Wednesday, April 1, 2015

USDA CLAIMS: PLANTINGS WILL BE CUT 10% OR LESS



Setting plants

Planting flue-cured tobacco near Nashville, N.C. (File photo)

A very optimistic production estimate from Washington: The U.S. Department of Agriculture issued its Prospective Plantings Report for 2015 at noon Tuesday (March 31). It projects that all American tobacco acreage in 2015 will be 345,280 acres, down nine percent from 2014. The projection for flue-cured, at 220,000 acres, would be 10 percent less than 2014. Burley, at 93,700 acres, would be eight percent below last year. For fire-cured, the 17,980 acre production would be down three percent from 2014. A few types are expected to increase in acreage. Dark air-cured, at 6,400 acres, would be four percent above last year, and all cigar types, at 5,000 acres, would be five percent above last year. Southern Maryland at 2,200 acres would be up 10 percent. I sure hope these projections are close to the mark, but all information I have encountered leads me to think that reductions for flue-cured and burley will be much greater.

There may be a specific reason why this report, based like all the USDA tobacco reports on a grower survey, might be way off. Will Snell, Kentucky Extension tobacco economist, wrote in the March 25 Economics and Policy Update from the University of Kentucky that the USDA survey used to create this Prospective Plantings Report was based on grower expectations as of late February and early March. "(That was) prior to the roll-out of tobacco contracts," wrote Snell. "Given that grower expectations for 2015 burley contract volume were likely higher several weeks ago (than now), I anticipate USDA burley planting intentions for 2015 to be inflated relative to actual contract volume and actual plantings." Based on what he has heard, Snell believes that a reduction in 2015 of 30 or even 40 percent of burley acres is possible. 

Following are the Prospective Plantings projections by type and state. Flue-cured: NC--175,000 acres, down nine percent. VA--19,500 acres, down 13 percent. SC-- 13,000 acres, down 18 percent. GA--12,500 acres, down 17 per cent. Burley: KY--70,000 acres, down eight percent. NC--1,300 acres, down seven percent. Ohio--2,000 acres, same as 2014. Pa.-- 5,000 acres, down two percent. TN--14,000 acres, down 10 per cent. VA--1,400 acres, down seven percent. Fire-cured: KY--10,500 acres, down two percent. TN-- 7,200 acres, down five percent. VA--280 acres, down 15 per cent. So. Maryland: 2,200 acres, up 10 percent.  Connecticut & Massachusetts cigar leaf: 2,900 acres, up four percent. Cigar filler:PA--2,100 acres, up five per cent. Dark air-cured: KY--5,200 acres, up four percent. TN--1,200 acres, up four percent.

Why is all this volatility happening? Snell suggested some of the factors that are influencing burley contracts. Most will apply just as well to the other types.
  • A global surplus of burley has rapidly materialized over the past 18 months. World burley production has increased by more than 30 percent, while global consumption has declined.
  • Export demand is extremely weak amid an abundance of cheaper foreign leaf, and an increase in the value of the U.S. dollar is making US leaf more expensive in foreign markets.
  • Some buyers over-committed in purchasing the 2014 U.S. burley crop and then found that demand expectations did not materialize.
  • The loss in Malawian burley production due to flooding was not as devastating as initially reported.
  • Current and forecast sales of American blended cigarette sales continue to fall.
  • Tobacco companies expect U.S. growers to produce above contract volumes, providing an opportunity to purchase lower-priced leaf.
  • Tobacco companies continue to tighten burley inventories amidst a very uncertain domestic and global regulatory environment and a small but rapidly emerging "non-combustible" market.
  • Excess supply provides an opportunity for companies to end its arrangements with lower quality growers and those who have not met previous contract obligations.

Renovate used barns rather than buy new ones? Jeff Simpson of Roseboro, N.C., doesn't see the sense in buying flue-curing barns new. Instead, when he needs more curing capacity, his strategy has been to buy used ones and renovate them. "I can rebuild them on my farm and install new burners," he says. "I put $6,000 to $7,000 in each. A new one will cost $40,000. He says he can renovate 16 used barns for the cost of two new ones. "And they do just as good a job." He uses burners from BulkTobac, which he finds simple and sell at a reasonable price. 

Canadian curing barn now has an American dealer. Farm equipment dealer Brock Equipment Co. of Bailey N.C., now sells barns made in Ontario by Tytun Ltd. Owner Lee Brock has models on display at his dealership, which is between Raleigh and Wilson.  "It is the best built barn I have ever seen," he says. "It is very efficient." For more information, call Brock at 800 849-7569.


A last thought, and not a particularly cheering one, from economist Snell: "The remaining growers (after contracting cuts) will need to realize that an excess supply market likely results in more critical grading for the 2015 crop and that non-contract tobacco production will be extremely risky. With 
anticipated tighter margins, growers will have to place an even greater emphasis on quality, labor efficiency and yield to have a favorable outcome for the 2015 crop."


UPCOMING GAP RECERTIFICATION MEETINGS

KENTUCKY (Burley)
  • April 6, 6:30 p.m. LYNC (Distance Training) This is a live webinar. Please contact your local County Extension Office to attend.
  • April 30, 7:30 p.m. Marriot Griffin Gate Hotel, 1800 Newton Pike, Lexington, Ky., Fayette County. Contact 859-257-5110 or rpearce@email.uky.edu.
TENNESSEE (Burley)
  • April 28, 7:30 p.m. Trousdale County High School, 262 West McMurry Blvd., Hartsville, Tn. Trousdale County. Contact 615 382-3130 or ewalke22@utk.edu.
MISSOURI (Burley)
  • April 7, 6:30 p.m. Weston Café, 407 Main St., Weston. Platte County. Contact 816-776-6961 or millerww@missouri.edu.
OHIO (Burley)
  • April 13, 7 p.m. OSU Extension Office, 111 Jackson Pike, Gallipolis, Oh. Gallia County. Contact 740-446-7007.
  • April 14, 7 p.m. Eastern Brown High School Cafeteria, 11557 U.S. Hwy. 62, Winchester. Brown County. Contact 937-544-2339 or rowe.316@osu.edu.

We hope you have enjoyed  April I issue of Tobacco Farmer Newsletter. If you haven't signed on to receive it regularly and would like to receive it, or if you need to change an address, please click on "Join our mailing list" and follow the prompts. For more information, you can call me at 919-789-4631 or email me at chrisbickers@gmail.com. Thanks--Chris Bickers



ADVERTISING




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FARMERS TOBACCO WAREHOUSE
 209 Harding St., Danville, Ky.
PH: 859-236-4932

Full-service burley warehouse

Jerry Rankin, Owner


Long Announces Release of New Product, 
The Solar Eagle Curing Barn

 
Long Tobacco Barn Co. of Tarboro, N.C., announces it has released its newest flue-cured tobacco barn, the Solar Eagle, for 2015 delivery. Based on Long's all-steel Model 1196, the new model utilizes hybrid energy sources--solar and gas. University-monitored testing has verified it is the most energy efficient barn on the market. Data gathered in 2014 verified it was the most energy efficient barn at a University monitored farm site. Since 2010, several full-scale models have undergone extensive field trials for over 200+ curing cycles. During that period, Long made refinements to the barn's design to further increase its efficiency and ease of use.

Testing conducted in 2014 on the Roberts Farm in Brunswick Co., Va., which was monitored by Virginia Tech, verified the Solar Eagle outperformed all the other barns at that location. The thirty-one barns at that site included fifteen the Roberts purchased new in recent years from three different manufacturers. The 2014 data owed the average fuel efficiency of the Solar Eagle was 15.3 lbs./gal versus 13.7 lbs./gal for the next most efficient barn. The production efficiency of Long's new barn was also much higher. The Solar Eagle averaged 407.5 lbs./box of cured leaf versus an average of 303.1 lbs./box for the other new barns built by other manufacturers.

During the several years Long spent refining the Solar Eagle, rumors circulated that it did not work. Ironically, the solar test barns worked too well. Early tests showed that, on a sunny day, the barns maintained a temperature of 135°F using only a solar collector. Since that is higher than what's needed for yellowing, Long wanted to make sure the Solar Eagle's automatic solar cooling system was foolproof and reliable prior to the releasing that new barn. Ernie Roberts reports that, during the five years of use, Long's solar barns have never overheated while yellowing. Dr. David Reed, the Virginia Extension tobacco specialist who oversees the barn monitoring program on the Roberts farm, says, "During the course of field trials over the past few seasons, modifications of Long's solar test barns have refined those barns' design to make their operation and curing management simpler for the grower. Data we have gathered clearly shows a gain in curing efficiency during sunny weather. Long's solar barns have a built-in system to exhaust excess heat from the solar collector. We have not observed any negative effects in cured leaf quality that would be expected to occur with overheating during yellowing in the solar barns."

The Solar Eagle saves fuel by using solar energy to preheat fresh air for curing, and by conducting heat into the curing chamber through the solar collection plate that doubles as the barn's structural steel shell. The solar collector that encases the barn also creates a negative air space that traps any heat lost from its curing chamber and returns that heat to it. Aerodynamic enhancements enable the Solar Eagle to dry leaves and stems faster. They include Long's new "Jet Intake" heat exchanger, a deeper lower plenum with diverter plates to reduce drag, a turning vane under the furnace, and a two-tier wall air seal that forces more air through the boxes.

The Solar Eagle retains all the features of Long's other Eagle series barns, including a heavy steel chassis, a fan motor rated at 176°F and Long's unique tobacco viewing door. 

To inquire about the Solar Eagle, contact Long by telephone (252-641-4796) or email (info@longtobaccobarn.com).

6 comments:

  1. I feel like the plantings will grow rather than be short year after year by 10%. That is such a high number. With weed becoming more legal and CBD being legal I see it growing.

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  3. We will see what happens, but I think that number is off. I feel like it would increase.

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