PORTALES, N.M. — Farmers in a revered peanut-growing region along the New Mexico-Texas border should be celebrating one of the best harvests in recent memory.
Instead, millions of pounds of their prized sweet Valencia peanuts sit in barns at a peanut butter plant shuttered for two months amid a salmonella outbreak that sickened 41 people in 20 states.
That has forced Medford's Harry & David and other customers such as Trader Joe's to go elsewhere for their organic peanut butter supplies.
Farmers are worried about getting paid for their peanuts, nearly a third of the plant's 150 workers have been laid off, and residents wonder what toll an increasingly contentious showdown between the nation's largest organic peanut butter plant and federal regulators could have on the region's economy.
Harry & David spokeswoman Rhonda Klug said the company does not disclose supplier information and couldn't confirm when it switched to an alternate supplier.
In the gourmet food and gift company's Nov. 12 fiscal first-quarter release, the company reaccounted its September and October recalls of products containing Sunland ingredients.
In its quarterly assessment, Harry & David reported it was continuing to evaluate the extent of recall costs and was not able to estimate the cost as of early November.
"However, the company does not expect the costs associated with the recall to have a material impact on its financial statements," the report said.
The tension in New Mexico boiled over when the Food and Drug Administration on Monday said it was suspending Sunland Inc.'s registration to operate because of repeated safety violations, meaning the plant will remain indefinitely shut down. The company had planned to reopen some its operations this week after voluntarily recalling hundreds of products and closing its processing and peanut butter plants in late September and early October.
For the first time ever, the FDA is using authority granted under a 2011 food safety law signed by President Barack Obama that allows the agency to shut down food operations without a court hearing.
The FDA said inspectors found samples of salmonella in 28 different locations in the plant, in 13 nut butter samples and in one sample of raw peanuts. Inspectors found improper handling of the products, unclean equipment and uncovered trailers of peanuts outside the facility that were exposed to rain and birds. Inspectors also said employees did not have access to hand-washing sinks, and dirty hands had direct contact with ready-to-package peanuts.
The salmonella outbreak was traced to Trader Joe's peanut butter produced at the plant. Sunland produces products for a number of national grocery and retail chains, and New Mexico Peanut Growers Association President Wayne Baker says the industry generates about $60 million in the region each year.
Valencias are a variety of peanuts that come almost exclusively from eastern New Mexico. Because of their sweet flavor, they are favored for organic and natural peanut butter products because they require few additives.