Monday, June 4, 2018

END IN SIGHT FOR TRANSPLANTING

A no-till planter in action in south Central Kentucky. See story on conservation tillage below.
In Kentucky, burley growers are well on the way on transplanting, says Bob Pearce, Kentucky Extension tobacco specialist. "But we are slightly behind our normal schedule." The oldest fields are three to four weeks old. Some burley land is saturated but in other places it is pretty dry.

Conservation tillage continues to grow in popularity in Kentucky. "It may beapproaching 25 percent of the crop," says Pearce. There are several good advantages to conservation tillage. "But you have to remember that it requires a little higher level of management of the tobacco plus you have to manage the cover crop as well." The major benefit is improved conservation plus fewer trips across the field, he says. A special transplanter is needed, like the C&M Trium transplanter with a no-till option shown above.
 
In North Carolina, it has been rainy, especially in parts of the Old and Middle Belt. "Our research station at Oxford has had 10 inches of rain in the last few weeks," says Matthew Vann, N.C. Extension tobacco specialist. "About 90 percent of the flue-cured crop has been transplanted." The last 10 percent will be a challenge.
 
In Virginia, there was extensive flooding in the Southside, says Lunenburg County Extension agent Lindy Tucker. "Tobacco and grass are growing." In the Southeast, Brunswick County Extension agent Cynthia Gregg said, "Flooding was an issue early in the county. Fields were flooded along with approximately 28 roads beingimpassable. Several tobacco fields had some washes." Burley plantings for the state were estimated 58 complete, flue-cured 74 percent complete and fire-cured 63 percent complete.
 
The Georgia-Florida crop has been transplanted for about a month, says J. Michael Moore, Georgia Extension tobacco specialist, "Sucker control is beginning." Tomato spotted wilt has appeared. "But it looks like we are heading for an average year."...Moore believes that acreage in the two states is about like last year: 12,500 acres for Georgia, 1,250 acres for Florida.

ANOTHER APPOINTMENT IN TOBACCO
Jennifer Atkins has been named Marketing Specialist covering the Southside of Virginia for the Virginia Department of Agriculture. Her work subjects will include flue-cured and dark tobacco in the Southside, and also some work with burley growers in Southwest Virginia. A native of Danville, Va., and a graduate of Averett
Jennifer Atkins
University and Green Mountain College, Atkins has most recently served as Agriculture Director for Tyton BioSciences in Danville. Atkins takes over the former post of Bill Scruggs, who is now Manager of VDACS Domestic Sales and Market Development in Richmond. He says he will still be involved with tobacco, but Jennifer will be the department's point person on leaf.

MORE GAP MEETINGS ON THE WAY
You are not yet done with GAP Connection meetings, but the remaining ones are strictly voluntary. From mid June to early August, GAP Connections will hold a series of 15 meetings to present information on safety and compliance. "This is a one-stop training offered to growers and workers," said Amy Rochkes, Training & Resource Coordinator with GAP Connections. "Workers can learn a great deal about safety and compliance in their native language (English and Spanish) directly from the professionals." There is no charge, but pre-registration is recommended. Visit www.gapconnections.com or call GAP Connections at (865) 622-4606. A tentative schedule follows:
  • Monday, June 18, Grower's Warehouse, Tifton, GA, 9 a.m.--12:30 p.m.
  • Wednesday, June 20, Safe Marketing, Mullins, SC, 9 a.m.--12:30 p.m.
  • Friday, June 22, Warren Farms, Newton Grove, NC, 9 a.m.--12:30 p.m. & 2 p.m.--5:30 p.m.
  • Monday, June 25, RC Commodities, Inc., Wilson, NC, 9 a.m.--12:30 p.m. & 2 p.m.--5:30 p.m.
  • Wednesday, June 27, Roberts Farm, Lawrenceville, VA, 9 a.m.--12:30 p.m. & 2 p.m.--5:30 p.m.
  • Friday, June 29, Richmond Farms, Leasburg, NC, 9 a.m.-12:30 p.m. & 2 p.m.---5:30 p.m.
  • Monday, August 6, Murdock Farms, Murray, KY, 9 a.m.-12:30 p.m. & 2 p.m.--5:30 p.m.
  • Wednesday, August 8, Harton Farms, Cadiz KY, 9 a.m.-12:30 p.m. & 2 p.m.--5:30 p.m.

DATES TO REMEMBER: 

  • June 11-13, Live Oak, Fla. Georgia-Florida Tobacco Tour, beginning with a 7 p.m. Kick-Off Supper at Brown Lantern Restaurant,  June 11.


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Wednesday, May 23, 2018

BURLEY GROWERS PICK UP THE PIECES


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Young burley grows on a sunny day in a field near Cynthiana, Ky.

BURLEY GROWERS PICK UP THE PIECES

The threat of new Chinese tobacco tariffs may be gone--for now. A special envoy of China's President Xi Jinping said over the weekend that talks with U.S, officials ended with a pledge by both sides not to engage in a trade war, according to a Chinese news agency. The agency said China agreed to "meaningful increases in U.S. agriculture and energy exports," But tobacco was not specifically mentioned. Hopefully, that means no increases in tariffs on flue-cured exports, which is the type mainly imported by China.

But burley growers have had no relief from Alliance One International's (AOI's) decision to cease purchases of American burley. Eric Walker, Tennessee Extension specialist, says the big burley-producing counties of middle Tennessee -- Macon,Trousdale and Smith -- will clearly take a major hit. For the state as whole, he thinks we might possibly see an 80 percent crop, and it could certainly be smaller. The effect on burley plantings is still unclear, but no one doubts that Tennessee will be the state most affected.   

It has been a wet season in Tennessee up till now, he says, though it dried in some parts the past week. Walker advises growers not to start (or resume) transplanting too soon, especially if you are planting strip-till or no-till. "It is especially easy to set no-till too soon. Give the ground an extra day or two to make sure it is ready."
There doesn't seem to be a groundswell of Tennesseans planning to plant tobacco without a contract. And there is no news of any auction warehouses springing up that might sell "wildcat" tobacco. There haven't been any auctions in Tennessee in a number of years.
Macon County has been the number one burley county in Tennessee since soon after the buyout. It probably still will be this year, but it is facing a big cut in contracts. "We had 5,000 acres last year," says Extension agent Keith Allen, who is stationed in the county seat of Lafayette. "I am going to guess we will have 3,000 to 4000 acres this year, maybe closer to 4,000 than three. But that may be too optimistic. It is very hard to put a handle on it."

Efforts are going on to get a new company to contract from Holder's Tobacco Warehouse in nearby Hartsville, Tn, which had served as AOI's burley receiving station in Tennessee. But so far, no candidate has emerged, says Allen.

Setting has started in Macon County but is not far along. It was slowed by spotty rains that were heavy in some spots Thursday and Friday, Allen says.

In Kentucky, farmers have had a slow start on transplanting. A challenging transplant production season was part of the reason, says Bob Pearce, Kentucky Extension tobacco specialist. "We had more issues in the greenhouse than normal, primarily pythium and rhizoctonia damping off."

By the end of the season, there should be enough plants to supply the full Kentucky crop, but some growers may not get plants at the time they prefer, Pearce adds. Few plants are ready now, but some setting has taken place in Kentucky, though at a very slow pace.

News from the Carolinas and Virginia from the USDA's Crop Progress and Conditions report for May 13:
--In South Carolina, transplanting was 94 percent complete by May 13. "With warmer-than-normal temperatures and dry conditions, tobacco is beginning to grow off well," says Extension agent Kyle Daniel in Georgetown County. But inadequate topsoil moisture has been a concern
--In North Carolina, about 74 percent of the flue-cured crop had been transplanted by May 13. "Dry conditions are negatively affecting all crops, especially recently transplanted tobacco," says Don Nicholson, N.C. Department of Agriculture agronomist in the Coastal Plain. In Craven County in the east, warmer temperatures and lack of rainfall afforded opportunity for field work last week, says Mike Carroll. "Planting of corn and transplanting of tobacco are almost complete. In Granville County near Raleigh, "Transplanting continued with no problems reported so far other than being behind due to weather conditions earlier," says Paul Westfall, Granville County Extension.
--In Virginia, 37 percent of the flue-cured crop had been transplanted by May 13, compared to 18 percent of the burley crop and 20 percent of the small fire-cured crop. Extension agent Cynthia Gregg of Brunswick County in southeast Virginia says planting is going full swing and that tobacco there (mostly flue-cured) that has already been planted is coming along nicely.

DATES TO REMEMBER: 
  • June 11-13, Live Oak, Fla. Georgia-Florida Tobacco Tour, beginning with a 7 p.m. Kick-Off Supper at Brown Lantern Restaurant,  June 11.

PLEASE NOTE: I have a new email address both for the newsletter and for me. It is cebickers@aol.com. The old address (chrisbickers@gmail.com) is no longer functional. The telephone number remains the same--919 789 4631.--Chris Bickers

Wednesday, May 2, 2018

COLD NIGHTS SLOW SETTING


 Transplanting gets under way across the tobacco belt.
Flue-cured growers in North Carolina have transplanted in the ballpark of 15 to 20 percent of the crop, says Matthew Vann, N.C. Extension tobacco specialist. "That is probably all in the East and southeastern part of the state. Little has been planted in the Middle and Old Belts. It has been too cold and way too wet."

Part of the problem has been night-time temperatures that have often been close to freezing, says Vann. "We need night-time temperatures of 60+ degrees, and we have not been close to that. But there has been no flooding. We are still good on time: Even if we didn't get most of the crop out till late April it would not be a concern." He estimated that statewide, the crop is a week or two behind.


East of Wilson, N.C., the crop may be later than that, says a leaf dealer. "To my eyes, we are a good three weeks late," he told TFN. "I have seen some tobacco get frosted twice. It wasn't killed, but it was held back." A lot is going into the ground now. "We should see 425 to 450 million pounds total of American flue-cured."

This was the best transplant season in Georgia in recent memory, says J. Michael Moore, Georgia Extension tobacco specialist, and the crop looks good in Georgia and Florida. But in South Carolina, heavy wind and rains considerably slowed completion of tobacco setting, says Rusty Skipper, Extension agent in Horry County.

A few plants infected with tomato spotted wilt virus have turned up in Georgia, primarily in fields that were planted very early or in fields where Admire and Actigard were not used, Moore says. "There seems to be a lower presence of thrips this year."

Neonicotinoids are taking a lot of heat over alleged environmental problems, with a ban on outdoor spraying likely soon in the EU. If that sentiment spreads here, Admire could certainly be threatened. That would be a problem, Moore says, because none of the other alternatives are as effective in the suppression of tomato spotted wilt virus.

What effect will the exit of AOI have on the burley market? Daniel Green, c.e.o. of the Burley Stabilization cooperative, thinks acreage in Tennessee, the most affected state will at most be 10,000 acres and maybe less. For all burley states, he estimates 65,000 acres. Little  burley has been transplanted so far.

Dark down: An early production estimate of the 2018 fire-cured crop provided by Hail & Cotton leaf dealer indicated that about 50 million pounds will be the volume,1.5 million pounds less than a year ago. The acreage for this type is projected at 15,625, 1,000 acres less than last year. The same estimate for dark air-cured tobacco is 14 million pounds, about 1.2 million pounds less than in 2017. Acreage is projected down 14 percent--714 acres to 5,000.

The effect Chinese tariffs might have on American tobacco is very difficult to estimate, but whatever the effect, it won't be good, the dealer says. "Even if the tariffs are slow developing, they could cause us some losses just because of the uncertainty," he says. "The situation seems certain to benefit Brazil."

Speaking of Brazil...The current flue-cured crop, just harvested and now being marketed, appears to be heading to 1.28 million pounds, about 77 million pounds less that in 2017, according to the leaf dealer Hail & Cotton. Brazil also grows burley, and the current crop is estimated at 154 million pounds, down 24 million pounds from 2017.

DATES TO REMEMBER: 

  • The Georgia-Florida Tobacco Tour will take place June 11-13, beginning with a 7 p.m. Kick-Off Supper at Brown Lantern Restaurant, Live Oak, Florida, June 11.

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Monday, April 16, 2018

What will happen to our Chinese market?



Spreading the word: Steve Troxler (shown here addressing the crowd at the N.C. State Fair a few years ago) and his staff at the N.C. Department of Agriculture worked tirelessly to make China tobacco a presence in N.C. What is he going to do now with leaf sales to China are in jeopardy? See his opinion piece below.

SIX STRONG OPINIONS ON CHINESE TARIFFS


Editor's note: I have received many good opinion pieces on the Chinese proposal to substantially increase tariffs on U.S. tobacco and tobacco products. And a few more on AOI's departure from the U.S. burley market. I have picked six that appear to me to "cover the waterfront." But if you have something to say, feel free to email it to me at the address above. 500 words or less if you can.--Chris Bickers

Market disruption may not last long. 
Commissioner of Agriculture

We worked very, very hard to get China tobacco buyers to come to North Carolina. Now they have become our No. 1 export destination. And quite frankly, that hard work paid off. It stabilized the declining contracts that farmers were getting. The number one agricultural export now from North Carolina to China is tobacco, at $156.3 million. We value the trading relationships we have worked to build over the years, and we want to continue to strengthen these and other trade partnerships. I want to be part of the solution, and I am hopeful that none of this comes to fruition. USDA Ag Secretary Sonny Perdue noted that farmers are patriots--and that is true--but [patriots] still have to pay the bills...The uncertainty is what's driving them [tobacco farmers] nuts. This could not have happened at a worse time for North Carolina farmers, who are still dealing with the aftermath of Hurricane Mathew and low commodity prices. We also have NAFTA negotiations ongoing and a Farm Bill in the works. We know there will likely be disruption for markets, but we hope it will be short-termed. We are going to have to wait it out. Nobody wins when you put a tariff on food.
--Steve Troxler, Commissioner, N.C. Department of Agriculture

Pointing fingers doesn't  help. 
Grower association leader

Agriculture is being dragged into this situation by the Chinese as a means of retaliation to try and assert political pressure. Since farmers and their leadership organizations do not have a direct seat at the table, we are somewhat disadvantaged. We have been relegated to a position in which we can only provide constant and accurate communications to our government leaders about the economic risks. In that process it is important that we maintain proper civility and professionalism in advocating for farmers' interests. Pointing fingers or calling either side bad names does not help advance our goals of emerging from this circumstance with market stability and perhaps even market growth. What matters most is that China represents an important customer and potential growth market for U.S. leaf. We need to be diligent in continuing to build that relationship based on trust and delivery of the worlds best premium tobacco. Our mission is to convince China that it needs our tobacco and to do everything we can to protect this highly valued relationship for the future.
--Graham Boyd, C.E.O., Tobacco Growers Association of N.C.

Is too much being made of this now? 
A flue-cured grower

I am not turning a deaf ear to the possibility that American farmers may suffer because of tariffs that might be imposed on our leaf and manufactured products by the Chinese. But it seems to me that it will be a long way down the road before anything happens, because much negotiations will have to take place first. Too much is being made of this now, and I think it is in part because of opposition to President Trump. Where was this media when the last administration tried to exclude tobacco in the TPP? That would have had as much or more negative impact than the current tariff negotiations. In fact, the previous administration did more than try to exclude. It actually lead the successful effort to carve tobacco out of the TPP agreement.
--Clay Strickland, Tobacco Grower, Salemburg, N.C.

China has far more to lose from a trade war.
A tobacco economist

It is difficult to say how much the tariff increases will impact flue-cured exports to China. At this point they are prospective: They haven't been implemented yet pending the results of high level negotiations underway. Those negotiations need to address some serious trade and investment issues with China that have not been dealt with by prior administrations. Specific industries like flue-cured tobacco may be impacted if the negotiations are unsuccessful. But I believe that China has far more to lose from a trade war than the U.S., particularly if other countries like the Europeans also join in pressuring China on trade.
--Jim Starkey, retired USDA economist

Incentivize companies to use domestic leaf. 
A burley grower

With the current situation and outlook for American leaf, particularly burley, we need to push for great incentives to domestically produced tobacco products using domestic leaf only.  We need a great tax incentive on the domestic tobacco used in the American supply chain, and a higher tariff on imports of leaf and foreign products.  We need to take back our own markets, and the only way we can is if we incentivize the tobacco companies to use domestic leaf to the point it is more competitive against foreign producers.  The quota system on tobacco tariffs needs to be renegotiated as it is highly outdated at this point. Tobacco farmers will have to band together in this and bombard our politicians with mail until we see the changes needed to protect our industry.  We must let all politicians know of the economic impacts if we quit growing tobacco, and how it would also affect the supply and demand balance of other crops as tobacco farmers continue to exit and enter other ventures.  At least this is my opinion.
--R. Wurth, burley grower, Lansing, N.C

China tariffs proposed, not enacted. 
An equipment manufacturer

It is important to point out that, though PRC has "proposed" the tariffs you mention, they are yet to be "enacted." The difference between proposed vs. enacted is an important distinction, as is President Trump's proposal to double down with an additional 100 B of tariffs on Chinese goods. The odds are both sides are blustering

ahead of what may likely be protracted negotiations. It is important to remember that Trump has a long history of making inflammatory statements before actually backing down, or even reversing course, following face-to-face discussions with his avowed "adversaries." The prudent thing for FCV farmers to do appears to be to wait and see, while holding their course. I also have some comments regarding Tom Blair's letter. Tom appears correct in his assessment that demand for FCV remains strong, as well as the fact that companies and leaf merchants will seek to buy tobacco at the best price on the global market. He is also correct in saying it's all about the bottom line. This comes as no surprise. All business people seek the best price, including farmers and agricultural equipment manufacturers. The trick is to balance price versus value. Tobacco company executives routinely tell me their shareholders expect them to buy lesser grades at the best price on the global market. In addition, they say that the United States offers the only reliable supply of the high grades of FCV they must have to make their blends. At LONG, we face the same issue of balancing price and value. When we seek steel products, we solicit quotes from numerous suppliers. We then go with the ones that offer the lowest price. With steel, we are comparing apples to apples. However, when it comes to other barn components (like motors, fans, and burners) we seek single source quotes from only the manufacturers that offer the highest quality of those type components, regardless of price. This way, we can maintain our firm's well-earned reputation for building the highest quality barns. Some farmers go with cheaper barns, some stick with ours. It's like everything in life, one gets what one pays for.

--Robert H. Pope, Sr., Long Equipment Mfg. Co.
In other tobacco news...


RECENT APPOINTMENTS IN TOBACCO
There are several new faces in state and Extension tobacco work thanks to recent appointments. Among them:...Jewel Bronaugh has been appointed Virginia  Commissioner of Agriculture by Governor Ralph Northam. Bronaugh comes to the
Bronaugh
Hansen
post from Virginia State University (VSU), where she was Executive Director to VSU's Center for Agricultural Research, Engagement and Outreach. She had earlier been Dean of VSU's College of Agriculture. A native of Petersburg, Bronaugh is a graduate of James Madison and Virginia Tech Universities...Zach Hansen has been named the new Extension plant pathologist for tobacco in Tennessee. Stationed in Knoxville, he is a graduate of Clemson and Cornell universities. His short-term goals are to develop new programs for control of frogeye leafspot and black shank. Besides tobacco, he is also responsible for Extension pathology work on specialty crops....Kaleb Rathbone has been appointed director of the N.C. Department of Agriculture Research Stations Division. Since 2010, he has been superintendent of 
Rathbone
the Mountain Research Station in Waynesville. Rathbone is a native of Haywood County, where he grew up working on his family farm, raising cattle and growing tobacco. He earned his bachelor's degree in soil science and a master's degree in agriculture and natural resources management from the University of Tennessee at nearby Knoxville.  Rathbone began as a summer worker at the Mountain Research Station in 1999. He has served in several different capacities at the station since that time.

DATES TO REMEMBER: 

  • The Georgia-Florida Tobacco Tour will take place June 11-13. June 11, 7 p.m. Kick-Off Supper at Brown Lantern Restaurant, Live Oak, Florida. June 12, 7:30 a.m. Leave Live Oak, Fl., for farm visits. End in Tifton, Ga. June 13, 7:30 a.m. Leave Tifton, to visit the Bowen Farm of the Coastal Plain Experiment Station, Tifton, and farm locations near Douglas and Blackshear, Ga., ending in the late afternoon.


Saturday, April 7, 2018

Another market crisis: Chinese retaliate with tariffs on U.S. leaf

Worsening outlook for 2018: Workers set out flue-cured plants on the Kenneth Dasher farm near Live Oak, Fla., on March 22. Since then, the odds of a profitable crop have declined exponentially after China announced it may impose new tariffs on leaf imports (mostly flue-cured) from the U.S., just a few weeks after Alliance One International announced it will not buy American burley from this season's crop.


Who's the real casualty in the China/America trade war? Tobacco growers, it appears. On Wednesday, the P.R.C. announced new tariffs on U.S. tobacco and tobacco products. I haven't seen the documents yet, but according to wire reports, tariffs collected on our unmanufactured tobacco would rise from 10 percent to 35 percent, while tariffs on cigarettes and cigars would rise from 25 percent to 50 percent.

The impact of increased Chinese leaf tariffs will be almost entirely on flue-cured. China's leaf purchases from the United States are almost entirely flue-cured. Little if any American burley is purchased, because Chinese cigarettes are almost all British blends, made up entirely of flue-cured tobac-co. Burley isn't needed ex-cept in a few American blend brands that China manu-factures for foreign visitors.

The biggest victim in all this may turn out to be the flue-cured cooperative in Ra-leigh, N.C. The U.S. Tobacco Cooperative has supplied much of the P.R.C.'s needs for American leaf since China first began purchasing leaf here in the mid-2000s. Someone please correct me if I'm wrong, but I would expect that a substantial fall in Chinese sales would be a catastrophe for USTC. But if anyone thinks I am wrong on that, feel free to email at chrisbickers@gmail.com.

I will have better information when I come to you again. I spent much of today trying contact my most reliable sources on international leaf trade, but couldn't reach any of them, as if they had all stayed home in shock. I will have more for you on the China question--and on Alliance One's decision to exit the burley market--in my next issue.

In other tobacco news....

Planting is on hold in North Carolina: Matthew Vann, N.C. Extension tobacco specialist, says, "As far as I know, no tobacco has been planted in the state yet, butmany growers are ready. We have had some very cold weather at times and it would be risky to plant until you are sure it is over. I would think it will be around the middle of the month till planting gets go-ing, although there might be a few crops go in before that." The greenhouse sea-son went very well in N.C., and it appears there will be no shortage of plants.


PROSPECTIVE PLANTINGS: On March 29, USDA issued its annual projection of the number of acres of tobacco that will be planted this season. I present the projection below, but it is based on a survey of farmers conducted in early March. That was before the AOI and China developments, which might well affect planting intentions. But we can consider this a starting point.

FLUE-CURED:
  • North Carolina--158,000 acres, down three percent.
  • Virginia--23,000 acres, up five percent.
  • South Carolina--13,000 acres, up eight percent.
  • Georgia--13,000 acres, up four percent.
  • All U.S.--207,000 acres, down one percent. 
BURLEY:
  • Kentucky-- 57,000 acres, down 10 percent.
  • Tennessee--9,500 acres, down 21 percent.
  • Pennsylvania--4,400 acres, down two percent.
  • Virginia--1,100 acres, no change.
  • North Carolina--900 acres, no change.
  • All U.S--72,900 acres, down 11 percent.
FIRE-CURED:
  • Kentucky--12,000 acres, up four percent.
  • Tennessee--7,000 acres, down seven percent.
  • Virginia--280 acres, up four percent.
  • All U.S.--19,280 acres, acres, up slightly.
DARK AIR-CURED:
  • Kentucky--5,000 acres, down 17 percent.
  • Tennessee--1,600 acres. no change.
  • All U.S.--6,600 acres, down 13 percent.
SOUTHERN MARYLAND:
  • Pennsylvania (All)--1,600 acres, down 11 percent.
CIGAR FILLER:
  • Pennsylvania (All)--2,200 acres, up 22 percent.

Letter to the Editor
A farmer's opinion on why AOI abandoned U.S. burley
I can sympathize with the burley growers. It would be great to know if AOI's international burley purchases intentions are reduced. Like you, I think there is more to it. Just like the flue-cured purchases in the U.S., it is not that the demand is down-it is that it can be bought cheaper elsewhere in the world. Therefore, they do it without regard to the economic impact on U.S. growers. Basically, the tobacco companies and leaf dealers care more about the bottom line than they care about U.S. growers!
--Tom Blair, Farmer, Pittsylvania County, Va. 

DATES TO REMEMBER: 

  • The Georgia-Florida Tobacco Tour will take place June 11-13. A partial schedule follows-check here for more details as they are available. June 11, 7 p.m. Kick-Off Supper at Brown Lantern Restaurant, Live Oak, Florida. June 12, 7:30 a.m. Leave Live Oak, Fl., for farm visits. End in Tifton, Ga. June 13, 7:30 a.m. Leave Tifton, to visit the Bowen Farm of the Coastal Plain Experiment Station, Tifton, and farm locations near Douglas and Blackshear, Ga., ending in the late afternoon.

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Thursday, March 22, 2018

A MAJOR LEAF BUYER TURNS ITS BACK ON U.S. BURLEY

A disappearing breed? A burley grower and his crew in east Tennessee prepare a planter for the field in this photo from the TFN files. Attrition in the number of Volunteer State growers is likely, thanks to the loss of AOI contracts.


The world's number two leaf dealer, Alliance One International (AOI), has withdrawn from the American burley market, at least for 2018. In a statement provided to Tobacco Farmer Newsletter, the company said, 

"With U.S. cigarette sales declining at a rate of 3% per year over the past three years and global cigarette sales following a similar trend, demand for the U.S. burley tobacco crop has declined as well. As a result, we made a difficult decision to not contract any burley tobacco this year. We understand the economic impact of that tobacco has on farmers and their local communities, and this decision was not a reflection of the farmers or their crop quality, but rather the change in global demand."
 
Editor's Note: I just have to think there is more to this than the declining market for tobacco products, although I don't doubt that it was a key factorThere might be some issues on the supply side affecting all burley buyers. 

Excess production, for instance: Daniel Green, c.e.o. of Burley Stabilization Corporation (BSC), notes the current market environment for burley is very challenging. "In spite of the drastic declines in American Blend cigarette sales in recent years, growers have continued to produce burley because of the lack of alternative crops, resulting in oversupply," he says. "Tobacco dealers are generally very averse to holding any more inventories than necessary in the current climate."

And what about several developments on the national level?" Among them are the potential regulatory changes being considered by the FDA that might require tobacco to contain much less nicotine," says Green.
 
BSC is still working on its 2018 contracts, Green says, and will probably send letters to its members next week. "We will help them as much as we can."
 
There will definitely be a reduction in burley acreage this year. Will Snell, Kentucky Extension tobacco economist, estimated earlier in the year that the demand for 2018's
crop would be around 110 million pounds. "We could produce that much on 55,000 acres," says Green. "Last year, we planted 89,000 acres."

It looks that way to Tennessee Extension tobacco specialist Eric Walker as well. "It appears that we are looking at a planting cutback of at least one third, and that might be a conservative estimate," he says. "I am not aware of any buyers that might pick up the slack."

The hardest hit areas will probably be those near Hartsville, Tn., where AOI has operated its burley buying station. That would include Trousdale, Smith and Macon counties, all in Tennessee, and nearby Allen County, Ky. Note: Macon has been America's leading burley-producing county in recent years.

A state of shock 
for Tennessee growers"It was like somebody just dropped a bomb," said Macon County grower Cynthia Jones, in an interview with the Macon County Times. "Nobody was expecting it. There was no warning. Everybody is devastated." The commissioner of agriculture took  notice too. "It is heart-breaking to hear the stories of multi-generational operations being forced to shift production focus or cease operations entirely," said Tennessee Commissioner of Agriculture Jai Templeton in a statement. "Many are now facing difficult decisions that will affect their families.

The immediate impact of AOI's exit from burley will be much greater in Tennessee than Kentucky because AOI had already cut back on contracting in the Bluegrass state. "But this is a lessening of demand, so there will be increased competition among growers for the pounds that are out there," says Bob Pearce, Kentucky Extension tobacco specialist.

Farmers should emphasize quality to retain the contracts they have, says Pearce. "Some of the big [quality] concerns this year would be reducing foreign material in cured leaf and keeping pesticide residues in line with industry expectations."

A demonstrated willingness to participate in GAP as much as possible would probably be a good idea. "Getting involved with the GAP Certification program that is being rolled out could help show a commitment to the tobacco industry. But certification may not be feasible for every burley farmer," Pearce says. 
 
In other tobacco news:

As expected, planting has begun in Florida and is expected to begin in Georgia soon after April 1. "Farmers here are preparing for tomato spotted wilt and black shank using all precautions available against them," says J. Michael Moore, Georgia Extension tobacco specialist who also handles tobacco Extension work in Florida.
 
In the Southside of Virginia, it's been wet and cool, so there has been very limited land preparation, says David Reed, Virginia Extension tobacco specialist. Fumigation has been delayed too, and some greenhouses haven't even been seeded yet. So, he doesn't expect much planting till the end of April or early May. 

Virginia flue-cured plantings will definitely be down. "It will be across the board, maybe five percent and probably no more than 10 percent," says Reed.

GAP GROWER TRAINING EVENTS
Check with your local Extension Service office for further details.
All meetings listed here are free and presented in English
  • March 23, 9 a.m. Hoffman Building at Solanco Fairgrounds, Quarryville, Pa.
  • March 23, 1 p.m. Hoffman Building at Solanco Fairgrounds, Quarryville, Pa.
  • March 26, 6 p.m. Nelson County Extension Office, Bardstown, Ky.
  • March 27, 12 p.m. Po Boy's Restaurant, Douglas, Ga.
  • March 27, 6 p.m. Gallia County Extension Office, Gallipolis, Oh.
  • March 27, 6 p.m. Laurel County Extension Office, London, Ky.
  • March 28, 1 a.m. Milton Shetler Farm, Harned, Ky.
  • March 28, 9 a.m. Ivan Hoover Farm, Leitchfield, Ky.
  • March 28, 7 p.m. Southern Hills CTC, Georgetown, Oh.
  • March 29, 1 p.m. University of Kentucky, Lexington, Ky.
  • April 5, 6 p.m. New Deal Tobacco, Weston, Mo.