Wednesday, December 6, 2017

EARLY PROJECTIONS: BURLEY CONTRACTS DOWN, DARK CONTRACTS STABLE


The global supply/demand balance for burley improved entering 2017 following three years of excess supplies and dwindling demand, says Will Snell, Kentucky Extension tobacco economist. "Demand conditions for U.S. burley remain soft in the international market." U.S. burley exports fell 24 percent in 2016 and are down more than 15 percent so far in 2017, he says "Alternatively, imports of burley tobacco into the U.S. market have continued to gain market share, comprising one-half to two-thirds of all burley used by U.S. cigarette manufacturers in recent years." Domestic cigarette sales are expected to fall three to four percent in 2017, matching the historical annual decline of nearly 30 percent over the past decade, he says.

Despite deteriorating demand conditions, the outlook for the current U.S. burley marketing season is benefitting from a large decline in African burley production this past year, Snell says. "Kentucky burley yields will be higher, and overall the quality of the 2017 crop appears favorable for buyers." Good quality crops should average in the low to mid $1.90s, up a few cents from the past two seasons, he says. But Africans are boosting production in 2018 which will likely lead to a global surplus in the coming year. "Consequently, the early outlook is for a reduction in U.S. burley contract volume in 2018, especially if the 2017 crop comes near the level currently projected by USDA."

The dark tobacco outlook looks much brighter than does burley's. "After a dismal 2016 dark tobacco crop, the size and quality of the 2017 dark tobacco crop rebounded considerably this past season," says Snell. "USDA has the dark tobacco crop exceeding 70 million pounds, com-pared to less than 50 million pounds in 2016." Annual snuff consumption is still growing, but at a slower pace. Prices for this year's dark crop should continue to average around $2.40 per pound for dark air-cured and $2.75 per pound for dark fire-cured. "Look for dark tobacco contract volume to remain relatively constant for the coming year," says Snell.

Burley stripping is over half way complete in Kentucky. "It is a fairly decent crop," says Bob Pearce, Extension tobacco specialist. The quality is the best in several years." He hasn't seen enough crops to make a good estimate of the state's production, but he thinks USDA's most recent estimate of Kentucky burley--132 million pounds--is probably at least 10 percent too high.

The progress is similar in Tennessee, where Eric Walker, Tn. Extension tobacco specialist, says stripping is proceeding at an average pace or better. "Some farmers are not far from being done," he says.

No new varieties for burley or flue-cured this season, but Pearce says the relatively new burley variety from the Kentucky-Tennessee program--KT 215--seems to be catching on with growers because of its good resistance to Race 1 black shank. It is also resistant to fusarium wilt but has no resistance to potato virus Y.

GAP GROWER TRAINING EVENTS
North Carolina (Flue-cured)
  • January 8, 9 a.m.-12 p.m. Wilson County Ag. Ctr., 1806 Goldsboro St., Wilson.
  • January 9, 9 a.m.-12 p.m. Yadkin County Extension, 2051 Agricultural Way, Yadkinville.
  • January 10, 9 a.m. - 12 p.m. Edgecombe/Nash County, Farmers' Market, 1006 Peachtree St., Rocky Mount.
  • January 11, 9 a.m.-12 p.m. Johnston County Extension Office.
  • January 12, 9 a.m.-12 p.m. Granville County Expo & Convention Center, 4185 US-15, Oxford. 
  • January 22. 9 a.m. - 12 p.m. Caswell County Civic Center, 536 Main St, Yanceyville. Also for farmers from Person, Alamance, Guilford and Orange Counties.
  • January 23, 9 a.m.-12 p.m. Forsyth County Extension Office., 1450 Fairchild Rd # 6, Winston-Salem.
  • January 24, 9 a.m.-12 p.m. Martin County Farmers Market, 4001 W Main Street Extn., Williamston.
  • January 25, 9 a.m.-12 p.m. Pitt County Cooperative Extension Office.
  • January 25, 2p.m. - 5p.m. Sampson County Ag Expo Center. Duplin County included.
  • January 26, 9 a.m.-12 p.m. Lenoir County Shrine Club, 1558 US-70, Kinston. Greene/Lenoir/Jones/Craven/Carteret Counties included.
  • January 29, 9 a.m.-12 p.m. Wayne County Extension Office.
  • January 30, 9 a.m.-12 p.m. Lee County Extension Office. 
DATES TO REMEMBER
  • December 7, 8 a.m. N.C. Tobacco Day 2017. Johnston County Extension Center, 2736 N.C. Hwy. 210, Smithfield, N.C. Meeting ends with lunch.
  • January 17-18, 10 a.m. S.C. AgriBiz and Farm Expo Florence (S.C.) Civic Center at the junction of I-95 and I-20.
  • January 31-February 2, 9 a.m. Southern Farm Show. N.C. State Fair Grounds, Raleigh, N.C.
  • February 2, 10 a.m. Annual Meeting, Tobacco Growers Association of N.C., Holshouser Building, N.C. State Fairgrounds (during Southern Farm Show). Meeting ends with lunch.





No comments:

Post a Comment