The Peanut Program Works
The Price Loss Coverage Program (PLC), otherwise known as the Peanut Program, works for farmers, our communities and consumers across the country.
The Peanut Program is a common-sense market-based solution that promotes stability and predictability in an otherwise volatile market. It gives farmers the ability to borrow from lenders, contract with Shellers, buy from chemical and feed companies, and invest in farm equipment, which helps drive economic growth in our communities. And partly because of the loans made under the Peanut Program, domestic demand and U.S. exports continue to thrive. The Peanut Program works — for farmers and their families, for our communities, and for consumers who love peanuts and peanut products.
The Peanut Market is Unique
Unlike most other commodities, peanuts are not publicly traded, which means that peanut pricing is determined post-planting for nearly all farmers – long after theyʼve heavily invested in their crop – making long-term planning impossible. Without the Peanut Program would put peanut farmers would be at the mercy of a few Shellers, which are responsible for processing peanuts, and could therefore dictate market prices.
Why the Peanut Program Works
The Peanut Program ensures stability in times of prosperity and economic downturn. The Peanut Program offers farmers the price floor they need to borrow from banks, buy from suppliers and sell to processors.
The system in place gives farmers the ability to make long-term planting decisions that maintain stable prices for consumers and help local businesses and farming communities thrive – even in down-market years. The program is market-based meaning it is of minimal cost when demand and market prices are high, as is the case in most years, yet keeps farmers out of bankruptcy when the economy dips.