USDA helps peanut producers rebuild after company bankruptcy
USDA is helping to restore nearly 100 percent of the value of their peanuts after the bankruptcy of a peanut sheller and licensed warehouse operator.
“These farmers played by the rules, they honored their contracts, but because of circumstances outside their control, were put in a difficult position, which is why USDA stepped in on their behalf,” said Administrator Val Dolcini.
“Today’s action illustrates how the basic protections of the 100-year-old U.S. Warehouse Act can still provide important safeguards for farmers today.”
More than 83,000 tons of peanuts were stored by the warehouse operator, Clint Williams Company, and its affiliates, the Texoma Peanut Company, Clint-Co Peanut Co. and the Clint Williams Co - Western Division, which filed for bankruptcy in November 2014.
Farmers had pledged more than 81,700 tons of peanuts as collateral to receive USDA marketing assistance loans. The loans provide interim financing so that producers can store peanuts and meet cash flow needs without having to sell crops during harvest, when market prices are low.
Peanut producers potentially lost thousands of dollars when delivery contracts were not honored by the failed company and the peanuts remained in storage.
Under the United States Warehouse Act, USDA is responsible for protecting all depositors in the licensed storage facilities, including ineligible producers or those who chose not to receive loans.
USDA entered into an agreement with the new warehouse owners to provide for additional storage time for an orderly sale of peanuts, plus incentives to encourage sales of peanuts pledged as collateral.
The agreement also provided an initial 85 percent payment to producers that sold peanuts with the remaining amount to be paid after any shortages and the bond claim were resolved.
With the USDA successfully receiving the entire bond, the final payments are now being made to producers. ■