THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, August 23, 1995 TAG: 9508230447
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MAC DANIEL, STAFF WRITER
DATELINE: SUFFOLK LENGTH: Medium: 76 lines
About 100 full-timers and as many seasonal workers have lost their jobs after two major peanut companies shut down in the wake of an industry shakeout.
The family-owned Parker Peanut Co. on Factory Street, one of a dwindling number of peanut companies in this self-titled ``World's Largest Peanut Market,'' announced its closure last week after 62 years. That will affect about 20 full-time employees and 75 seasonal workers.
Birdsong Peanuts Division of Birdsong Corp. assumed Parker's contracts to buy peanuts from farmers this fall.
Virginia Peanut Processors, manufacturer of mostly salted-in-the-shell peanuts, mothballed its Beech Street operation because of reduced consumption, said August Battaglia, company vice president.
``We've cut back now, and we'll see where things shake out,'' Battaglia said Tuesday from his Chicago office. ``If things don't shake out, we'll mothball it permanently.''
Virginia Peanut Processors employed between 50 and 75 full-time workers and about 25 seasonal helpers. Operations were curtailed about six months ago, and the plant is now technically closed, Battaglia said.
Parker officials won't say whether the closure is permanent. But one thing is certain: Parker will not operate during the 1995 peanut crop harvest, company officials say.
They blame its shutdown on new federal trade agreements that have flooded the American market with cheaper foreign nuts. Changing eating habits is also a problem.
Fat-conscious Americans are eating fewer peanuts and peanut products. And because of a lack of aggressive marketing, peanuts are not being consumed as much as pretzels, tortilla chips or raisins.
Benford E. Parker Jr., vice president and the third-generation of Parkers to help run the company, said he can't see much future since cheaper foreign peanuts have drastically undercut the domestic peanut market.
These are tough times for the industry. The 10-year-old Virginia-Carolina Peanut Farmers Co-operative Association of Franklin last week filed for protection under federal bankruptcy laws, saying it planned to stay in business while repaying creditors as much as $13.6 million.
Nationwide, peanut companies have cut back on business or closed plants. Golden Peanut, a partner of Gold Kist Peanuts in Suffolk, recently closed a Georgia plant. Five other shelling plants have recently closed in Florida, Georgia and Alabama, according to industry analysts.
``The loss of any business within any given industry is always distressing,'' said Thomas Waller, director of economic development for Suffolk. ``It not only affects that business, but it affects the growers of peanuts in the city. And, of course, very severely, you lose that employment base. It's a sad aspect of the continuing reshuffling of our economy.''
The General Agreement on Tariffs and Trade and the North American Free-Trade Agreement are the culprits, peanut company officials say. Both agreements allowed foreign competitors into the American market at lower prices.
In addition, the government price support on peanuts is well above what foreign peanuts garner on the open market. The government price support for domestic peanuts is $678 per ton while foreign peanuts can be bought for between $350 and $450 per ton.
Whittemore Waller, chairman of the board for peanut broker Whittemore Waller & Company of Virginia Beach, said the trade agreements aren't helping. However, sellers bought too much of last year's abundant peanut crop and are stuck with a large supply competing against cheaper foreign nuts of the same quality, he said.
The trade agreements are ``hardly that big a factor now,'' said Whittemore, adding that they will get worse as the import quotas increase every year.
``Eventually, the treaties will add up to something really big,'' he said. ``But you can't blame it all on them now.'' ILLUSTRATION: [Peanuts]
by CNB