Arkansas is providing a $5 million short-term loan to Delta Peanut, a peanut processing facility in Jonesboro, to ensure the purchase and processing of this year’s peanut harvest. Governor Sarah Huckabee Sanders’ office announced the initiative on Thursday, highlighting its role in preserving the state’s peanut crop and supporting local farmers facing financial strain.
The funds are being drawn from the Quick Action Closing Fund, which is used to incentivize economic development. According to the governor’s office, the loan will be used exclusively for operational costs, such as staffing, utilities, and other overhead expenses.
The loan was prompted by news that the U.S. Department of Agriculture (USDA) was pulling Delta Peanut’s federal warehouse bond. In a letter to its network of nearly 90 growers, Delta Peanut stated it could not dry, process, or store this year’s peanut harvest without intervention. The USDA has since reinstated Delta Peanut’s warehouse license following their acquisition of a $2.7 million line of credit, but additional funds were needed to cover operating costs to handle the harvest.
Arkansas Agriculture Secretary Wes Ward emphasized the importance of the loan, stating that it will help prevent significant losses for farmers. "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 will be required to pay a $60-per-ton delivery fee as part of the loan agreement. The loan is structured with a repayment timeline not exceeding six months, with the state holding priority lender status for repayment. Funds will be repaid as delivery fees are collected and as payments are received from the USDA.
The governor’s office reported that approximately 40,000 acres of peanuts were planted in Arkansas this year, which is a 17% decrease compared to 2022, according to USDA data. Without intervention, nearly 80% of the state’s peanut crop could have been in jeopardy.
Delta Peanut, which is currently negotiating a potential acquisition by a third party, is expected to transfer operations following this harvest season. Governor Sanders highlighted the importance of protecting the crop's economic potential. "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 statement.
The loan program aims not only to provide immediate relief for farmers but also to safeguard the state’s growing peanut industry for future harvests.