Cost of Aflatoxin to the Farmer, Buying Point, and Sheller Segments of the Southeast United States Peanut Industry

Abstract

Abstract Aflatoxin in peanut imposes considerable economic cost to the southeast U.S. peanut industry. A federal marketing agreement administered by the Peanut Administrative Committee ensures the consumer that only edible quality peanuts are allowed entry into edible markets. The 1993-1996 crop years were analyzed to estimate the net cost due to aflatoxin to the farmer, buying point, and sheller segments of the southeast peanut industry. Farmer stock peanuts are examined for visible Aspergillus flavus, the mold primarily responsible for aflatoxin contamination in peanut. Detected lots with aflatoxin (Segregation III) are removed from edible channels because the lot is presumed to be at high risk for aflatoxin contamination and the value of farmer stock peanuts is reduced. The farmer segment net cost due to Segregation III lots averaged $2,595,937 per year. Segregation III lots are generally placed under loan in the Commodity Credit Corporation (CCC). Buying points are paid to handle peanuts for CCC, but at a lower rate per ton than commercial commissions; thus, a loss is incurred to the buying point segment. Buying point losses from handling Segregation III lots average $532,585 annually. The southeast peanut sheller segment incurred the highest cost associated with aflatoxin. The majority of the cost was due to the purchase of Segregation I farmer stock that required further processing due to the aflatoxin contamination found via chemical testing. The average net annual cost to the southeast sheller segment over the 4-yr period was $22,697,737. Segregation III lots and aflatoxin cost the farmer, buying point, and sheller segments of the southeast U.S. peanut industry $25,825,259 annually. On a total Segregation I farmer stock basis, aflatoxin cost the southeast peanut industry an average of $25.53/Mg and an average $69.34/ha.