An estimated 550 peanut producers, industry members, local, state and national leaders and members of the local community convened on Barrington Road in Coffee County, Ga., in late April to celebrate the Grand Opening of Premium Peanut. Attendees enjoyed lunch, congratulatory remarks and tours of the plant.
Georgia Governor Nathan Deal congratulated the producers, community and leaders for “coming together to create jobs.” He said the cooperation by all segments sets a pattern for other industries to consider.
Significant Grower Involvement
Karl Zimmer, CEO of Premium Peanut, said, “In 15 months, Premium Peanut has grown from an idea to a world class operation with the latest technological advancement in the peanut shelling industry.”
That technological advancement includes a plant with extensive cleaning and sorting operations that occur at each stage of the peanut process: all the way from the farmer’s stock at the buying points to redskins at the shelling facility.
Zimmer said the primary driver to establish Premium Peanut was to create a stable market for the growers in the region.
“We offer grower stability in that they know the sheller will buy their peanuts; and as such, we can provide our customers with stability in knowing that they will get high quality peanuts consistently, year after year,” he said.
Buying Point Investment
Zimmer said Premium Peanut, with a plant investment of more than $50 million and another $20 million invested in seven buying points, is now operating six days a week and is sold out through July.
Kent Fountain, Premium Peanut’s board chairman, praised the seven buying points willing to invest and “help make things better for their growers.” The buying points investing in Premium Peanut are as follows: Dixon Farm Supply, Irwinville Peanut & Grain, Douglas Peanut and Grain, Southeastern Gin & Peanut, Jeff Davis Peanut and Grain, Dixie Peanut Producers and Deep South Peanut.
Zimmer said, “We work with over 200 shareholders; something unique in that individual shareholders have to grow the peanuts on land they farm for Premium Peanuts.
“Our short-term capacity stands at 200,000 tons of farmer-stock peanuts per year, but we believe our maximum capacity is closer to 300,000 tons annually. We will run our plant as efficiently as possible, though, so we expect to process between 150,000 to 200,000 tons from the 2016 crop.”
Data-Driven Decision Making
Zimmer says one of the challenges facing the industry today is the move toward data-driven decision making.
“The industry operates using lots of historical knowledge; now, with the advancement of many information technology (IT) systems, decisions can be based on data,” he said. “Data-driven decision making is a significant opportunity, but first we need to upgrade our overall IT systems to integrate the supply chain so that we have the latest data from the grower level all the way to manufacturers.
“By looking across the entire supply chain, we have the opportunity to reduce costs, increase quality and improve the decision-making process,” he said.
Investing In Rural Economies
Premium Peanut received $20 million in critical New Markets Tax Credit financing from CEI Capital Management LLC to help build its operation. The business qualified for the program, which was designed by Congress to stimulate private investment and economic growth in low-income communities that lack access to capital needed to grow businesses, create jobs and sustain healthy local economies.
“This part of Georgia has what we often find in rural economies. Activity and growth are heavily dependent on natural resource industries,” said CEI Capital Management CEO Charlie Spies. “By supporting a cooperative farming model the New Markets Tax Credit program is doing its job, diversifying a shallow economy to lay the groundwork for a sustainable future.”
SunTrust Bank provided an additional $3 million in New Markets Tax Credit allocation as well as project equity.