Peanut consumption gaining ground

At about this time last year, producers and others in the peanut industry were sweating the fallout of a peanut butter recall prompted by a foodborne illness outbreak linked to salmonella.

But a recent report from the USDA-ERS — “Peanut Outlook: Impacts of the 2008-09 Foodborne Illness Outbreak Linked to Salmonella in Peanuts,” finds the outbreak and subsequent recall will not have a lasting impact on peanut demand and production.

The 2008-09 foodborne illness outbreak linked to processed peanuts caused one of the largest food recalls in U.S. history. From the time the outbreaks were detected in November 2008 to April 2009, 714 cases of illness were linked to salmonella and may have contributed to nine deaths.

For background on the outbreak please visit

The U.S. Food and Drug Administration (FDA) eventually identified two peanut-processing plants owned by the Peanut Corporation of America (PCA) as the source of contamination, one in Georgia and one in Texas. Both plants were primarily “intermediary” processors that sold ingredients to other companies. Most recalled products, such as cakes, candy, cookies, peanut crackers and ice cream, contained peanut paste or peanut butter. Other products, including pet foods and snack mixes, contained blanched, granulated or roasted peanuts.

Although PCA account for, at most, 2 percent of the U.S. peanut supply, total recalls involved more than 3,900 products from more than 200 companies. PCA filed for Chapter 7 bankruptcy in February 2009.

Some of the largest brands of peanut butter were unaffected by the salmonella contamination, including Jif, Peter Pan, Skippy and Smuckers. But the fallout from the recall severely damaged the entire industry temporarily. As a result, the immediate costs from the 2008-2009 recall were considerable for all producers and manufacturers, regardless of the brand of product.

Although Skippy and Peter Pan peanut products were unaffected by the outbreak, Skippy peanut butter sales fell 54 percent and Peter Pan sales fell 45 percent in the months after the recall. In the immediate aftermath of the nationwide outbreak, peanut butter sales plummeted 24 percent across the board, and experts were estimating that total industry losses would amount to about $1 billion.

Despite the considerable short-term losses, the USDA report found that retail sales returned to previous-year levels just four months later. Peanut sales took the biggest hit in January and February 2009. But during the first four weeks of April, May and June 2009, consumer purchases actually increased from the year before. “Consumer purchases were unusually high in April and May,” states the report.

Many factors can affect demand in a given month, including seasonal consumption patterns, discounts and promotions, and general economic conditions, according to the report. But the data proves that consumers temporarily reduced purchases during the height of the recall. Then, purchases increased substantially when information about recalls was more widely disseminated.

Despite the temporary decline in retail consumer purchases, the volume of peanuts processed during the entire 2008/09 marketing year increased 1.5 percent from the previous year, and may have increased further if not for the recalls. Processing of peanut butter increased 9 percent from the previous year, from 1.35 billion pounds to 1.47 billion pounds, possibly because major brands of peanut butter were not recalled.

The price of peanut butter following food safety recalls of peanut products in 2009 remained the same as before the recalls, says the report. While the recall was large, it did not dramatically restrict supplies of peanut products.

The report concludes that while the costs of the 2009 recalls of peanut-containing products were considerable for consumers and producers, the negative effects on the industry were not long-term, lasting only a few months.

Instead, the farthest-reaching effects were increased media attention and discussions related to food safety, leading to some new measures enacted by private industry and regulators. During the 2008-09 food recalls linked to peanuts, several trade groups responded by coordinating the flow of information from the peanut industry to consumers and decision makers. Individual states, such as Georgia, have also produced legislation to increase oversight of food manufacturing and to establish safety guidelines. And, at the federal level, debate in Congress is focused on the frequency of inspections, on-farm safety standards, preventative safeguards, recall authority, and the organization of public food safety agencies.

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TAGS: Peanuts
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