Tommy Jumper believes Delta farmers have been looking for a crop to add to their rotation for both soil improvement and for what he calls “risk mitigation,” but until now, it was difficult for those set up for traditional crops to find a solution.
Peanuts were grown widely in the Mid-South some years ago, but fell out of favor for a number of reasons until around 2010 when area farmers, particularly those with sandy soils utilized primary for raising cotton, began to increase peanut acreage in the region. In the last seven or eight years, peanut growers in Northeast Arkansas and the Missouri bootheel have raised some 20,000 to 25,000 acres. Arkansas farmers have shown that “they can raise a good, dependable crop” of the legumes, Jumper said, but some could not justify the additional equipment expense needed to harvest peanuts.
“The farmer’s opportunity was limited to his sales price at the farm gate. You could only invest so much money in risk mitigation,” he said.
But with the $70 million Delta Peanut warehousing and shelling operation under construction in Jonesboro’s Craighead Technology Park, farmers who wanted the chance but need more return to justify adding a crop, now will have it.
For the past seven or eight years, Jumper studied the prospects of bringing a peanut shelling operation to the area. He’s now the CEO and managing member of Delta Peanut, a LLC owned by its member investors. Jumper said there had to be a shelling facility to make peanuts a reliable part of farmers’ crop rotations.
To put his peanut warehouse and shelling idea into motion, Jumper sought to raise $26.5 million from farmers and landowners from the bootheel of Missouri, the Delta of Arkansas and portions of north Louisiana. “We raised more than $28 million,” he said from member investors. Coupled with $45 million in debt to service, it made more than $70 million available for the project.
“My hat’s off to the landowners and farmers who chose to invest their money,” Jumper said. “I have never been involved in an endeavor that has had as many people come alongside to make this thing successful.”
The existing shelling operations to which local peanut farmers have sold their crops are located in South Georgia and West Texas, requiring that the peanuts be received at a local “buying point,” then transported hundreds of miles, costing some $100 per ton. A shelling plant in the middle of the Mid-South just makes sense.
“Having the shelling operation located in Jonesboro aligns Mid-South farmers with the food companies, those iconic brands that we all have in our pantries,” Jumper said.
For example, the Jif peanut butter plant in Memphis, Tenn., the Skippy peanut butter plant in Little Rock and the Planters peanut plant in Fort Smith are all within easy distance of the shelling operation.
“This area is convenient to a large portion of the country. They’re closer to us than those shelling operations in West Texas or South Georgia,” he said.
Virtually all Delta farms are totally irrigated, meaning that farmers not only have the ability to water their crops when needed but also have the ability to reduce the risk of aflatoxin, a toxin which can develop in food crops that are drought-stressed. This advantage means food producers can expect a reliable and steady supply of high-quality peanuts, Jumper said.
Now that farmers own the shelling plant, they now capture a larger piece of the value chain, Jumper said, through the shelling plant’s ability to sell peanuts directly to candy companies and other value-added processors.
“Like any other operation, that extra value in some years may be very significant,” he said.
Jumper is impressed that farmers were willing to invest and by doing so demonstrate their appetite for long-term investment in a product that could be grown and shipped to factories more economically than the same crop produced elsewhere.
“When you start adding all that — location, lower cost and a dependable supply — together, we had a bankable business model to secure financing,” he said.
When the shelling operation is fully up and running, it will shell nearly 200,000 tons of peanuts annually. Over 60,000 tons of those peanuts will be on-site in Jonesboro and stored in three warehouses and one “surge” warehouse. Additional buying points will store the balance in neighboring towns in Arkansas and surrounding states. The Jonesboro site will also have six drying buildings. The operation is expected to employ roughly 130 workers.
Jumper sees the future as bright for the plant and the farmers who are raising peanuts.
“I buy into the fact that it’s going to be a bigger and bigger challenge to feed the population of the world, and peanuts and peanut products can help meet the calling,” he said.
The need for the facility has been demonstrated, Jumper said.
“I just stepped in here to facilitate what’s trying to happen anyway,” he added.