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UPDATE: On Nov. 2, 2020, peanut farmers have reached a $50 million settlement with Birdsong Corp. to resolve antitrust claims against the company.
A class action lawsuit says two peanut shelling companies have conspired to fix the prices of peanuts.
The peanut shelling class action lawsuit claims that shelling companies Birdsong Corporation and Golden Peanut Company colluded together to stabilize and keep down the price of runner peanuts, despite “significant supply disruption,” that would otherwise raise the price.
Plaintiffs D&M Farms, Mark Hasty, and Dustin Land are peanut farmers who say they sold runner peanuts, reportedly one of the most popular kind of peanuts, to the companies. Allegedly, they and many other peanut farmers were financially injured by the peanut sellers’ price-fixing.
According to the peanut class action lawsuit, peanut shelling companies are key players in the peanut sale industry. Farmers reportedly sell their raw peanuts to peanut shellers, where the peanuts are processed and packaged into sacks.
Allegedly, peanut shellers are responsible for marketing and selling the shelled peanuts to companies like manufacturers or food sellers.
The peanuts class action states that Birdsong Corporation and Golden Peanut Company comprise around 80 to 90 percent of the market share of the peanut shelling industry.
In addition, the peanut shelling price-fixing class action lawsuit says that runner peanuts make up around 80 percent of the peanuts planted in the United States. According to the peanut farmers, the price-fixing involved runner peanuts, but may have also involved other types of peanuts.
Allegedly, peanut farmers face many risks in selling their products, because there is no futures market for peanuts — meaning that contracts are not made to buy and sell peanuts at a specific price in the future.
Additionally, the farmers face risks involving their supply, as their crops are subject to environmental factors. This allegedly means that peanut farmers have little insight into what prices they can expect when they sell peanuts.
According to the farmers’ collusion class action lawsuit, Birdsong Corporation and Golden Peanut Company took advantage of the lack of transparency in the market to conspire to fix prices. The farmers claim that they kept prices for peanuts low in 2014.
Allegedly, this collusion occurred after peanut prices had risen drastically. The farmers say that there was a “drought and production shortage in 2011, followed by a record harvest year in 2012,” which caused a drastic price increase.
This price increase was difficult for the peanut shellers to manage so they reportedly agreed to keep peanut prices low to help them manage production.
The customers say that because of the price collusion, the price for peanuts has been low since 2014, despite the fact that there have been disruptions in the supply that would normally cause the prices of peanuts to rise, including Hurricane Michael in 2018.
In addition, the peanut class action states that the defendants over-reported their peanut inventory to the USDA to give the illusion of a saturated market.
What do you think of the alleged price-fixing scheme? Let us know!
The peanut farmers are represented by Wyatt B. Durrette Jr. and Kevin J. Funk of Durrette Arkema Gerson & Gill PC; W. Joseph Bruckner, Brian D. Clark, and Stephanie A. Chen of Lockridge Grindal Nauen PLLP; Kimberly A. Justice, Jonathan M. Jagher, Douglas A. Millen, Michael E. Moskovitz, Robert J. Wozniak, and Brian M. Hogan of Freed Kanner London & Millen LLC.
The Peanut Sheller Price-Fixing Class Action Lawsuit is D&M Farms, et al. v. Birdsong Corporation, et al., Case No. 2:19-cv-00463, in the U.S. District Court for the Eastern District of Virginia.
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33 thoughts onPeanut Shellers Colluded to Fix Prices, Class Action Says
Please add Me and My Family.
i just bought some a few weeks ago please ad me to your list thank you