ARS | Publication request: COST OF AFLATOXIN TO THE FARMER, BUYING POINT, AND SHELLER SEGMENTS OF THE SOUTHEAST UNITED STATES PEANUT INDUSTRY

Submitted to: Peanut Science
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: August 27, 2001
Publication Date: N/A

Interpretive Summary: Strict quality regulations mandated by a federal marketing agreement ensure the consumer that only edible quality peanuts free of toxins are allowed entry into edible markets. To meet these regulations often requires diversion of peanuts into non-edible, lower value markets or considerable processing of peanuts. Aflatoxin in peanuts imposes considerable economic cost to the Southeast United States peanut industry. The 1993-1996 crop years were analyzed to estimate the net cost due to aflatoxin to the farmer, buying point, and sheller segments of the Southeast peanut industry. The annual cost to the farmer, buying point, and sheller segments averaged $2.595, $0.533, and $22.697 million, respectively. Total annual costs to the Southeast averaged $25.825 million. The annual net cost of aflatoxin on a per acre basis in the Southeast averaged $28.06. Costs associated with aflatoxin in the Southeast peanut industry has impacted the competitiveness of Southeast peanuts. Cost effective methods to reduce aflatoxin in Southeast peanuts would decrease cost associated with aflatoxin thus increasing the competitiveness of the Southeast peanut industry at all industry levels. Aflatoxin in peanuts imposes considerable economic cost to the Southeast United States peanut industry. Quality regulations mandated by the Peanut Administrative Committee (PAC) ensure the consumer that only edible quality peanuts are allowed entry into edible markets. The 1993-1996 crop years were analyzed to estimate the net cost due to aflatoxin to the farmer, buying point, and sheller segments of the

Technical Abstract: Aflatoxin in peanuts imposes considerable economic cost to the Southeast United States peanut industry. Quality regulations mandated by the Peanut Administrative Committee (PAC) ensure the consumer that only edible quality peanuts are allowed entry into edible markets. The 1993-1996 crop years were analyzed to estimate the net cost due to aflatoxin to the farmer, buying point, and sheller segments of the Southeast peanut industry. The farmer segment net cost due Segregation III lots averaged $2.595 million per year. Segregation III lots are generally placed under loan in the Commodity Credit Corporation (CCC). Buying points are paid to handle peanuts for CCC but a rate per ton lower than commercial commissions thus a loss is incurred to the buying point segment. Buying point losses from handling Segregation III lots average $532,585 annually. The Southeast peanut sheller segment incurred the highest cost associated with aflatoxin. The average net cost to the Southeast sheller segment over the 4 year period was $22,697,737 per year. Segregation III lots and aflatoxin cost the farmer, buying point, and sheller segments of the Southeast United States peanut industry $25,825,259 annually. On a total Segregation I farmer stock basis, aflatoxin cost the Southeast peanut industry an average of $23.17 per ton while the net cost of aflatoxin on a per acre basis averaged $28.06 per acre.