Arkansas offering $5M loan to Jonesboro peanut processing facility

Arkansas is offering a $5 million short-term loan to a Jonesboro peanut processing facility to assist its purchase of this year’s peanut harvest as it works to be acquired by an outside firm, Gov. Sarah Huckabee Sanders’ office said Thursday.

Arkansas is loaning the money to Delta Peanut from the Quick Action Closing Fund, a fund used for economic development incentives.  

Delta Peanut told its nearly 90 growers that it would not be able to dry, process or store their harvest after the U.S. Department of Agriculture said it was pulling the company’s federal warehouse bond. 

The loan will be used solely for operational costs, such as staff, utilities and overhead, the governor’s office said. Arkansas Agriculture Secretary Wes Ward said the move will save nearly 80% of the state’s peanut crop and help keep several farmers from being forced out of business.

“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.

As part of the agreement, farmers will be required to agree to a $60-per-ton delivery fee. The agreement will also give the state priority lender status for repayment of the loan.

The length of the loan agreement with Delta Peanut is not to exceed six months and will be repaid as payments are received from the USDA and delivery fees.

“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,” Ward said.

Farmers planted 40,000 acres of peanuts this year, a nearly 17% decrease from the previous year, according to the U.S. Department of Agriculture. 

Delta Peanut is negotiating with a third party to purchase the company and transfer operations after this harvest season, according to the governor’s office. Delta Peanut received a $2.7 million line of credit to allow USDA to reinstate its warehouse license, but the company still needs funding to cover operational costs to allow it to process this year’s harvest.