THE SMALLEST U.S. BURLEY CROP IN HISTORY?

Hard to believe now, but this good-looking burley--photographed on the Kentucky burley tour in mid-August--was part of the smallest burley crops in U.S. history. But the ax was just waiting to fall when this picture was taken, in the form of inopportune rains in September that just went on and on.

The burley crop just coming on the market has been projected at 90 million pounds, says Daniel Green, chief operating officer, Burley Stabilization Corporation. The numbers may end up a little higher by the end of the delivery season, but Green says it will not go higher than 100 million lbs. Either volume would be the smallest burley crop since records have been kept.

The shortfall resulted in part from the substantial cutbacks in plantings last spring (20 percent according to USDA), but late-season rains were the big factor. Some fields were drowned out by these rains, and leaf drop was a problem too. NOTE: Burley deliveries will begin in earnest next week.

Despite yield losses, the quality of this burley crop is decent, says Green, similar to the last two crops. "You could call this crop 'low in volume but acceptable in quality'," he says. "But much of the leaf is thin. There isn't a lot of the good-bodied redder styles that buyers are looking for."

Considering the circumstances, the sales season at Big M Warehouse in Wilson, N.C. (all flue-cured), went fairly well, says owner Mann Mullen. "We sold some tobacco for more than $2 a pound," he says. "But the practical top was probably more like $1.88." One big surprise: Some scrap tobacco sold for $.35 to $.75 a pound. And those prices held toward the end, when leaf prices fell off," he says. That was one of several indications that the market has changed its preferences, but Mann can't figure out what the changes are. "What is quality in flue-cured? I used to know but I don't know any more," he says. Mann is very apprehensive about next season, but for whatever it is worth, all tobacco offered at his warehouse found a buyer. There will be one more sale on November 28.

AOI's Farmville (N.C.) plant will no longer process leaf. Alliance One is moving all its U.S. tobacco processing to its Wilson, N.C., facility. AOI's processing operations in Farmville, N.C., will be relocated (tentatively) by the beginning of the 2019 season. Some processing jobs will shift from Farmville to Wilson, and the  Farmville facility will be "repurposed" for storage and special projects. But a workforce reduction in Farmville is nevertheless expected. "Consolidating our U.S. tobacco processing operations in Wilson is designed to maximize efficiency and allows us to continue to competitively deliver value-added products and services to our customers," said Pieter Sikkel, c.e.o. of AOI's parent cor-poration Pyxus International. The move was caused in part by new and increased tariffs on U.S. tobacco, declining export demand and the strong U.S. dollar, a statement by the company said.

 

Sign of the times: The American Tobacco Factory in Reidsville, N.C., is about to become vacant. You would remember it if you'd ever seen it; it has an enormous brick smokestack out front with large letters spelling out "Lucky Strike." With initial construction taking place in 1892, it was used to make cigarettes by American Tobacco Company for over 100 years. It was bought and owned briefly by Brown & Williamson, then sold to Commonwealth in 1997, which also used it to make cigarettes. In 2007, Imperial Tobacco, purchased Com-monwealth Brands and the factory along with it, operating it first as Imperial, then as its subsidiary ITG Brands. With its Greensboro factory (which formerly belonged to Lorillard). ITG just doesn't have enough work to keep Reidsville going. Maybe some smaller company will take a chance on it--I am sure it could be acquired at a very reasonable price. 

 

In other leaf news:

Hot market in Malawi: As reported in the last issue of Tobacco Farmer Newsletter. Malawi's burley market (which ended in August) enjoyed much more sales volume than expected. It has now been learned that part of that excess--roughly 30 million pounds--may have been tobacco from growers in the neighboring countries of Mozambique and Tanzania, indicating the strong market in Malawi late in the season.

 

Hurricane spares tobacco in Cuba: Hurricane Michael touched Pinar Del Rio, the western end of Cuba and its leading cigar-producing province. But damage to the tobacco crop--which occurred mainly on October 8--was limited and can be managed, said the president of the leading cigarette manufacturer, Justo Luis Fuentes. In the newspaper La Prensa, Fuentes said, "We have the necessary resources to repair the damaged crops." According to preliminary reports, about 60,000 nurseries were lost, along with some planted hectares and 12 tobacco barns. Fortunately, this was very early in the season not much of the crop was in the field.

Mark your calendar: N.C. Tobacco Day, December 6 8:30 a.m.-12 p.m. Johnston County Extension Center, Smithfield, N.C. Lunch will follow the program.

FLUE-CURED MARKET COMING TO AN END

Selling flue-cured this year got more complicated after Hurricane Florence, but there is reason to think buyers may not have been able to fill their orders from the storm-ravaged crop. In happier times (photo), buyers at the American Tobacco Exchange warehouse in Wilson, N.C., had more to choose from at the sale on August 29. Al Whitfield (middle left) was the auctioneer and Tommy Faulkner (right) led the sale. Auction warehouses are operating this week and next week, maybe longer if there is a demand. Sales volumes are not available yet, but Hurricane Florence definitely lead to a reduction. But the quality loss has been the bigger problem. "We have had so much dark leaf since the storm," says Tommy Faulkner, auction manager at American Tobacco Exchange (ATE) in Wilson, N.C. "This was a difficult crop for everybody." Prices have ranged all across the scale, says Faulkner. "We have sold at 25 cents a pound to $1.85 a pound and every price in between." A meaningful average price will be hard to obtain since Florence arrived just as the leaf tobacco was coming to market. "It is hard o compare the prices of lugs and cutters to the price of leaf." Buyers appear to think this crop will have a use somewhere. They bought ii all. "All the tobacco we offered found a home at some price," Faulkner says. Burley harvest in Kentucky ended in the first two weeks of October. Production was probably reduced 20 to percent by rains in September. But the quality held up, says Bob Pearce, Kentucky Extension tobacco specialist, University of Kentucky. "There has been a little houseburn," he says. "The color looks pretty good." Sanitizing greenhouse trays with steam at 176 degrees has proven very effective as a means of tray sanitation, says Matthew Vann, N.C. Extension tobacco specialist clear. Several self-contained units are available on the market, and information you can use to build  your own units can be obtained from N.C. State. (Check with your county agent.) There is very little benefit to the relatively old-fashioned method of washing with bleach or other chlorine-based ma-terials and, in fact, there is more potential for harm than good, Vann says. "You need to pres-sure-wash trays before steaming to remove plant and media debris," he says. Only a few of the new tray steamers have been acquired by farmers in Kentucky, says Pearce. "But I think growers could get some benefit from using them, he added. There can be no doubt: Tobacco companies are looking for ripe to overripe flue-cured upper-stalk leaf. Lemon style is just not in vogue any more, says Vann. "To produce overripe tips, be sure to fertilize properly, concentrating on applying enough nitrogen. Then, when you think your crop is ready to harvest, give it 10 or 15 more days." We may eventually be selling to a niche market for dead ripe tips, since no one else in the world can produce this type of leaf, he adds. Flue harvest ended in North Carolina before October 15, says Vann. The Eastern Belt was essentially finished by the beginning of thee month and the Old Belt wrapped up right as some of the light frosts arrived a couple weeks back.  Bad news from a major competitor: Burley revenue in Malawi, our strongest competitor for the world burley market, rose 60 percent in this year's marketing season, which ended in August. In addition, reliable reports from dealers in the United States indicate that buyers are searching out and buying uncommitted burley stocks in Malawi wherever they can. A reasonable assumption: The market thinks that U.S. burley can't meet industry needs when it comes to market in a few weeks and that Malawi is the best substitute. Final word on the 2018 crop: The USDA's latest Crop Report--the last that will appear in calendar 2018--confirmed the stunning losses in yield late in the season to the hurricane in North Carolina and extreme rain damage in Kentuc-ky. Flue-cured production in the current crop is projected to total 342 million pounds, the report says, down 26 percent from 2017. Bur-ley tobacco production is expected to total nearly 113 million pounds, down about 30 percent from last year. Following are projections by type, plus projections by state for flue-cured and burley. Flue-cured: North Carolina--252.8 million pounds, down 29.5 percent. Georgia    --22.5 million pounds, down 14.2 percent. South Carolina--20.4 million pounds, 19 percent. Virginia--46.2 million pounds, down 9.2 percent. Burley: Kentucky--90.1 million pounds, down 30.2 percent. Tennessee--10.2 million pounds, down 43.3 percent. Pennsylvania--9.6 million pounds, down 7.2 percent. Virginia--1.7 million pounds, down 22.7 percent. North Carolina--1.36 million pounds, down 5.5 percent. Fire-cured: 57.7 million pounds, down 14.3 percent. Southern Maryland (Pennsylvania): 3.22 million pounds, down 25.4 percent. Dark air-cured: 26.44 million pounds, up 30.1 percent. Pennsylvania Seedleaf: 5.52 million pounds, up 27.7 percent. Total U.S. (all types): 548 million pounds, down 23 percent from 2017. Mark your calendar: N.C. Tobacco Day, December 6, 8:30 a.m. - 12 p.m. Johnston County Extension Center, Smithfield, N.C. Lunch will follow the program. ADVERTISING