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Nation’s Biggest Organic Peanut Processor Shuts Down

The largest organic peanut butter processor in the United States has filed for Chapter 7 bankruptcy, ending its existence.

Sunland Inc., the Portales, NM company linked to the September 2012 Salmonella outbreak that sickened 41 people in 20 states, said it was unable to recover from recalls of more than 100 organic peanut and nut butter products it made.

Sunland was forced to shutdown during the outbreak, but resumed operations in last March.

Chapter 7 bankruptcy means liquidation of the company, which says its liabilities are running close to $100 million to between 1,000 to 5,000 creditors, according to the bankruptcy filing. It’s assets fall far short of that in the $10 to $50 million range.

Jimmy Shearer, president and chief executive of Sunland, has not been available for comment on the company’s demise.

Employees learned Wednesday the organic business was closing down.

In a statement on her Facebook page, Portales Mayor Sharon King said Sundland was “an outstanding employer to our community for decades.” She said the city was going to suffer from the loss of tax receipts generated by the peanut processing company. The mayor asked for prayers for the Sunland families.

The company employed about 100 people in the small New Mexico city. The area’s economic development authority was anticipating the peanut company would be hiring 40 additional workers this year.

Valencia peanut growers in West Texas and Eastern New Mexico say Sunland’s demise means an immediate economic depression for them as they have no where to go to sell their current peanut crop.   Some might quality for crop insurance payments, but they cannot sort that out until the federal government re-opens for business.   Growers says Sunland was a well-run business that could not recover from being forced to close by the U.S. Food and Drug Administration (FDA).

© Food Safety News
  • KennethKendrick

    If they were so “well – run” they would not have had open containers that collect bird feces, positive salmonella test, that they initially denied ever having, caused children to go up the hospital, and years of fda violations until they finally hurt people. Feel sorry for the employees though, things hard enough in this area as It is and i’am sure they worked hard to rebuild the co. only to wind up jobless.

  • Cat

    Very sad! This will devastate the city of Portales and has very far reaching implications on a broader scale. It is sad that the FDA shut them down originally, they made an example out of this small business. However, where is the FDA in providing and supporting small and medium businesses when it comes to helping them with standards and implementing them?

  • Carol Wos

    This is our US government hurting the business community rather than helping our citizens. Sad day in America.

  • KennethKendrick

    Cat and Carol. I hate to see any business close, and I think Portales is a great town. I hope they recover, and the Farmers find another facility (or a honest investor reopens the facility.) I know the employees there worked their buts off. Sunland Mgt failed to use even the most basic common sense practices, leaving tons of product uncovered outdoors to bird and rodent feces and no telling what else defies common sense. The FDA had been finding problems for years, and thank God the strain of salmonella just happened not to be as deadly as many of the strains are. The FDA had no choice when kids starting getting sick. Salmonella test can be ran for $50.00. Sunland came out and said they had never tested positive and there were results in writing that they did. Being dishonest did not help the mgt. Once a + test came back, they should have stopped and cleaned, but I do not want my family and people across the country ill, and the mgt left the FDA with no choice. Even if Salmonella does not kill you right away it leads to kidney failure and auto immune disorders for many. My prayers are with those who lost their jobs, I hope someone steps in to fill the void quickly and those made ill do not have life long consequences.

    • Uni San

      “Once a + test came back, they should have stopped and cleaned”

      I am in complete agreement with everything you said, spot on. You have seen this before I suspect.

      There is an important truth and it goes to food quality or any other type of quality system: You cannot TEST quality into a product. That is to say that testing just indicates the presence of a signal. Testing is also not the most expensive aspect of food quality, the response (or prevention) is the expensive part, and only to those who do not accept the more efficient and effective methods available to food producers. The owners are guilty of not having an antenna up for what the rest of their industry is doing, for the solutions are available and far less expensive than repairing a reputation and fighting litigation.

      Getting the upper hand on PRODUCTIVITY issues related to the cost per square foot in labor and materials for sanitizing is the key that food quality professionals are focused on today. Adequate sanitizers have been around for a long time but application labor is where the cost is hidden. Yes, the workers worked very hard but with the wrong tools, the result will always be inadequate. With the right tools, everything falls into place.

      I hate reading these stories, just a little expertise could have saved Sunland and all those jobs. Now it’s just lawyers and sorrow.

  • J T

    No doubt the owners/executives were taking home over 6 figures, all the while acting like they couldn’t invest in proper sanitary/preventative procedures in their facilities.

  • Maria

    ** Some might qualify for crop insurance payments,