This case study is motivated by recent developments in the U.S. peanut industry involving allegations of an illegal exercise of buyer market power by the three largest peanut buyers (peanut shellers) in the country. They purchased raw peanuts directly from peanut growers. Peanut growers filed a class action antitrust lawsuit alleging that these buyers engaged in a price-fixing conspiracy aiming to suppress and stabilize prices of peanuts paid to peanut growers beginning in 2014. The case study introduces economic, business, and legal issues related to the alleged peanut price-fixing cartel. The case study presents economic models that help explain conduct and performance of the peanut industry in the analyzed setting, and it includes basic market and price analysis. The intended audiences are undergraduate and graduate students, as well as extension and outreach communities. A teaching note summarizes student learning objectives, teaching strategies, and student background knowledge. The teaching note also includes multiple-choice questions, as well as suggested answers and guidance to analytical, discussion, and multiple-choice questions.

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Bunge, J. 2021. “ADM to Pay $45 Million to Settle Peanut Farmers’ Price-Fixing Claims.” Wall Street Journal, March. https://www.wsj.com/articles/adm-to-pay-45-million-to-settle-peanut-farmers-price-fixing-claims-11615568604

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Revoredo Giha, C.L., D.A. Nadolnyak, and S.M. Fletcher. 2005. “Contract Marketing in the US after the 2002 Farm Act: The Case of Peanuts.” Paper presented at Annual Meeting of the American Agricultural Economics Association, Providence, Rhode Island, July 24–27. https://ageconsearch.umn.edu/record/19187?ln=en

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U.S. Department of Agriculture, Economic Research Service. 2022a. Oil Crops Data: Yearbook Tables: Peanuts. Washington DC. https://www.ers.usda.gov/data-products/oil-crops-yearbook/

U.S. Department of Agriculture, Economic Research Service. 2022b. Commodity Costs and Returns: Historical Costs and Returns for Peanuts. Washington DC. https://www.ers.usda.gov/data-products/commodity-costs-and-returns/

U.S. Department of Agriculture, Farm Service Agency. 2016. Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments. 2014 Farm Bill Fact Sheet. Washington DC.

U.S. Department of Agriculture, Farm Service Agency. 2019. Peanut Buyers and Handlers Program Guidelines for 2019 and Subsequent Crop Years. Washington DC. https://www.fsa.usda.gov/Internet/FSA_File/1-ppg_r00_a04.pdf

U.S. Department of Agriculture, Farm Service Agency. 2020. USDA Announces Loan Rates for 2020 Crop Peanuts. Washington DC. https://www.fsa.usda.gov/news-room/news-releases/2020/usda-announces-loan-rates-for-2020-crop-peanuts

U.S. Department of Agriculture, Farm Service Agency. 2022. Peanut Reports. Washington DC.https://www.fsa.usda.gov/FSA/epasReports?area=home&subject=ecpa&topic=fta-pn

U.S. Department of Agriculture, National Agricultural Statistics Service. 2022a. Quick Stats Database. Washington DC. https://quickstats.nass.usda.gov/

U.S. Department of Agriculture, National Agricultural Statistics Service. 2022b. Census of Agriculture, 2017. Washington DC. https://www.nass.usda.gov/Publications/AgCensus/2017/#full_report

U.S. Department of Agriculture, National Agricultural Statistics Service. 2022c. Peanut Prices. Washington DC. https://usda.library.cornell.edu/concern/publications/5t34sj58c

U.S. Department of Agriculture, National Agricultural Statistics Service. 2022d. Peanut Stocks and Processing. Washington DC. https://usda.library.cornell.edu/concern/publications/02870v87z

Court Documents and Relevant Webpages

“In Re Peanut Farmers Antitrust Litigation” webpage. 2022. https://www.peanutfarmersantitrustlitigation.com/

“In Re Peanut Farmers Antitrust Litigation, Notice of Class Certification.” 2022. https://angeion-public.s3.amazonaws.com/www.PeanutFarmersAntitrustLitigation.com/docs/Peanuts+Long+Form+Notice-1-5-21_FINAL.pdf

“In Re Peanut Farmers Antitrust Litigation.” 2020. Second Amended Class Action Complaint and Demand for Jury Trial, filed   on May 27. https://angeion-public.s3.amazonaws.com/www.PeanutFarmersAntitrustLitigation.com/docs/2020-05-27+-+2nd+amended+complaint.pdf