IS THE PRODUCTION OUTLOOK FOR  FLUE-CURED REALLY THAT GOOD? A Tobacco Farmer Newsletter Special Report September 18, 2012   Since the USDA issued its September crop report last week (see "Outlook for current crop keeps getting better," Tobacco Farmer Newsletter, September 13, 2012), there has been considerable comment that the volumes predicted for flue-cured may be too optimistic. One of the most thoughtful responses was prepared by Graham Boyd, executive vice president of the Tobacco Growers Association, and published in the most recent issue of the association newsletter. Excerpts follow: Are flue-cured prospects really that good? By Graham Boyd The recent USDA crop report surveys growers in August and compiles data to issue a crop forecast on September 1. USDA has the crop projection at 490.2 million pounds of flue-cured. (But) our organization calculates this crop will be considerably less. The consensus is that the crop yield is expected to approximately 2200 - 2300 pounds. Locations east of Wilson County certainly will be less than that target. Excessive rainfall has washed out the crop in terms of weight per acre. However, the quality is excellent! Much of the crop is very ripe and has oil. It simply takes more acres to fill a barn. Another factor reducing the weight was storm damage, especially the straight line wind event that struck in early July. If that single event blew off an average of 2-3 leaves per stalk then that accounted for 10-15 percent of the potential harvest in a matter of minutes on a high volume of acres in 15 counties east of Edgecombe. In addition there was a significant amount of "blown over" tobacco that required re-standing. In late August we began to realize the impact of storm damaged stalks. The plant integrity has been compromised and the plant becomes increasingly more vulnerable to disease pressure. The challenge today is becoming how to save the crop. In many locations in the East, the crop is completely out of the field. By comparison, growers in the Old Belt report having not harvested all of the first pulling yet and are becoming nervous about early frost. Here's how we add it up. If N.C. planted 162,000 acres of flue-cured, and it averages 2,200 pounds we will only market 356.4 million of flue-cured. If USDA figures prove correct in the neighboring states--VA=48 million, S.C.=27 million and GA=25 million--then the crop total will be 465.4 million pounds. One positive for U.S. growers is the high quality of this crop. Markets seem to reflect it: During the first week of September. nearly every major contract company implemented price changes. The prevailing average value for a quality B1 grade of tobacco now ranges between $2.15 and $2.20. The pace of deliveries to the marketplace had been slower than usual for the first month of tobacco receiving. Much of that was attributed to the late season excessive rains that charged the plants with new nutrient uptake and "re-greened" the crop causing a slight lag in harvesting. Other factors were involved, including widespread wind events and accompanying high volume of hailstorms that damaged or even removed some of the scheduled harvest for many growers in the East. In the Old Belt, the crop was delayed in many areas waiting on adequate rainfall. The majority of growers report being very satisfied with how the crop is grading and selling. In general the crop is regarded by growers as a good quality crop for marketing. However, nearly every grower reports his crop is now anticipated to check up light in total pounds per acre.--Graham Boyd  Other opinions: To get additional perspective, I asked Extension agronomists in flue-cured states their take on the September crop report. Loren R. Fisherof North Carolina says, "I have asked around, and most people think that the USDA number is a little high based on current and expected harvest conditions of the crop. I think a 450 to 460 number is more realistic based on what I have heard, but it is very, very difficult to estimate the crop size now." David Reed of Virginia says, "The figure for Virginia is probably accurate. We still have quite a bit of the crop still in the field, but it is holding reasonably well at this time. We are probably at 40 percent or slightly higher on the harvest." The USDA acreage figures are on the low side, he says, probably by 1,500 acres...Georgia yield will likely be down from the good 2011 yield, says J. Michael Moore of Georgia. Acreage is down too, meaning there will be a substantial reduction in total production in Georgia in 2012. "Georgia production is up 0.96 million pounds since last month thanks to a 100-pound expected increase in yield, putting production at 23.04million pounds," he says. But any estimate these days must of necessity be shaky. "Without the old Market Reports and the estimates of the knowledgeable folks in the supply chain we used to depend on for information, the numbers thrown out this time of year have little chance of being representative of actual production," Moore says. Finally: How much burley will N.C. produce? The crop report projection for N.C. burley, as for N.C. flue-cured, raised eyebrows. It projected that at the beginning of September burley production in the state would be 3.515 million pounds, 30 percent more than it had projected at the beginning of August. I brought this to the attention of Stanley Holloway, N.C. area Extension burley agent, and he was a bit mystified too. "I don't have a good handle on what the crop is like in the non-traditional N.C. areas (in the flue-cured belt), but in the traditional area of western N.C., we would not expect to have improved 30 percent in such a short time." But he did say the weather and other conditions in western N.C. have been favorable and a good yield is expected. "In Yancey County, one farmer tells me that this looks like his best-ever crop," says Holloway. "He says he has never seen tobacco as heavy bodied on the hills. I think we will have a number of farm yields close to 3,000 pounds per acre, and maybe some as high as 3,500 pounds."  Editor's Note: You can review the original TFN coverage of the September USDA crop report, by going on the web to our blog at modtob.blog.spot. If you are not receiving Tobacco Farmer Newsletter and would like to, email me at chrisbickers@gmail.com. Write "Subscribe" and your tobacco type, town and state. For more information, call me at 919-789-4631 or email me at the above address. Watch for our next issue in early October--Chris Bickers, Editor. Note: If you can't see the photographs or ads, click above where it says "Having trouble viewing this email."  ADVERTISING TOBACCO WANTED--ALL GRADES Whitehall Trading Co. Farm Tobacco Only / NO Dealers Call Joseph Parker or Mack Grady 252-559-0061

TOBACCO OUTLOOK GETTING BRIGHTER?

Final harvest of flue-cured tobacco near Seven Springs, N.C., September 12. 

USDA issued its September crop report Wednesday showing that flue-cured production is up a projected 44 million pounds since its August report, for a total current projection of 490.2 million pounds. According to the report, which is based on a farmer survey asking about conditions as of September 1, all that increase took place in North Carolina, where plentiful--but for the most part not excessive--rainfall allowed growers to produce an extra 43.5 million pounds since the August report for a total for the state of 390 million pounds (up 57 percent over 2011). Among the other flue-cured states: The Virginia projection is down slightly from last month for a total of 48 million pounds (up 10 percent from 2012) while the South Carolina projection is about the same as last month at 27 million pounds (up two percent from 2012). Georgia is up 1.1 million pounds since last month thanks to a 100-pound expected increase in yield to 2,400, putting production at 25.2 million pounds (down almost six percent from 2012). Florida doesn't participate in the survey, but Extension tobacco specialist J. Michael Moore tells Tobacco Farmer Newsletter that thanks to Tropical Storm Debbie, production there will be substantially reduced. "About 300 of the original 850 acres planted could not be harvested. Also, the excessive water washed out nutrients so that the yield was off considerably. This is a very nitrogen-deficient crop. It didn't develop a lot of the normal characteristics." TFN will have an estimate of production in Florida as soon as it is available.


Burley production is up too, but not as much. It is expected to total 195 million pounds, up nine million pounds from the August report and up 13 percent from last year. Kentucky and Tennessee accounted for nearly all the increase in the last month. The projection for Kentucky was up 5.7 million pounds at 140.6 million pounds (up 10 percent over last year), while for Tennessee it was up about two million pounds at 30.4 million pounds (up nearly 35 percent from 2011). It seems a little hard to believe, but the crop report projected North Carolina burley production at 3.515 million pounds, which if true would be a whopping 30 percent more than was projected in August. The editor will research this point and try to substantiate it next month. Virginia, Pennsylvania and Ohio projected roughly the same as last month. No other burley states participate in the survey.


Among other types: Dark fire-cured is projected down two percent at 50.8 million pounds, dark air-cured down seven percent at 14.8 million pounds, Southern Maryland is up 11.1 percent at 6.6 million pounds and cigar types up 14 percent at 8.7 million pounds. 


More on alternatives to contracting...

Sealed bids for the best possible price? Big M Tobacco is now selling flue-cured tobacco by way of what it calls a "sealed bid" auction at the Liberty Warehouse in Wilson, N.C. Buyers inspect the bales, mark their bids on a sheet, seal it in an envelope and give it to manager Greg Ray. When all buyers have submitted their bid, Ray opens them, determines the high bid and informs the grower. He has the option of rejecting the bid, but Ray says that has very rarely happened. "We have competition with eight or 10 buyers at each sale, and the sealed bid gives the buyer a lot of incentive to make his bid at the highest level he can afford," says Ray. "We feel this system gives the farmers the best chance at getting the highest price." The warehouse can sell 200,000 pounds per sale. "So far this season we are selling once a week, but we will begin twice a week sales later," Ray says. "Last season, our volume was about 6.5 million pounds." Call Ray at 252-799-6061 for more information.
  

Where to sell tobacco that doesn't have a home: A new company in Seven Springs, N.C., is providing a new and completely legal avenue for tobacco farmers to sell tobacco that doesn't have a home. Joseph Parker and Mack Grady, who are both associated with the Cureco company in Seven Springs, have formed Whitehall Trading Co. It is already buying tobacco from the current crop (for now, flue-cured only). "The goal of Whitehall Trading Co. is to give the farmer an alternate method of marketing all grades of tobacco, including the lesser-quality grades," says Grady. "But it can't be wet or damaged. It should be in clean and dry condition." He notes that the program Whitehall is following complies with all pertinent regulations. "Our books are clean, and our customers' books will be clean as well." So far, Whitehall's early sales have all gone to a single tobacco company. But Grady and Parker expect there will be more purchasers before the season is over. For more information, call Parker at 252-559-0061.

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TOBACCO FROM THE HISTORICAL POINT OF VIEW

Buy "A Brief History of North Carolina Tobacco" by Billy Yeargin, from History Press. The days when rural life revolved around tobacco planting and harvest are gone, but many fondly remember when North Carolina was the state of farming, planting and picking tobacco. In this book, historian Yeargin takes readers back to the days when communities were founded and built upon tobacco culture, and when traditions developed as industries were born. For a copy, send $21.99 to 112 N. Webb St., Selma, N.C. For more information, email Yeargin at tobhistry@aol.com. Also available: A companion work called "Remembering North Carolina Tobacco," also by Yeargin. Retail price is $19.99. Specify which or both books you want and send check or money order, made out to Billy Yeargin, at the above address. 

Auction sales of 2012 begin in North Carolina

Workers pick through flue-cured
leaf near Wendell, N.C.

The first leaf auction of the year took place on August 28 at the Old Belt Tobacco warehouse in Rural Hall, N.C., near Winston-Salem. The next is scheduled for Tuesday, September 11. "We sold 155,000 pounds, all flue-cured. Buyers and sellers were well  satisfied. "The first sale went real well," says Dennis White, who is manager of the warehouse.The bidding was very strong, and every lot on the floor attracted a bid. There was no ticket tearing." Top quality lugs brought $1.80 per pound, and second quality brought about $1.65. "There was very little real cheap tobacco," says White. "Any that had any color sold for $1.60. 'Dead' tobacco brought $1." There were six buyers, with Independent Leaf Tobacco and Bailey's Cigarettes particularly active. White plans on selling on each Tuesday for the rest of the season and is prepared to sell on as many additional days as necessary to move all the tobacco that farmers bring. The next sale will be on and White expects to sell 250,000 pounds. Later in the season, burley will also be sold.

  

Auction sales in Kentucky will get under way in November. "Our first sale will take place the second Monday in November," says Jerry Rankin, a burley grower/ warehouse owner in Danville, Ky. "We will have as many sales per week as we need to accommodate this crop. We can sell two or three days a week if necessary. We expect to move about half a million pounds per sale." No scheduling is required, but you can reach Rankin at 859-319-1400. "Bring it in and we will sell it," says Rankin. "No amount is too small." Other auctions are expected to be held in the Lexington and Mount Sterling markets and perhaps some others. Editor's note: If you are operating an auction warehouse in any state for any type, please send descriptive information to me at chrisbickers@gmail.com and I will run it in a future issue.

  

Watch for the next issue of Tobacco Farmer Newsletter in about a week, featuring an analysis of the September USDA Crop Report. Till then, following are some brief notes on the crop at this point:

  

There was an exorbitant amount of rain in North Carolina counties close to Wilmington late in August. "It rained 12 days straight at one point," says Alan Wooten of Currie. "And they were torrential." The crop can be saved but some yield reduction seems likely.

Tobacco in Mecklenburg County on the southern border of Virginia was affected by heat and drought. "I think the heat did us more harm than the dry weather," Bruce Hall, a farmer who grows about 80 acres of tobacco, told the Richmond Times Dispatch. He said his crop looks good on balance, but "those 100-degree days really affected the tobacco, and I'm thinking it is going to cut the yield maybe 10 percent on some of it."

An odd year in Kentucky, says Bob Pearce, Kentucky Extension tobacco specialist. "Basically our burley looks pretty good, and we should have at least an average crop, maybe a bit better than average in some places. Our production should be close to USDA projections." Roughly 50 percent of the state's burley had been harvested through Labor Day, and farmers were just getting into curing, he said. Unirrigated burley in the west part of the state was showing some effects of drought.

The burley crop in Tennessee may be slightly above average, says Paul Denton, Tennessee Extension tobacco specialist. "There is a little black shank, a little drowning, but for the most part it looks good," he says.

About 40 percent of the Georgia crop remained to be harvested at the Labor Day break, says J. Michael Moore, Georgia Extension tobacco agronomist. "It is holding up pretty well," he says. Harvest of the Debby-damaged Florida crop is complete, says Moore.