Thursday, December 4, 2014

An early report on burley deliveries


Wet

Wet weather followed by cold snaps caused some quality loss on burley in central Tennessee and other areas served by the Burley Stabilization Corp. George Marks (photo), president of BSC, is shown standing in front of some of the last tobacco he harvested this year, a fire-cured field that he hung on October 20.


Some very good quality burley has come in so far, but overall quality is down from last year, says Daniel Green, chief executive officer at Burley Stabilization Corporation. "The top quality is better than last year, but we are seeing much more variation, even across burley coming from the same growing regions." Wet weather followed by cold snaps near the end of the curing season contributed to quality loss. But it remains to be seen how much of the crop was affected since most of the impact will be on the later tobacco. Green says there is quite a bit of houseburn, occasional "blacktails" and some green tobacco in this crop. On the bright side, the crop seems to be yielding very well for most producers.

A 200-million-pound burley crop seems very unlikely to Steve
Steve PrattPratt,Pratt,
Pratt, general manager of Burley Tobacco Growers Cooperative Association, Lexington, Ky. "We lost too much in the cold." The most recent USDA burley projection was 211.5 million pounds. But weather late in the season delivered a double whammy on growers: Many had to cut and hang their tobacco wet because of the rains during harvest. Then the tobacco was water-laden when the intense cold set in at the beginning of November. It froze, affecting yield and quality. "The quality was a little better than when we began receiving, but it is still decent," says Pratt... Most farmers want to know if BTGCA will take in excess pounds, says Pratt. "We do not have any plans at present to do that," he says. Auction markets have opened for the season in Kentucky, and that is a marketing option. "But I don't believe they will be able to obtain contract prices at auction."

Production in the Deep South: Georgia growers, who fared relatively well with the late-season weather, averaged 2,400 pounds per acre with an average price in the range of $2.06 per pound, says J. Michael Moore, Georgia Extension tobacco specialist. Florida growers averaged perhaps 2,700 pounds per acre with an average price of about $2.07. Georgians planted about 14,000 acres, Floridians planted 1,500.

Mystery black shank: The season in Georgia and Florida will be remembered for an aggressive form of black shank, which was especially intense early in the season and sometimes appeared in fields that appeared to have good rotations. Control recommendations will be developed over the winter.

Dark escapes the cold: None of the dark air- and fire-cured tobacco in Kentucky and Tennessee was still in the field when the frost/freeze occurred at the beginning of November, says Andy Bailey, Extension dark tobacco specialist. "We had some very late crops, but from what I heard, the last went into the barns on October 29." This season will be remembered for very heavy rains late in the season, he says. "There was nine to 10 inches in August in some places." Bailey estimates fire-cured production at 48 to 49 million pounds, four or five percent less than the USDA projection. He pegs dark air-cured at 15 million pounds, the same as USDA's projection. Much of the increase from last year was produced in the Green River area, he says. It didn't get the torrential rain that other areas received.

OUTLOOK REPORTS
FLUE-CURED
A very wet 2013 growing season which curbed yields, coupled with already short global supplies of flavor-style flue-cured tobacco, led to a record high average price per pound of $2.11 for the 2013 U.S. flue-cured market. Wet conditions in part of the Brazil flue-cured area limited attempts to increase production for the 2014 market, with the 2014 crop estimated at 1.344 billion pounds, down from 1.38 billion for 2013. Zimbabwean growers increased production for the 2014 market 29 percent to 474 million pounds, up from 367 million pounds for 2013. Average price per pound for the 2014 Zimbabwe crop was US $1.44, down 14 percent from US $1.67 in 2013. With increased production, prices for the 2014 U.S. crop are down and may average below $2 per pound. The October USDA Crop Report estimated production rose at an estimated 557.4 million pounds for 2014, up from 454.3 million pounds in 2013. If that forecast is correct, the 2014 crop is the biggest since 2001 when U.S. production was 579 million pounds.
(Derived from a report by Blake Brown, N.C. Extension ag economist.)

BURLEY
Domestic burley use is being hampered by acceleration in the decline in U.S. cigarette consumption (down 5.8 percent in 2013 with similar trends so far in 2014) and the availability of cheaper foreign leaf. Accounting for both slumping exports and domestic use, it certainly appears a 2014 U.S. burley crop near or more than 200 million pounds will exceed anticipated use, leading to more critical grading and prices falling from their record high of $2.06 per pound for the 2013 crop. Demand for low quality leaf and non-contract pounds could be challenged in this marketing environment if current forecast production levels prevail. Unless the global supply/demand balance improves, look for burley contract volume reductions in 2015.
(Derived from a report Will Snell, Kentucky Extension ag economist.)

DARK
Unlike burley, dark tobacco growers saw contract pounds remain similar and in some cases increase for 2014. Higher yields are projected to increase the U.S. dark fire-cured crop to slightly above 50 million pounds and a U.S. dark air-cured crop totaling around 15 million pounds - just slightly above last year's levels. Prices for the 2013 crop averaged a record $2.63 (compared to $2.58/lb in 2012) for dark fire- cured, while the 2013 dark air-cured crop averaged $2.35/lb (vs $2.29/lb in 2012). Look for dark tobacco prices to remain relatively strong for quality leaf. Stagnant/declining product sales may cause the industry to reevaluate additional acreage expansion in 2015. Nevertheless, the outlook for the U.S. dark tobacco growing sector remains very favorable given projected sales for smokeless tobacco products in the United States.
(Derived from a report by Snell.)

Editor's note: After I published an item in my second November issue hypothesizing as to why Philip Morris International (PMI) is ending its direct contracting program with farmers and arranging instead with Universal and Alliance One to acquire leaf, I got a call from a spokesman for PMI. He took issue with the fact that I suggested that "the details of complying with the GAP program may have been problematic" for the company. He insisted that PMI maintains its commitment to the GAP process, both financially and through personal involvement. I have no reason to doubt the financial part, and I have learned that the company has maintained its presence on GAP's board, which is the way you would expect a company like PMI to participate. PMI's member of the GAP board is David Conner of Virginia. So I am convinced: PMI is maintaining its commitment to GAP plans to continue to do so. More on the shifting on leaf-buying responsibilities in a future issue.


UPCOMING GAP RECERTIFICATION MEETINGS



NORTH CAROLINA (Flue-cured)  
  • January 13, 10 a.m. Martin County Farmers Market, 4001 West Main St. Williamston, N.C. Contact: 257-789-4370 or al_cochran@ncsu.edu.
If you haven't signed on to receive it regularly or need to change an address, you can call me at 919-789-4631 or email me at chrisbickers@gmail.com. Thanks--Chris Bickers


ADVERTISING

TOBACCO BARN SALE



TMI

Greg Goins is the auctioneer at Big M Warehouse.

BIG M TOBACCO WAREHOUSE
in the old Liberty Warehouse
1723 Goldsboro St. SW, Wilson, N.C.

We will hold both sealed bid auctions
and live auctions. 

We promise 
HONEST AND TRUSTWORTHY 
SERVICE
We will be GAP certified 
For more information, contact Mann Mullen at 919-496-9033 
or the warehouse switchboard at 252-206-1447.




FARMERS TOBACCO WAREHOUSE
 209 Harding St., Danville, Ky.

Full-service burley warehouse

Jerry Rankin, Owner


 Opening Tuesday, November 25 at 9:30 a.m. Call for information.


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Saturday, November 22, 2014

A BIG BURLEY CROP HEADS TO MARKET

Burley curing in a large open-sided barn near Lafayette, Tn.
Too much burley? Jerry Rankin, owner of Farmers Warehouse in Danville, Ky., is worried about the supply/demand situation, "Before the bad weather at the end of the season, we were looking at maybe 28 million pounds of burley with no home. Now, because of the weather, it looks like more like 18 to 20 million pounds, but that is still enough that prices may not be too good." The Farmers Warehouse Tobacco will openTuesday before Thanksgiving at 9:30 a.m., and most others will open that week or soon after.



Good season, bad end: Rankin says Central Kentucky had a very good crop for most of the season until weather problems occurred late. "The season ended really bad. We had two weeks when rain fell nearly every day. It was too much, and the tobacco in field suffered." It was a common sight to see leaves falling from some stalks. "The frost hit while a lot of tobacco was on the stick, wilting," he says. "I saw some farmers pulling out their sticks and leaving the tobacco. Very little that was produced after the first week of October will be a quality that anyone will want."     

Higher yield needed: Larry Thompson of Bagdad, Ky., between Louisville and Lexington, says perhaps 10 percent of the local crop was still in the field when the weather turned cold. He doesn't know whether any of it will be usable. Fortunately for him, he'd gotten all his burley cut by the end of September. Stripping of his 50-acre crop is about a third finished now. His traditional varieties seem to be declining in yield, and he thinks a new high-yielding variety, HB 4488, could play a bigger part on this farm as a result. He wound up with some overage beyond his two contracts. At this point, it looks like he may not average more than $1.30 a pound on it. "That is a big comedown from $2 a pound last year," he says.

Disappointing sales in N.C.: Brent Ward of Elk Park, N.C., grew two acres this year of burley and sold some of it on November 11 at the Old Belt Warehouse in Rural Hall, N.C. The highest sold for $1.30 a pound. Some of it sold for $1.10. Ironically, this was some good tobacco. "Last year, I got a 2,000-pound yield on it. This year the weather was a little better and I should be over that. I am hoping for 4,500 pounds for the two acres." The new KT 212 variety did well for him and he will use it again if he grows tobacco again. "I would like to put out tobacco next year but not if I am going to lose money on it."

New chemical for black shank: Valent is likely to get a label for Presidio on tobacco early in 2015. It reportedly has good efficacy on black shank. It will be important to rotate it with other chemicals to prevent resistance, Extension specialists say. 

Lucky Strike stack still smoking: The Commonwealth Brands cigarette factory in Reidsville, N.C.--famous for its Lucky Strike smokestack--will continue to operate after its parent company, UK-based Imperial Tobacco Group, acquires the Lorillard Tobacco manufacturing, R&D facilities, corporate headquarters buildings and some 2,900 employees in Greensboro, N.C. Commonwealth-Altadis, Inc., which was formed in 2010 by Imperial Tobacco by combining Commonwealth Brands and cigar maker Altadis USA and is headquartered in Fort Lauderdale, Fl., also will become part of Imperial's new American entity, ITG Brands. All of this is dependent on regulatory approval,which is expected this coming spring, but if all goes as planned, Imperial will acquire Reynolds American's Kool, Salem and Winston cigarette brands and Lorillard's blu eCigs and Maverick cigarette brands. (It has been speculated that Reynolds American's Doral cigarette may also wind up in Imperial's hands.) Also part of the deal: Lorillard's tobacco receiving and storage facilities in Danville, Va. Blu eCigs will continue to be based in Charlotte. Commonwealth-Altadis' brands include USA Gold, Montclair and Sonoma cigarettes, and Dutch Masters, Backwoods and Phillies cigars.

UPCOMING GAP RECERTIFICATION MEETINGS



NORTH CAROLINA (Flue-cured)  
  • January 13, 10 a.m. Martin County Farmers Market, 4001 Main Street, Williamston, N.C. Contact: 257-789-4370 or al_cochranncsu.edu.
ADVERTISING




TMI
BIG M TOBACCO WAREHOUSE 
1723 Goldsboro St. SW, Wilson, N.C., 
in the old Liberty Warehouse

Greg Goins is the auctioneer at Big M Warehouse.
We will hold both sealed bid auctions
and live auctions. 
We promise 
HONEST AND TRUSTWORTHY 
SERVICE
We will be GAP certified 
For more information, contact Mann Mullen at 919-496-9033 
or the warehouse switchboard at 252-206-1447.





FARMERS TOBACCO WAREHOUSE
 209 Harding St., Danville, Ky.

Full-service burley warehouse

Jerry Rankin, Owner


 Opening Tuesday, November 25 at 9:30 a.m. Call for information.

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TOBACCO BARN SALE DECEMBER 6

Thursday, November 6, 2014

LITTLE LEAF LEFT IN FIELD AFTER INTENSE WEEKEND COLD

Burley cure
Getting burley cured any way you can: Burley hangs in black plastic-covered outdoor curing structures at the Highland Rim Research Center in Springfield, Tn. Burley was also hanging in the conventional barns in the left background.

BURLEY
  • Kentucky--A freeze over the weekend over much of the burley-producing area essentially brought the growing season to a halt. "There were still a few fields that hadn't been harvested," said Bob Pearce, Kentucky Extension tobacco specialist. "But I don't expect much of that to be harvested now." Curing conditions had been good, and some is being stripped. "There is some good tobacco now, but I expect a big range of quality between the beginning of the season and the end," Pearce said. He hesitates to estimate production but thinks the current USDA estimate of 160.6 million pounds is too high. "This has been a tough crop to get a handle on," he said.
  • Tennessee--The cold weather reached Tennessee a day sooner, but very little tobacco remained in the field there either. In Macon County, the number one burley county in the state, Extension agent Steve Walker said, "We had a major freeze over the weekend. It got to 25 degrees here in Lafayette and was colder  north to theLong Eagle Barns  Kentucky border. It froze all that was still out. Some are trying to harvest what was left, but I think they would get poor quality with some color. It might not cure up at all"... Harvest had been brought to a near halt in north central Tennessee a few weeks earlier by a week of rain. "We had been dry after some showers around Labor Day, but then there was heavy rain from October 8 to October 16," said George Marks of Clarksville. "We had eight inches in six days" ... East Tennessee had its earliest measurable snowfall since 1925, said USDA.
  • Southwest Virginia/West N.C.-- In southwestern Virginia's Carroll County, higher elevations received two to three inches of snow Friday night to Saturday morning, with temperatures well down into in the 20s, said the county agent there...And in Yancey County, N.C., temperatures dropped into the 20's and the first snow of the season fell....Kenneth Reynolds of Abingdon, Va., had finished cutting and hanging his burley before the cold snap. "The wet weather may affect the quality. It is a big crop, but I am afraid it will be thin because of all the rain," he said. What he has stripped so far has appeared average. "All the rain brought the tobacco in case (so he could work it). But we need some dry weather to dry out the leaf."
FLUE-CURED
  • Virginia--For all practical purposes, flue-cured harvest was over as of Monday, said David Reed, Virginia Extension tobacco specialist. "Only a few growers here and there still had tobacco in the field at the end of last week," he said. "It was generally small amounts, maybe a half dozen to a dozen barns per farmer." Because of the scattered frost over the weekend, he doesn't know if much of that will be harvested or not. Barely adequate barn space was the main reason harvest continued so late. "We had just so much curing capacity," Reed says.
  • North Carolina--Most of the flue-cured-producing area in the state got scattered frost Sunday, said Matthew Vann, N.C. Extension tobacco specialist. Some areas got only a light frost, and some areas escaped it completely. There was still a little flue-cured left in the field, especially in the Piedmont. "If you just had a light frost, you might be able to harvest and sell it. But after a freeze, the leaf turns black, and there is no need of harvesting it"...Harvesting was intense the last week of October. "A few tobacco farmers (in our county) used neighbors' barns to get their remaining tobacco in before the predicted frost," said Brian Parrish, Harnett County Extension tobacco agent in a USDA survey.
In other tobacco news:
PMI will let dealers do its buying: Philip Morris International (PMI) announced November 5 that it will cease contracting directly with American farmers beginning with the 2015 crop. Instead, it will purchase American leaf exclusively through Alliance One International (AOI) and Universal Corporation. The two dealers will honor any multiyear farmer contracts still outstanding, PMI said. What happens to PMI receiving stations? I have been told that AOI intends to operate at least two of PMI's existing receiving stations--Kernersville, N.C., and Smithfield, N.C. I contacted a friend who manages one of PMI's burley stations yesterday--he said the news had come as a surprise to him and his co-workers, and they have no idea if they will still be working after the new agreement goes into effect. Why the change? Thee may be some efficiencies to be obtained. My guess is that PMI has been having problems moving grades it doesn't really need. This way, it can let the two dealers handle this tobacco. Maybe PMI doesn't feel it has the expertise to deal with the child labor question, or just doesn't want to. The details of complying with the GAP program may have been problematic for PMI too, it's been suggested. Well, look for more on this development in the next issue.
Flue-cured auctions still going strong: The Big M Warehouse in Wilson, N.C. (phone  919 496 9033), will probably continue sealed bid auctions until November 19 or 20. Piedmont Warehouse in Danville, Va. (phone 434-203-1404), will continue its sealed bid auctions until November 21 or perhaps a bit later. The Carolinas Tobacco Auction in Lake City, S.C., tentatively plans a final sale on November 13 (call 843-687-5753 for details). The Old Belt Tobacco live auction in Rural Hall, N.C. (phone 336 416 6262) will sell flue-cured through most of November, then switch to burley and sell till perhaps mid December. Volume has been good lately, with B grades selling in the $1.75 to $1.80 a pound range. Watch for news on burley auctions in conventional markets in future issues.

If you haven't signed on to receive it regularly or need to change an address, please click on "Join our mailing list" and follow the prompts. For more information, you can call me at919-789-4631 or email me at chrisbickers@gmail.com. Thanks--Chris Bickers

Join Our Mailing List


ADVERTISING


TMI

BIG M TOBACCO WAREHOUSE 
1723 Goldsboro St. SW, Wilson, N.C., 
in the old Liberty Warehouse
Greg Goins is the auctioneer at Big M Warehouse.
We will hold both sealed bid auctions
and live auctions. 
We promise 
HONEST AND TRUSTWORTHY 
SERVICE
We will be GAP certified 
For more information, contact Mann Mullen at 919-496-9033 
or the warehouse switchboard at 252-206-1447.


 

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