Friday, March 22, 2013

The outlook for this season is looking awfully good

A flue-cured grower near Raleigh, N.C., clips his plants.

And that is largely because of strong demand on the foreign market. The outlook could remain positive for some time, says Kirk Wayne, president of Tobacco Associates, the U.S. leaf export promotion organization. "There is a shortage of flavor tobaccos at a time when there is fairly consistent demand. I expect this situation to last for some time." Where Wayne sees the most growth potential for U.S. leaf is Asia. "In China, there is an increasing demand for quality tobacco as the consumer base improves.  In fact, they are buying higher quality consumer products of all types." China is not able to produce the flavor style tobacco they need for quality cigarettes. "That's why they turn to us," he says. "We see similar situations in Indonesia, the Philippines and Viet Nam. Those are countries  where Tobacco Associates is paying close attention."

A new variety that performed very well in demonstrations in 2012 will be planted on about 500 farms this season. CC 143 harks back to K 326 in many characteristics but generally performs better. "It produces better quality, high to very high yields, a bright style of leaf and excellent holding ability," says Sam Baker, Cross Creek vice president. "What's more, it has very high resistance to Granville wilt and both races of black shank." Are seed sales up? Yes, says Baker who expects a three to four percent increase in flue-cured plantings this year in North Carolina and Virginia, the two states where his company does business.

Watch for the April issue of Tobacco Farmer Newsletter on or close to April 1. It will include a full report on USDA's planting projections for this year's crop.

What is happening in other tobacco-producing countries? Several Tobacco Farmer Newsletter readers have written recently with reports on the upcoming crop (in Canada) and the upcoming markets in Zimbabwe and Zambia.

  • Canada: An increase in acreage of about 20 percent appears on the way in southern Ontario. Tobacco farmers are generally quite happy about this. The stretch from 2000 to 2009 was extremely hard on our industry here, and the producers deserve some optimism for a change. It looks like farmers have contracts targeting for about 62.5 million pounds for this crop. The trade was looking for a little more, perhaps 65+ million pounds, so a farmer was able to sign a contract for whatever he wanted to grow, as long he had the barns for it. But barn space was frequently an issue. Prices on used barns have escalated. Barns of the popular line De Cloet Classics (2000 series) are selling for their original purchase price--if you can find them for sale. There isn't a moth-balled yard of curing barns that doesn't have tire tracks around it, regardless of age. 
  • Zimbabwe: Zimbabwe's tobacco quality is good. But production will be greatly reduced due to prolonged moisture stress. I personally have put in seven hectares of dry land tobacco. Not enough significant rains have fallen yet to quench and save the dry land crop from wilting.  
  • Zambia: Marketing will begin March 22. Production of the flue-cured crop should be in the region of about 25 million kilos of flue cured and about the same of burley though these figures are distorted by tobacco smuggled in from Malawi. A very wet January has affected the late flue-cured crop, which was planted in November and December and is planted by small-scale growers. The crop from these plantings has not developed well, and yields of plus or minus 1,500 pounds per acre are expected. Earlier plantings (from mid-August to October) are good to very good quality-wise but yields per hectare are down averaging around 2,800 pounds per acre when the norm should be over 3,500 pounds per acre. Merchants have told growers here that there is an oversupply of mediocre and poor quality tobacco on the world market, and only ripe oily styles will fetch top dollar. Farmers have responded to this and adjusted their growing and curing techniques accordingly. They are producing quality rather than quantity.

A note from the editor: I recently had the chance to renew an old friendship when I ran into Dwight Watson of Gold Rock, N.C. Dwight was famous for the high quality of his tobacco in the Eighties and Nineties. In 2003 he made an ill-fated trip to Washington, D.C., and ended up in legal trouble. That is all history. Now, he has retired from farming and is concerned with the disproportionate number of children of Gulf War veterans who have been born with physical abnormalities. At the time I saw him, he was setting up a foundation called Camp MP Jack to help veteran families with children special needs of this type. If it is successful, he hopes eventually it can help any child with special needs...But he still has tobacco on his mind, and right now he is very worried that the state Attorneys General and the federal lawsuit still being heard by Gladys Judge Kessler could devastate future domestic consumption. "It seems to me that the Attorneys General have sued the tobacco industry for obeying laws they made us obey," he says. Another concern: The presence of dicamba and other contaminants coming in on foreign leaf could be a problem for the American tobacco industry if they show up in manufactured cigarettes. By the way, if contaminants are really a problem, Watson suggests taking a portion of the selling price of cigarettes and using it to pay American farmers to grow tobacco organically.


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