By JULIE JARGON and JANE ZHANG
(See Correction & Amplification below.)

Federal food safety inspectors are focusing on a peanut-processing plant in Georgia that makes peanut butter for institutional use as the possible source of a salmonella outbreak that has sickened at least 434 people in 43 states and may have contributed to five deaths.

Peanut Corp. of America, which owns the plant in Blakely, Ga., said it has recalled products made at the plant after June 30. The closely held company, based in Lynchburg, Va., said it is withdrawing 21 lots of its peanut butter, in containers ranging from five to 50 pounds, as a precautionary measure. Neither the company nor government health officials have yet identified a source of the contamination.

A Food and Drug Administration spokesman said inspectors have been collecting samples at the plant and checking records to see where the products were shipped. "At this time," he said, "only one PCA plant is involved -- the Georgia plant." Peanut Corp. of America said it's working closely with the FDA and the Centers for Disease Control and Prevention. The CDC reported Wednesday that there have been clusters of Salmonella infections in schools, long-term care facilities, hospitals and other institutions.

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Food safety experts say peanuts can become contaminated with Salmonella at the farm -- through animal manure that's used to fertilize the soil or from tainted irrigation water.
This is the second high-profile salmonella contamination involving peanut butter. In February 2007, ConAgra Foods Inc., Omaha, Neb., recalled its Peter Pan Peanut Butter and Great Value Peanut Butter brands after more than 625 people in 47 states were sickened. The outbreak was traced to ConAgra's Sylvester, Ga., peanut butter plant where a leaky roof and faulty sprinkler system allowed the growth of low levels of dormant Salmonella that were likely present from raw peanuts or peanut dust. ConAgra promised to upgrade its facility, and the peanut butter returned to store shelves in August 2007.

Salmonella bacteria live in the intestinal tracts of humans and animals and are usually transmitted to humans through food contaminated with feces. Contaminated foods often come from animals -- meat, poultry, milk and eggs -- but any food can be tainted with Salmonella. Last year, for example, a nationwide outbreak was traced to jalapeno and serrano peppers from Mexico. The bacteria generally causes diarrhea, fever, and abdominal cramps lasting up to a week, but it can be particularly dangerous for small children, the elderly and those with compromised immune systems.

Food safety experts say peanuts can become contaminated with Salmonella at the farm -- through animal manure that's used to fertilize the soil or from tainted irrigation water -- or en route to a processing facility, if transportation equipment isn't clean or the people handling it are infected. But once it gets to a peanut butter plant, proper roasting of the peanuts should kill the bacteria.

"If there are problems in the plant, like a leaky roof, there could be recontamination," says Michael Doyle, director of the Center for Food Safety at the University of Georgia. "Peanut butter plants are designed to be dry. If water gets into an environment where peanut butter is made, it's like putting gas on a fire. It flares up in terms of spreading the organism and allowing for growth of the organism."

In 1996, peanut butter that Kraft Foods Inc. sold in Australia became contaminated with Salmonella and health officials there determined it was caused by mouse droppings in a pipe that carried roasted peanuts away from the plant's roasting room.

Peanut Corp. of America recalled the peanut butter Tuesday after the CDC identified it as a likely source of the outbreak. The company sells bulk peanut butter under the King Nut and Parnell's Pride labels which are sold to schools, hospitals and nursing homes, but are not available at grocery stores. A U.S. Department of Agriculture spokesman said USDA didn't buy any of the recalled peanut butter for the National School Lunch Program or other food distribution programs.

On Monday, Minnesota health officials confirmed that salmonella found in a five-pound container of peanut butter genetically matched the bacteria involved in the nationwide outbreak. The peanut butter was made by Peanut Corp. for King Nut Cos., Solon, Ohio, which voluntary recalled its products Saturday.

Peanuts are the 12th most valuable cash crop grown in the U.S., with a farm value of over $1 billion, according to the American Peanut Council. Peanut butter accounts for about half of the U.S. edible use of peanuts. Food retailers rang up more than $1.2 billion in peanut butter sales last year, Nielsen Co. reported.

Peanut production in 2008 was estimated at 5.15 billion pounds, up 40% from 2007, making last year the largest U.S. crop on record, according to a U.S. Department of Agriculture crop report released on Monday. High peanut prices in 2007 and high contract prices again last year led farmers to plant more acres of peanuts.

Now, peanut growers are worried about what impact this salmonella outbreak will have on future business. ConAgra's sales and profits took a hit after its 2007 peanut butter recall. Sales in its consumer foods segment in the fourth quarter ended May 27, 2007, were flat compared with the year-earlier period due partly to the recall, and quarterly operating profit in its consumer foods segment fell 15% partly because of recall-related costs.

"Farmers don't like seeing something like this because it causes confusion. This is not an issue of tracking it back to the farm, because there's no organism that can survive the heat of roasting," said Don Koehler, executive director of the Georgia Peanut Commission, a group representing 5,000 peanut growers in the country's largest peanut producing state.

Kellogg Co. put a hold on sales of its Austin and Keebler-branded Toasted Peanut Butter Sandwich Crackers, Peanut Butter and Jelly Sandwich Crackers, Cheese and Peanut Butter Sandwich Crackers and Peanut Butter-Chocolate Sandwich Crackers as a precautionary measure while the Food and Drug Administration investigates salmonella contamination involving a manufacturer of peanut butter and peanut paste. An article published Wednesday afternoon on WSJ.com incorrectly said that Kellogg had placed a hold on peanut-butter sandwich cookies as well as crackers.

Write to Julie Jargon at julie.jargon@wsj.com and Jane Zhang at Jane.Zhang@wsj.com

Corrections & Amplifications

An earlier version of this article incorrectly said that Kellogg Co. had placed a hold on peanut-butter sandwich cookies as well as crackers.

http://online.wsj.com/article/SB123194586477481479.html