Sunland Bankruptcy Leaves Peanut Farmers Scrambling

November 4, 2013 04:58 AM
Sunland Bankruptcy Leaves Peanut Farmers Scrambling

by CHRISTINA CALLOWAY, Clovis News Journal

CLOVIS, N.M. (AP) — Peanut farmers have a different pay schedule than most. Once they harvest their peanuts in the fall, typically about mid to late-October, they are paid for their crop for the entire year.

When Sunland Inc., declared Chapter 7 bankruptcy early in October, growers in eastern New Mexico and West Texas were collectively out millions of dollars.

It's the money they use to pay back lenders, bills and to put food on the table.

For Causey farmer Hershel Carmichael, not being paid meant it took a substantial portion of savings earmarked for his grandchildren.

"The farmer is the loser here, we're talking about millions and millions of dollars," said 65-year-old Carmichael, who's been farming since 1981.

Though he declined to say how much, Carmichael said the money he's owed for the 2013 harvest is tacked on to the money he's owed for his 2012 crop. Carmichael said most farmers were paid about 58 percent of what was owed for 2012.

In addition to the money he is owed, Carmichael said he had money invested in Sunland because his savings are tied to old crop money he left with Sunland for tax purposes.

"I worked all my life to make it easier on my family," he said. "That's what I saved my whole life for and that's what Sunland did for us."

Carmichael is mostly upset because he feels Sunland wasn't honest with its growers. Court documents filed in federal court show the one-time giant of the peanut industry had been preparing for the possibility of bankruptcy for the past six months.

"They let us plant a crop, put money into it and get it to where the peanuts are ready to harvest and then filed for bankruptcy," said Carmichael, who said farmers were transporting their peanuts to the plant up until the day the company announced bankruptcy.

"They let you sink that much money into the crop knowing they couldn't buy the peanuts and throw you into an open market."

Carmichael said farmers are in a bind because the crop is ready but there are still no buyers. He said the only option he has now is to pay for storage.

Carmichael said the situation gluts the Valencia peanut market but he still has hope for the Valencia peanuts in this area because demand is high.

Naveen Puppala, peanut breeder for New Mexico State University, said Sunland's closure will certainly affect farmers this year but the market is large for the Valencia peanut, especially for those who grow them organically.

"Valencia has a demand and there is going to be a market," Puppala said. "It's a niche market, it has its own advantages."

Puppala said the Valencia peanut can't be grown anywhere else with the kind of flavor the eastern New Mexico and West Texas area produces.

State Sen. Stuart Ingle, R-Portales, said he feels for the farmers and understands how the community is affected by Sunland's closure but said nothing is underway as far as any aid.

"That's really tough to do, to help anyway we can," Ingle said. "It's hard for the state to come in and buy all those peanuts. It always affects way more people than you think. Bankruptcy is never valuable."

Ingle is optimistic that another peanut or food processor will purchase Sunland's plant and agrees the Valencia peanut is a well-known crop. But he knows it won't happen overnight.

"Nobody wanted this but it happened. Wished we had help from Washington D.C. and got the (Food and Drug Administration) to be more fair," Ingle said. "They didn't handle it correctly. They closed them down and I don't think they tried to help them reopen."

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