Case 2:19-cv-00463-RAJ-LRL Document 148 Filed 05/27/20 Page 1 of 44 PageID# 1520
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`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`Norfolk Division
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`IN RE PEANUT FARMERS
`ANTITRUST LITIGATION
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`Case No. 2:19-cv-00463-RAJ-LRL
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`SECOND AMENDED CLASS ACTION COMPLAINT
`AND DEMAND FOR JURY TRIAL
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`Case 2:19-cv-00463-RAJ-LRL Document 148 Filed 05/27/20 Page 2 of 44 PageID# 1521
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`I.
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`II.
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`III.
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`IV.
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`V.
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`VI.
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`TABLE OF CONTENTS
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`NATURE OF ACTION .................................................................................................... 1
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`JURISDICTION AND VENUE ....................................................................................... 3
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`PARTIES .......................................................................................................................... 5
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`A.
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`B.
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`Plaintiffs ................................................................................................................ 5
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`Defendants ............................................................................................................ 6
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`AGENTS AND CO-CONSPIRATORS ........................................................................... 7
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`TRADE AND COMMERCE ............................................................................................ 8
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`FACTUAL ALLEGATIONS ........................................................................................... 9
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`A.
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`Background on the Peanut Production Industry ................................................... 9
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`1.
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`2.
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`3.
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`4.
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`5.
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`Peanut Production in the United States. .................................................... 9
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`Federal Peanut Policy and the Farm Bills. .............................................. 10
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`Contract Marketing Under the Current Peanut Policy. ........................... 11
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`Peanuts Are a Commodity. ..................................................................... 12
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`The United States Peanut Production Market is a National
`Market Worth Over a Billion Dollars Annually. .................................... 12
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`B.
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`The Structure and Characteristics of the Peanut Shelling Market
`Render the Conspiracy Economically Plausible. ................................................ 12
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`1.
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`2.
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`3.
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`4.
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`5.
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`The Peanut Market is Characterized by Inelastic Demand. .................... 12
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`There Are No Significant Substitutes for Peanuts. ................................. 12
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`The Peanut Shelling Industry is Highly Concentrated and
`Has Experienced High Consolidation. .................................................... 13
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`The Peanut Shelling Industry is Characterized by a Lack of
`Pricing Transparency and Asymmetric Access to Key
`Market Information. ................................................................................ 14
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`The Peanut Shelling Industry Relies on Market Data
`Provided Voluntarily and Confidentially by Shellers. ............................ 15
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`6.
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`7.
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`8.
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`The Peanut Shelling Industry and Golden Peanut’s Parent
`Company Have Previously Been Investigated by the
`Government for Collusive Action. .......................................................... 16
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`Defendants Had Numerous Opportunities to Collude. ........................... 17
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`There Are High Barriers to Entry in the Peanut Shelling
`Market. .................................................................................................... 22
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`C.
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`D.
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`Despite Significant Market Changes, the Prices of Raw, Harvested
`Runner Peanuts Paid to Farmers Have Remained Low and Notably
`Stagnant Since 2014. ........................................................................................... 23
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`Birdsong and Golden Peanut Conspired With One Another to
`Manipulate USDA Data and Depress Prices Paid to Peanut
`Farmers. .............................................................................................................. 27
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`VII. CLASS ACTION ALLEGATIONS ............................................................................... 30
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`VIII. ANTITRUST INJURY ................................................................................................... 32
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`IX.
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`ACTIVE CONCEALMENT ........................................................................................... 33
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`Plaintiffs bring this action on behalf of themselves individually and on behalf of a plaintiff
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`class (the “Class”) consisting of Peanut farmers in the United States who sold raw, harvested
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`Runner Peanuts to Peanut shelling companies from at least January 1, 2014 through the present
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`(the “Class Period”). Plaintiffs bring this action for treble damages under the antitrust laws of the
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`United States against Defendants, and demand a trial by jury.
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`I.
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`NATURE OF ACTION
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`1.
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`Peanut shelling companies (or shellers) play a vital role in the peanut production
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`process. The majority of Peanut crops are processed in some manner prior to reaching customers.
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`Once Peanut farmers harvest their crops, approximately 90% of the Peanuts are usually moved to
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`a buying point and sold to a shelling plant. Inside the shelling plant, the Peanuts are processed and
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`packaged into sacks for shipment or storage. The Peanut shellers are responsible for marketing
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`and selling the shelled product to food companies or other manufacturers.
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`2.
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`As used in this Complaint, “Peanut” or “Peanuts” refers to all peanuts that are raw
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`and harvested and ready to be sold to shellers. “Peanuts” includes all four of the major types of
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`peanuts: runner, Spanish, Valencia, and Virginia.
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`3.
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`As used in this Complaint, “Runner,” “Runners,” or “Runner Peanuts” refers to
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`the runner type of peanuts that are raw and harvested and ready to be sold to shellers.
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`4.
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`Defendants Birdsong Corporation (“Birdsong”) and Golden Peanut Company, LLC
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`(“Golden Peanut”) are the two largest players in the shelling industry in the United States and
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`together hold 80-90% of the total Peanut shelling market share. Defendant Olam Peanut Shelling
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`Company, Inc., f/k/a McCleskey Mills, Inc. (“Olam” and together with Birdsong and Golden
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`Peanut, “Defendants”) is the third largest participant in the United States Peanut shelling industry
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`and holds at least 10% of the total Peanut Shelling market share.
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`5.
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`Since January 2014, the prices paid by shellers to Peanut farmers for Runners have
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`remained remarkably flat and unchanged, despite significant supply disruptions such as Hurricane
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`Michael, a Category 5 hurricane that hit a significant amount of Peanut crops in the Florida
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`panhandle/southern Georgia and Alabama area in 2018.
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`6.
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`From 2011 to 2013, the Peanut industry experienced drastic weather-related price
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`changes that made it difficult for Defendants and McCleskey Mills (now known as Olam) to
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`manage risk and plan for production. Upon information and belief, and as alleged in this
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`Complaint, Defendants and McCleskey Mills thereafter conspired and colluded with one another
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`to stabilize and depress Runner prices. Among other things, during the relevant time period,
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`Defendants over-reported Peanut and Runner inventory numbers to the USDA to create the false
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`impression of an oversupplied market. Defendants capitalized on the perceived oversupply to offer
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`artificially low Runner prices to farmers. Defendants also under-reported Peanut and Runner
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`prices to the USDA to further suppress prices and keep them low and less volatile.
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`7.
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`In addition, Defendants offered nearly identical shelling contracts, often within the
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`same day of one another, limiting the negotiating power and pricing options for farmers. Upon
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`information and belief, these contracts are released following National Peanut Buying Points
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`Association conferences, which are sponsored and attended by Golden Peanut, Birdsong, and
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`Olam.
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`8.
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`The Peanut shelling industry is particularly susceptible to a conspiracy due to a lack
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`of pricing transparency. Unlike other agricultural commodities, there is no futures market for
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`Peanuts. Rather, Peanut prices are set through private contracting between shellers and farmers,
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`although farmers rarely have negotiating power over contractual terms. As the dominant players
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`in this industry, Defendants dictate the prices offered to Plaintiffs and Class members.
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`9.
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`Defendants’ shelling facilities and the buying points they control through various
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`contractual arrangements are scattered throughout key United States Peanut production regions
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`and located in close proximity to one another, providing prime opportunities for collusion.
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`Defendants are heavily involved in the industry’s top trade associations through which they discuss
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`and share exclusive market information.
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`10.
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`Defendants’ wrongful and anticompetitive actions had the intended purpose and
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`effect of artificially fixing, depressing, maintaining, and stabilizing the price of Runners to
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`Plaintiffs and Class members in the United States.
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`11.
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`The effect of Defendants’ conspiracy has been devastating to many farmers. Unlike
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`prior to the conspiracy, there are no longer good price years to balance out the now-common bad
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`years of Runner prices. This has led numerous farmers to borrow from generations of equity built
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`up in their land, relying on that equity to pay themselves and keep their farms running. The
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`consequence is smaller farmers being run out of business as they use up the remaining equity in
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`their farms.
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`12.
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`As a result of Defendants’ unlawful conduct, Plaintiffs and the other members of
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`the Class were artificially underpaid for Runners during the Class Period. Such prices were below
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`the amount Plaintiffs and the Class would have been paid if the price for Runners had been
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`determined by a competitive market. Thus, Plaintiffs and Class members were directly injured by
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`Defendants’ conduct.
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`II.
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`JURISDICTION AND VENUE
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`13.
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`Plaintiffs bring this action under Sections 4 and 16 of the Clayton Act (15 U.S.C.
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`§§ 15 and 26), to recover treble damages and the costs of this suit, including reasonable attorneys’
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`fees, against Defendants for the injuries sustain by Plaintiffs and the members of the Class by
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`virtue of Defendants’ violations of Section 1 of the Sherman Act, 15 U.S.C. § 1, and to enjoin
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`further violations.
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`14.
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`This Court has jurisdiction under 28 U.S.C. §§ 1331, 1337, and Sections 4 and 16
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`of the Clayton Act, 15 U.S.C. §§ 15(a) and 26.
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`15.
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`Venue is appropriate in this District under Sections 4, 12, and 16 of the Clayton
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`Act, 15 U.S.C. §§ 15, 22, and 26 and 28 U.S.C. § 1391(b), (c), and (d), because one or more
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`Defendants resided or transacted business in this District, is licensed to do business or is doing
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`business in this District, and because a substantial portion of the affected interstate commerce
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`described herein was carried out in this District.
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`16.
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`This Court has personal jurisdiction over each Defendant because, inter alia, each
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`Defendant: (a) transacted business throughout the United States, including in this District; (b)
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`purchased substantial quantities of Runners and sold the shelled product throughout the United
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`States, including in this District; and/or (c) engaged in an antitrust conspiracy that was directed at
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`and had a direct, foreseeable, and intended effect of causing injury to the business or property of
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`persons residing in, located in, or doing business throughout the United States, including in this
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`District.
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`17.
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`The activities of the Defendants and their co-conspirators, as described herein, were
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`within the flow of, were intended to, and did have direct, substantial, and reasonably foreseeable
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`effects on the interstate commerce of the United States.
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`18.
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`No other forum would be more convenient for the parties and witnesses to litigate
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`this case.
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`A.
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`Plaintiffs
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`III.
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`PARTIES
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`19.
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`Plaintiff D&M Farms is a Florida partnership that sold Runners to Defendants
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`during the Class Period and suffered antitrust injury as a result of the violations alleged in this
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`Complaint.
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`20.
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`Plaintiff Mark Hasty is a resident of Florida and citizen of the United States. Mr.
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`Hasty is a Peanut farmer who sold Runners to Defendants during the Class Period and suffered
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`antitrust injury as a result of the violations alleged in this Complaint.
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`21.
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`Plaintiff Dustin Land is a resident of Florida and citizen of the United States. Mr.
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`Land is a Peanut farmer who sold Runners to Defendants during the Class Period and suffered
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`antitrust injury as a result of the violations alleged in this Complaint.
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`22.
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`Plaintiff Rocky Creek Peanut Farms, LLC is an Alabama limited liability
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`company that sold Runners to one or more Defendants during the Class Period and suffered
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`antitrust injury as a result of the violations alleged in this Complaint.
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`23.
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`Plaintiff Daniel Howell is a resident of Alabama and citizen of the United States.
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`Mr. Howell was a Peanut farmer who sold Runners to one or more Defendants during the Class
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`Period and suffered antitrust injury as a result of the violations alleged in this Complaint.
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`24.
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`Plaintiff L&K Farms Group, LLC is a Florida limited liability company that sold
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`Runners to one or more Defendants during the Class Period and suffered antitrust injury as a
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`result of the violations alleged in this Complaint.
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`25.
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`Plaintiff Lonnie Gilbert is a resident of Florida and citizen of the United States.
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`Mr. Gilbert is a Peanut farmer who sold Runners to one or more Defendants during the Class
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`Period and suffered antitrust injury as a result of the violations alleged in this Complaint.
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`B.
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`Defendants
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`26.
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`Defendant Birdsong Corporation is a Virginia corporation headquartered in
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`Suffolk, Virginia. Birdsong purchases Runners directly from farmers, and then cleans, shells, and
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`sizes the Runners to sell to food manufacturers. Birdsong operates six shelling plants throughout
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`Virginia, Georgia, and Texas. Birdsong also operates eighty-five buying points throughout
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`Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Arkansas,
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`Oklahoma, and Texas.
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`27.
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`Defendant Golden Peanut Company, LLC is a Georgia limited liability company
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`headquartered in Alpharetta, Georgia and registered to conduct business in Virginia. Golden
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`Peanut is a leading Peanuts and tree nuts sheller with shelling plants in Georgia, Texas, and
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`internationally. Golden Peanut also maintains more than 100 buying points. Golden Peanut is a
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`wholly-owned subsidiary of Archer Daniels Midland Company (“ADM”), a public corporation
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`and one of the world’s largest agricultural processors and food ingredient providers. As discussed
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`further below, ADM has a history of price-fixing, and paid $100 million (the largest fine ever at
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`the time in 1996) for a global conspiracy to eliminate competition in the food and feed additive
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`industries.
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`28.
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`Defendant Olam Peanut Shelling Company, Inc. is a Georgia corporation
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`headquartered in Fresno, California. Olam is the third largest Peanut sheller in the United States
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`with shelling plants in Georgia and Alabama. Olam also maintains roughly two dozen buying
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`points. Olam is a wholly-owned subsidiary of Olam International Limited (“OIL”), a leading agri-
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`business operating in 60 countries and headquartered and listed in Singapore. On December 5,
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`2014 OIL announced that it had signed a purchase agreement to acquire a 100% interest in
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`McCleskey Mills, Inc. for $176 million, the third largest peanut sheller headquartered in
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`Smithville, Georgia which maintained a 12% market share at the time. On June 9, 2016 OIL
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`announced that it acquired a 100% interest in Brooks Peanut Company, LLC for $85 million, the
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`sixth largest peanut sheller in the United States at the time based in Samson, Alabama. On
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`December 27, 2018, Brooks Peanut Company, LLC and McCleskey Mills, Inc. were merged, and
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`the corporate name was changed to Olam Peanut Shelling Company, Inc. Olam is liable for its
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`own actions during the Class Period and also for the acts of McCleskey Mills, Inc. and Brooks
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`Peanut Company, LLC, its predecessor companies.
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`29.
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`“Defendant” or “Defendants” as used herein includes, in addition to those named
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`specifically above, all of the named Defendants’ predecessors, including peanut shelling
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`companies that merged with or were acquired by the named Defendants and each named
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`Defendant’s wholly-owned or controlled subsidiaries or affiliates that purchased Runners in
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`interstate commerce, directly or through its wholly-owned or controlled affiliates, from peanut
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`farmers in the United States during the Class Period.
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`30.
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`To the extent that subsidiaries and divisions within each Defendant’s corporate
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`family purchased Runners from Peanut farmers, these subsidiaries played a material role in the
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`conspiracy alleged in this Complaint because Defendants wished to ensure that the prices paid for
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`such Runners would not undercut the artificially depressed pricing that was the aim and intended
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`result of Defendants’ coordinated and collusive behavior as alleged herein. Thus, all such entities
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`within the corporate family were active, knowing participants in the conspiracy alleged herein, and
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`their conduct in purchasing and pricing with regard to Plaintiffs and members of the Plaintiff Class
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`for Runners was known to and approved by their respective corporate parent named as a Defendant
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`in this Complaint.
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`IV. AGENTS AND CO-CONSPIRATORS
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`31.
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`Various other persons, firms, and corporations not named as defendants have
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`participated as co-conspirators with Defendants and have performed acts and made statements in
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`furtherance of the conspiracy. The Defendants are jointly and severally liable for the acts of their
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`co-conspirators whether or not named as defendants in this Complaint.
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`32. Whenever reference is made to any act of any corporation, the allegation means
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`that the corporation engaged in the act by or through its officers, directors, agents, employees, or
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`representatives while they were actively engaged in the management, direction, control, or
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`transaction of the corporation’s business or affairs.
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`33.
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`Each of the Defendants named herein acted as the agent or joint-venturer of or for
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`the other Defendants with respect to the acts, violations, and common course of conduct alleged
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`herein.
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`34.
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`Defendants are also liable for acts done in furtherance of the alleged conspiracy by
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`companies they acquired through mergers and acquisitions.
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`V.
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`TRADE AND COMMERCE
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`35.
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`During the Class Period, each Defendant, directly or through its subsidiaries or
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`other affiliates, purchased Runners and sold the shelled product in the United States in a continuous
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`and uninterrupted flow of interstate commerce and foreign commerce, including through and into
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`this judicial district.
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`36.
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`During the Class Period, Defendants collectively controlled a majority of the
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`market for Peanut shelling in the United States.
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`37.
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`By reason of the unlawful activities hereinafter alleged, Defendants substantially
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`affected interstate trade and commerce throughout the United States and caused antitrust injury to
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`Plaintiffs and members of the Class.
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`VI.
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`FACTUAL ALLEGATIONS
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`A.
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`Background on the Peanut Production Industry
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`1.
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`38.
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`Peanut Production in the United States.
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`There are four major types of Peanuts grown in the United States: Runner, Spanish,
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`Valencia, and Virginia. The type of Peanut grown is region-specific: Runners are grown
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`throughout the country, but especially in Georgia, Alabama, Florida, Texas, and Oklahoma;
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`Spanish Peanuts are primarily grown in Oklahoma and Texas; Valencia Peanuts are primarily
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`grown in New Mexico; and Virginia Peanuts are primarily grown in Virginia, North Carolina, and
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`South Carolina. The Runner type is the primary commercial Peanut raised, and makes up
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`approximately 80% of the United States’ planted acreage. As a result, this Complaint focuses on
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`Runner Peanuts, although Defendants’ conspiracy may also involve the other Peanut types;
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`Defendants are just as active in purchasing Spanish and Virginia Peanuts as they are with runner
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`Peanuts. Plaintiffs’ investigation continues.
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`39.
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`Peanut production in the United States is concentrated in the Southeast (Alabama,
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`Florida, Georgia, Mississippi, South Carolina), the Southwest (New Mexico, Oklahoma, Texas),
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`and the Mid-Atlantic (Virginia and North Carolina).
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`40.
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`Peanuts are produced either on irrigated land or dry land. Irrigated Peanuts, also
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`known as premium Peanuts, are less risky crops than dry-land Peanuts because the yield is more
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`certain, whereas dry-land Peanuts are more susceptible to drought conditions. As reported in 2016,
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`however, only 25% of United States Peanut acreage is irrigated due to limited land with water
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`available for irrigation. For example, southern Georgia and northern Florida have a higher
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`percentage of irrigated Peanuts due to a large aquifer in the region.
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`41.
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`The growing cycle of the Peanut, from planting to harvesting, takes approximately
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`four to five months. The crops are planted after the last frost of the year, usually in April or May.
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`When Peanuts are ready for harvest during the fall, farmers pull the plants out of the ground to dry
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`and collect the nuts. Once that is completed, the Peanuts are ready to be delivered to buying points
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`and sold to shellers.
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`42.
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`Buying points typically are either independent entities who contract exclusively
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`with one sheller, or are owned by a sheller. Buying points act on a sheller’s behalf to facilitate
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`transactions with farmers, but buying points do not take title to the Peanuts and have no pricing
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`authority; instead, buying points simply convey to farmers Peanut prices set by shellers. Farmers
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`deliver their Peanuts to buying points where the Peanuts are cleaned, graded, and delivered to
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`shelling plants. The Peanuts must be delivered to buying points immediately after harvest to
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`prevent the Peanuts from rotting.
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`43.
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`As noted above, shellers play a vital role in the peanut production process. Peanut
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`shelling involves breaking the outer hull or shell of Peanuts and removing the kernels.
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`Approximately 90% of harvested Peanuts are sold to shellers to be processed and packaged for
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`food companies or other manufacturers, such as Hershey Co., Mars, Inc., and Jif.
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`2.
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`44.
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`Federal Peanut Policy and the Farm Bills.
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`Peanut farmers face higher than normal farming risks and have limited information
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`with regard to price discovery because there is no futures market. In addition, there are the typical
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`agricultural risks that affect the success of a Peanut crop harvest, with weather (such as floods or
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`droughts) being the primary risk factor. Other risks include pests, new technology, machinery
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`efficiency, and the availability, quality, and efficacy of inputs.
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`45.
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`The federal government has provided some risk management and funding options
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`for Peanut farmers. From the 1930s to 2002, the Peanut industry operated under a system of
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`marketing quotas that controlled domestic supplies and prices. In 2002, Congress eliminated the
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`quota system under the Farm Security and Rural Investment Act (the “2002 Farm Bill”) such that
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`farm policy for Peanuts followed essentially the same structure as other covered commodities—
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`fundamentally changing the Peanut industry to become more market-oriented. The 2002 Farm
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`Bill provided a marketing loan rate of $355 per ton for all Peanuts, creating more competition
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`among farmers without restricting the supply by favoring just the quota holders.
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`46.
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`In 2014, Congress enacted the Agricultural Act of 2014 (the “2014 Farm Bill”),
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`which introduced additional modifications to Peanut payment programs and governs the majority
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`of current Peanut policy.1 Under the current policy, there are three types of financial support for
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`Peanut farmers. At a general level, the current policy offers loans guaranteed by the farmer’s crop
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`so that the government can repossess Peanuts as repayment if the farmer is unable to sell all of it.
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`The current loan rate for Peanuts, including Runners, is approximately $355 per ton, which has
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`remained the same since the 2002 policy. This loan program essentially provides a price floor
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`because the government takes ownership of the crop if prices drop below the statutory loan rate.
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`3.
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`47.
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`Contract Marketing Under the Current Peanut Policy.
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`After implementation of the 2002 Farm Bill, private contracting became the
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`standard for Peanut transactions between farmers and shellers. Option contracts are the most
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`commonly used type of contracts. Shellers use option contracts to manage risk and hedge against
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`poor crop years, by obtaining an exclusive option in advance to purchase Peanuts from farmers for
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`a specific type and amount. Shellers pay an option price above the government loan rate for the
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`right to purchase Peanuts, and farmers can pocket that premium. In theory, option contracts may
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`differ among shellers with regard to payment specifications, such as when payment is received,
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`how many tons are farmed, the right to purchase additional Peanuts, and shrink and storage options.
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`1 In 2018, Congress enacted another Farm Bill, but the 2018 Farm Bill for the most part left
`critical Peanut provisions in place and did not significantly impact federal peanut policy.
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`In practice, however, the contracts tend to be similar for each transaction, as farmers merely receive
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`pre-printed forms to complete and sign.
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`4.
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`Peanuts Are a Commodity.
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`48. Within each type (such as Runners), Peanuts are commodity products with little to
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`no product differentiation among growers, as recognized by the USDA and the Agricultural
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`Marketing Resources Center. After harvesting, Runners from different farmers are co-mingled
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`and stored together at buying point warehouses; there is no need to separate Runners based on the
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`grower.
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`5.
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`The United States Peanut Production Market is a National Market Worth
`Over a Billion Dollars Annually.
`
`49.
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`Peanuts are the twelfth most valuable cash crop grown in the United States, with a
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`farm value averaging $1.1 to $1.4 billion U.S. dollars annually.
`
`B.
`
`The Structure and Characteristics of the Peanut Shelling Market Render the
`Conspiracy Economically Plausible.
`
`1.
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`50.
`
`The Peanut Market is Characterized by Inelastic Demand.
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`Consumer demand for peanuts and peanut products is relatively unaffected by price
`
`because peanuts are historically considered to be an inexpensive good, even when prices fluctuate,
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`comprising a small share of consumers’ budgets. This inelasticity is a critical long-running factor
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`that influences Peanut output such that even small changes in supply can result in large price
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`fluctuations.
`
`2.
`
`51.
`
`There Are No Significant Substitutes for Peanuts.
`
`There are no significant substitutes for Peanuts. Although there are potential
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`substitute products, such as soybeans, sunflower seeds, almonds, cashews, or other tree nuts, the
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`characteristics of those products lack the unique characteristics of peanuts. Peanuts are distinctive
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`in that they can be both consumed and processed into other foods, from peanut butter to candies.
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`Peanuts also have more protein than any other nut, making peanuts a unique source of nutrition.
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`Peanuts are an inexpensive protein upon which many consumers in the U.S. rely. Moreover,
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`Peanuts can be processed for industrial uses, such as paints, plastics, and fuel.
`
`3.
`
`The Peanut Shelling Industry is Highly Concentrated and Has Experienced
`High Consolidation.
`
`52.
`
`The concentration of shellers has significantly increased over the past fifty years as
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`non-farm sectors of the industry consolidated to promote higher efficiency. The USDA reported
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`in 2016 that Peanut farmers operate in a thin market with a very small number of shellers,
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`sometimes facing no options at all because there is only one potential buyer available for their
`
`region. In 1970, there were 92 active shelling companies, a stark contrast from the two very large
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`and roughly one dozen other small shellers that exist today. At least five of these smaller shellers
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`are family or farmer-owned businesses that are limited to a single processing facility. Another two
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`of these shellers, Severn Peanut Company and Southern Peanut Company, operate their own food
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`production labels and shell primarily, if not exclusively, for their own food labels.
`
`53.
`
`There are currently only two major shellers, Defendants Birdsong and Golden
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`Peanuts. Between 2000 and 2003, Defendants controlled approximately 73% of all Peanuts
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`purchased for shelling and two-thirds of all buying points. Currently, Defendants Birdsong and
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`Golden Peanut together control 80-90% of the United States Peanut shelling market. Defendant
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`Olam is the third largest participant in the United States Peanut shelling industry and controls at
`
`least 10% of the United States Peanut shelling market.
`
`54.
`
`There have been several acquisitions by major companies and industry players in
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`the past five years. Since the 1950s, Defendant Golden Peanut (previously known as Gold Kist
`
`Peanuts) has acquired various shelling plants and peanut mills. In 1992, Golden Peanut purchased
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`Dothan Oil Mill (also known as Domco), one of the key shelling companies at the time. In 2015,
`
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`Golden Peanut acquired Clint Williams Company (also known as Texoma Peanut Company) after
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`Clint Williams filed for bankruptcy. The bankruptcy threatened to cripple the Peanut industry in
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`Texas, Oklahoma, Arkansas, and Mississippi until the USDA paid out affected farmers for their
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`lost Peanuts.
`
`55.
`
`As mentioned above, in 2014, Defendant Olam’s ultimate parent company OIL
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`announced it would acquire McCleskey Mills, Inc., the third largest peanut sheller in the United
`
`States at the time and in 2016, OIL acquired Brooks Peanut Company, the sixth largest Peanut
`
`sheller in the United States at the time. On December 27, 2018, Brooks Peanut Company, LLC
`
`and McCleskey Mills, Inc. were merged, and the corporate name was changed to Olam Peanut
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`Shelling Company, Inc. These recent acquisitions have strengthened Olam’s position as the third
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`largest Peanut sheller in the U.S., with a market share of at least 10%.
`
`4.
`
`The Peanut Shelling Industry is Characterized by a Lack of Pricing
`Transparency and Asymmetric Access to Key Market Information.
`
`56.
`
`Because there is no futures market or public exchange for buying and selling
`
`Peanuts, price discovery is difficult. The use of private contracts in the industry means there is no
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`true market price.
`
`57.
`
`Large shellers hold an advantage over individual farmers because the shellers have
`
`easier access to resources and market information. A 20