Hog producer leaves area farmers in limbo
By Dennis Hill
Published in News on November 10, 2009 1:46 PM
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News-Argus/BOBBY WILLIAMS
Corn pours into a truck at the Coharie Farms grain elevator near LaGrange this morning. Officials with the company were to appear in federal court in Raleigh today to discuss its declaration of bankruptcy, which has left a number of farmers in the Wayne County area without payment for their crops. Company officials have said they plan to liquidate, which would put about 170 people out of work.
Corn and soybean growers in Wayne and surrounding counties are hurting because one of the state's largest pork-producing companies has filed bankruptcy and is refusing, at least for the present, to pay them for the grain they have already delivered.
Coharie Farms, based in Clinton, owes more than $3 million to growers in Wayne, Lenoir, Duplin, Sampson and seven other eastern North Carolina counties.
Some face financial ruin if they are unable to collect.
Officials with Coharie were to appear in federal court in Raleigh today to go over the terms of the bankruptcy. According to published reports, the company plans to liquidate. That has struck fear in the hearts of farmers who have already delivered their grain, mostly corn, to Coharie feed mills.
Among the company's feed mills are one on the outskirts of LaGrange and another near Bentonville. The company's principal owner, Anne Faircloth, is the daughter of former U.S. Sen. Lauch Faircloth.
According to published reports, Coharie, which sells its meat to the Virginia-based pork giant Smithfield, is ranked as the 22nd largest pork producer in the country.
William "Sonny" Wade and his wife, Paulette, of LaGrange, have been farming for more than 40 years. They said Coharie owes them thousands of dollars. Wade said he believes he can withstand the loss but that some of his neighbors might not and face the prospect of losing their farms.
Wade, who farms about 500 acres of corn, soybeans and wheat, said he has been selling grain to Coharie for about 15 years.
"They've got enough grain to pay everybody but they just won't do it," said Mrs. Wade, who added that the company is continuing to ship truckloads of corn out of its LaGrange location. The company filed for bankruptcy on Friday.
"I can't figure out how this isn't crooked business," Mrs. Wade said. Wade said he knows of some farmers who are owed more than $200,000.
"It's definitely going to hurt us," Wade said. "But some probably will have to sell out."
Mrs. Wade said she first got wind of the trouble when she went by the LaGrange mill to pick up their check. She was told she would have to wait a few days. When she went back, she said, she was put off again. Later, she was told that the company could not say when the payment would be forthcoming.
The Wades said they have hired a lawyer, along with several of their neighbors who are owed money by the company.
Kevin Johnson, a Wayne County agricultural extension agent, said he could not estimate how many farmers in Wayne County are involved in the dispute or how much money is at stake. But Johnson said he spoke with one farmer near Bentonville who is not involved, but who has neighbors that are more than $100,000 in the hole.
Greg Herring, another LaGrange area farmer who has been in business for about 25 years, said he has been somewhat luckier than some of his neighboring farmers. He received payment for his corn, but has not been paid for the soybeans he has delivered.
Most corn is harvested earlier than soybeans. Many soybean fields in the region have yet to be harvested, but most corn has already been gleaned.
Ms. Faircloth has publicly said she is trying to find a way to pay off the company's debts to the farmers whose grain it purchased.
She told reporters last week that the company is contending with two years of shrinking profits but that she wants to work with the farmers and has asked them to be patient.
"Like everyone else in the pork industry, Coharie has been faced with unprecedented losses," she said. "We value our relationships with these farms, and we're working on a plan."
She didn't offer any further details.
Mrs. Wade said it is difficult to watch the truckloads of corn leave the buying station, carrying local farmers' corn, while they have not been paid.
Herring, who farms about 2,000 acres, took a slightly more conciliatory tone. He said he understands that the company has to continue to move the grain to feed its hogs and that unless the process continues, Coharie will not be able to work its way out of the mess.
Herring said most area farmers had a "decent" corn crop this year, after a poor year last year due to dry weather.
"They've got to keep hauling to be able to pay," he said Monday. "What they're telling us is that they've got to liquidate their assets. They're telling us they've got to do this to be able to pay us. But it sure don't look right to ride by and see those trucks rolling.
"You've got to trust in God and hope they'll do the right thing. They say they're going to pay 100 percent. All we can do is be patient. It's a wait and see situation."