Jonesboro, AR – Jonesboro Right Now – A $5 million loan from the Governor’s Quick Action Closing Fund will be used to facilitate Delta Peanut’s purchase of this year’s peanut harvest.
The move comes after Delta Peanut told its members and growers in early September that it would be closing, resulting in the layoffs of around 120 employees. The plant was “de-registered” by the U.S. Department of Agriculture (USDA) after its federal warehouse bond was pulled. In an update, Delta Peanut said it was winding down operations due to “funding issues.”
Initial layoffs are set to begin Oct. 10, or within 14 days of that. That closing date would be in the middle of peanut harvest when farmers need Delta to process and store their crops. The Arkansas Department of Agriculture previously told JRN it had been in contact with farmers and area leadership and was “actively looking for ways to assist where possible.”
| ADD US ON GOOGLE NEWS: Click here to see more local news from Jonesboro Right Now
According to a news release from the office of Gov. Sarah Huckabee Sanders, nearly 90 growers were contracted to grow peanuts the Jonesboro facility then de-shells and stores, which could no longer be stored at Delta Peanut.
The news release added that the only other federally bonded peanut warehouse in Arkansas was already operating at a full capacity, and most farmers could not feasibly finance transporting their crops out of state.
“Peanuts are an expanding crop market in Arkansas, and we can’t allow this year’s harvest to rot in the field and kill the entire industry,” Sanders said in a news release. “My administration is stepping in to offer this short-term bridge loan and facilitate the purchase of this year’s harvest. Looking forward, this is an industry we believe can stand on its own two feet and add diversity to the agriculture industry in the Delta.”
The loan is to be used solely for operational costs, such as staff, utilities, and overhead costs. Farmers must agree to a $60-per-ton delivery fee and a bank subordination agreement, giving the State of Arkansas priority lender status for repaying the operating loan.
The loan is not to exceed six months and will be repaid was payments are received from the USDA and delivery fees, according to the news release. Delta Peanut is negotiating with a third party to purchase the company and transfer operations after this year’s harvest concludes.
Delta Peanut was provided a $2.7 million line of credit allowing the USDA to reinstate its warehouse license, but it still requires funding to cover the operational costs associating with processing this year’s harvest, the news release noted.
“Gov. Sanders took immediate and decisive action to save nearly 80 percent of Arkansas’ peanut crop and help keep several farmers from being forced out of business,” said Secretary of Agriculture Wes Ward in the news release. “This bridge loan provides a responsible, short-term solution that will allow our producers to harvest this year’s crop, stay in business, and preserve the future of Arkansas’ peanut industry.”
The Delta Peanut facility is located at 9605 C.W. Post Road. According to its website, the facility sits on 71 acres in the Craighead Technology Park and shells over 180,000 tons of peanuts when running at maximum capacity.
It stores about 60,000 tons of peanuts in Jonesboro in three warehouses, as well as in partner buying points in Pocahontas and Marianna.
According to the Jonesboro Regional Chamber of Commerce, Delta Peanut broke ground on its facility in August 2019. It opened in the summer of 2020.
| DAILY BRIEF: Sign up for the Jonesboro Right Now Daily Brief Newsletter