Friday, October 12, 2012

USDA PROJECTION: FLUE-CURED 495 MILLION LBS, BURLEY 202 MILLION


The U.S. Department of Agriculture issued the results of its last survey of the year of tobacco production on Thursday, and it continued to project an enormous increase in N.C. flue-cured over last season, as it did last month. In fact, it projected four million pounds more than in the controversial projection of September: 394 million pounds, up 58% from last season. But that level of production for Tar Heel tobacco remained questionable among many of Tobacco Farmer Newsletter's most reliable sources. Why? Because the Eastern Belt crop does not appear extremely large, while much of the good Old Belt crop is still in the field and could fall victim if there is an early frost. An estimate of 360 to 370 million pounds seemed much more credible to them. Among individual states and types, USDA projected:

FLUE-CURED


* All U.S. flue-cured--495 million pounds, 44 percent above last year.

* N.C.--394 million pounds, up 58 percent from last season.
* Virginia--48 million pounds, up 10% from last season.
* S.C.--28.2 million pounds, up seven percent from last season.
* Georgia--24.1 million pounds, down nine percent from last season.

BURLEY


* All U.S. burley production is expected to total 202 million pounds, according to the survey. That would be 17 percent more than last year and is up from the 195 million pounds projected a month ago:

* Kentucky--148 million pounds, up 15% from last season.
* Tennessee--30.4 million pounds up 34%  from last season.
* Pennsylvania--11.5 million pounds, up four percent from last season.
* Virginia--5.1 million pounds, up 35 percent  from last season.
* N.C.--3.6 million pounds, up one percent  from last season.
* Ohio--3.6 million pounds, up seven percent from last season.

OTHER TYPES:


* Fire-cured--53.2 million pounds, up three percent from last season.

* Dark air-cured--14.9 million pounds, down seven percent from last season.
* Southern Maryland--6.6 million pounds, up 11 percent from last season.
* Cigar types--8.7 million pounds, up 14 percent from last season.

Whatever the volume, N.C. flue-cured growers have produced a crop with exceptional quality, says Loren Fisher, N.C. Extension tobacco specialist. "The cooler weather toward the end may have helped." As of Friday, Fisher says harvest of the Eastern Belt crop will be complete very shortly. "A lot remains to be harvested in the Old Belt, but if we can get 10 to 14 days more from today (October 12), we should be in good shape," he says. "But a killing frost in that time period would be a problem." Yields are good but not excellent, largely because of all the rain.


A buyer who didn't meet his goals in the East. At Whitehall Trading Co.,  the new non-contract grading station in Seven Springs, N.C., less tobacco was delivered than expected. "We didn't get as much as we hoped," said Mack Grady, one of the principals at Whitehall, which commenced operations this season. "But we did enough business to do this again next year." Whitehall was founded as a place to sell flue-cured tobacco that doesn't have a home, and most of what was delivered this season was the lesser-quality grades, said Grady. Deliveries had for the most part ended by October 13.



A "live" auction for high Piedmont prices: In downtown Danville, Va., close to the banks of the Dan River, a warehouse is selling flue-cured by way of a conventional auction. Jim Eggleston, one of two partners running Piedmont Warehouse, says the sales so far this season have been going very well. "We are getting prices comparable to contract prices, and some grades are bringing higher than contract prices," he says. "There is a lot of demand. There must be a shortage somewhere." Piedmont has a sale every Friday, usually with five to seven buyers, and has been averaging around 200,000 pounds per sale. Farmers and buyers share in the per-pound cost. Farmers have the option of refusing a bid but Eggleston says there has been very little tag turning so far this season. This is the third season that Piedmont has operated. "We ran a silent auction for two years, but this year we went to a live auction. The farmers we deal with like the live auction better. There has  definitely been some dissatisfaction with contracting in this area." For more information on Piedmont Warehouse, which is located on Trade Street near US Highway 58 Business, call Eggleston at 434 489 4292 or his partner T.Y. Mason at 434 203 1404. Note: Eggleston says there is a great deal of tobacco still on farms in the Old Belt. An early frost could be a problem.


Hoping for a late frost too. Harvest is well behind schedule for dark tobacco growers in Kentucky and Tennessee are. "I estimate that we are are about 75 percent finished, where most years we would be 85 or 90 percent done," says Andy Bailey, Extension dark tobacco specialist. "Weather has held us up the last 10 days, and we have a labor shortage--we are cutting a lot of tobacco with fewer workers than usual."


Alternative markets increasing. There has been a dramatic increase recently in the number of what leaf dealer Rick Smith of Wilson, N.C., calls 'secondary' leaf markets. "And it's not a bad thing," says Smith, president of Independent Leaf Tobacco. "I consider this development not only desirable but inevitable." Some method of absorption into the trade had to be found for tobacco produced without a contract, or produced in excess of the contract amount, or produced with a contract but without meeting the contract's quality requirements. "Excess tobacco has and will find itself without a home, and sooner or later, some means had to be devised for it to enter the trade," he says. Smith has been cheered by the rise of conventional auctions in Kentucky, Virginia and North Carolina (like Piedmont Warehouse); sealed bid auctions in North Carolina; and grading stations that don't require contracts in North Carolina (like Whitehall Trading). That amounts to quite a few more marketing venues than growers had at the time of the buyout, and there may yet be more, says Smith. "In the leaf market of today, growers simply can't have too many outlets."


Dates to remember



  •  Annual Meeting, Burley Stabilization Corporation. Starts at 9 a.m., October 22, at the corporation's office, 835 Bill Jones Industrial Drive, Springfield, Tn. Ends with lunch.
  •  Annual Meeting, U.S. Tobacco Cooperative. Starts at 10 a.m., November 8, at Holshouser Building, N.C. State Fairgrounds, Raleigh, N.C. Ends with lunch.

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