Peanut Butter Cost Forces Food Banks to Switch to Cheese

A shrinking peanut supply has driven up the price of peanut butter, hurting not only the average grocery shopper, but also the nation’s soup kitchens and food banks.

But industry officials said Tuesday that relief could be in sight as early as this month, when the 1991 peanut harvest--expected to be a bumper crop--begins. Prices of peanut butter, that protein-rich staple of food distribution programs, have already begun to drop slightly.

Last December, the federal government stopped buying peanut butter for distribution to millions of needy people nationwide, causing a hardship among social service agencies. The Agriculture Department’s Food and Nutrition Service cited drought-driven high prices as its reason for suspending purchases of peanut butter and began distributing cheese instead.

However, officials of groups that feed the needy nationwide say that cheese is a poor substitute because it is less nutritious, more difficult to store and requires refrigeration. Moreover, say the officials, the supply of government cheese was much smaller than the peanut butter it replaced.

“It was a drop in the bucket, compared to the amount of peanut butter we were getting,” said Doris Bloch, executive director of the Los Angeles Regional Food Bank, which supplies more than 600 agencies that feed more than 250,000 people a week.

In Atlanta, Kathy Palumbo, community services director for the Atlanta Community Food Bank, said her organization last year received five truckloads of peanut butter. But the group, which serves 560 agencies feeding 300,000 people a month in northern Georgia, has only received a half-truckload of cheese since the peanut butter supply was cut off, she said.

Some social services managers resorted to novel efforts to keep peanut butter in stock.

For example, in Washington, Charles Parker, executive director of Bread for the City, sent out a “donor acquisition mailing” to 70,000 people in March “to let folks know that (the price of peanut butter) was going up, and we needed to raise extra money to compensate for that. We had a fairly good response to it.”

But most others have learned to do without.

“If anything is high priced, we can’t afford it,” said Dianne Cross, a volunteer director at the Living Springs Christian Fellowship food program in Garden Grove. Cross said she used to buy peanut butter for the thrice-weekly program but stopped because of the cost.

The price of peanut butter has jumped to about $7 per 12 jars from about $3, she said. Cross now buys refried beans as a substitute.

Agriculture Department officials said that when the government stopped buying peanut butter in December, 1990, its price had skyrocketed to about $1.70 a pound from less than $1 a pound the year before.

The culprit was a severe drought in peanut-producing states such as Georgia. The drought caused peanut butter production to drop from 800 million pounds nationally in 1989 to 664 million pounds in 1990.

This year, however, favorable weather has forecasters predicting a bumper crop of peanuts. Mitch Head, executive director of the Peanut Advisory Board, an industry promotion group, said retail prices have already fallen 3% in the past three months.

Prices could be further reduced because President Bush recently allowed more peanuts to be imported into this country. Quotas that have historically kept prices high were raised dramatically, from 1.7 million pounds to 100 million pounds, through the end of last month. But USDA officials estimate that only 22 million pounds actually came in.

At the Agriculture Department, Darlene Barnes, spokeswoman for the Food and Nutrition Service, said the agency is “looking at” the possibility of resuming purchases of peanut butter, but she could not provide further details.

The Food and Nutrition Service, with an annual budget of $27.5 million, supplies food for 13 federal programs including the school lunch program that feeds 24 million children daily. The Women and Infants and Children program feeds 4.5 million annually, and the Nutrition Program for the Elderly serves 930,000 meals daily.

Some advocates for the needy are skeptical that the government will resume delivering peanut butter soon.

“We have been led to believe we will not be seeing it for some time,” said Bloch of Los Angeles, who complained that, “Our services benefit the people on the bottom of the economic list, but we’re on the bottom of the federal government’s list.”

Times staff researcher Edith Stanley in Atlanta and Times staff writer Eric Young in Orange County contributed to this story.