distributed to Class Members who file valid Claims in accordance with a distribution plan approved by the Court.