Tobacco Farmer Newsletter: Message from the Marketplace VOLUME SHORT, DEMAND HIGH, PRICES STRONG

caption: Buyers are bidding up prices for scarce tobacco at auctions this year. This photo shows a sale from a few years ago at the Old Belt Tobacco Sales warehouse in Rural Hall, N.C. File photo taken by Christopher Bickers.

"Prices [are] as strong as I've ever seen," says one N.C. Warehouseman

Sales of flue-cured tobacco at the four auction warehouses were vigorous in September, and there seems every reason to think this will continue through October.

In the N.C. Eastern Belt market town of Wilson, prices on auction have been very good lately “The prices are as strong as I have ever seen them on auction,” says Tommy Faulkner, auction manager at American Tobacco Exchange in Wilson. “We have mostly Leaf on the floor now and we’re getting $2 to $2.20 to $2.30 for it.” It is clear that this crop just isn't big enough to meet the demand. Why the shortfall? A lot of things happened to this crop, starting with a short supply of plants. “Then, too much adverse weather contributed to making it short crop. But what we are selling now is good tobacco.” Sales on the Wilson market began on August 16, and there have been seven so far. Faulkner thinks American Tobacco Exchange will hold sales on into November.

Also in the N.C. Eastern Belt, Kenneth Kelly, owner of Horizon auction warehouse in Wilson, says all qualities and all stalk positions are selling well. “Even prices for rag tobacco are up substantially,” he says. “Right now, most of what we have to sell is Leaf, but there are still some Lugs and Cutters on offer.” One thing Kelly has noticed is that the very best quality leaf isn’t making it to the auctions this year. “It is being absorbed by the primary companies,” he says...He thinks a November end of sales is possible.

At the single auction warehouse in the N.C. Old Belt, auction deliveries at the Old Belt Tobacco Sales in Rural Hall (near Winston-Salem) are running about three weeks late. Only three sales have been held so far. There is still plenty of potentially good tobacco in the field. “So if the frost holds off, we may well be holding sales till close to Thanksgiving,” says Dennis White, owner of the Old Belt Tobacco Sales. The sales so far have gone very well. “Most of the Leaf we have moved has brought at least $2.30 a pound, and even pickouts have brought $1.35 a pound. What has been brought to this warehouse so far has been good-bodied, good orange leaf, and we are seeing prices close to contract prices.”

HARVEST UPDATE

In Florida and Georgia, harvest is complete and marketing is nearing its end. USDA estimated the Georgia crop at 12.6 million pounds, says J. Michael Moore, Georgia Extension tobacco specialist. Some sources in the trade think it might be up to two million more. But even the higher figure would reflect a relatively low yield. “At this point, 2,000 pounds per acre would appear a realistic yield estimate,” he says. Moore estimates Florida production at 1.5 to 1.75 million pounds.

In South Carolina, harvest was complete a couple weeks ago, says William Hardee, S.C. Extension tobacco specialist. “Everything is out of the barn, and has been selling good.” Overall, this is an above average crop, he says. “The exception might be the small amount that was harmed by Idalia. There were reductions in yield and quality in those areas.”

In Kentucky, harvest is nearly complete, says Bob Pearce, Kentucky Extension tobacco specialist. A handful is still cutting. "We probably have 85 percent or more that has been cut.” Curing is well under way. “We have had many foggy mornings, especially in the low-lying areas, which helps. A few farmers have started stripping. Everything is moving at a good pace.”

In Tennessee, Rob Ellis, Research Center Director at the Highland Rim AREC in Springfield, says his staff finished cutting the fire-cured, dark air-cured and Connecticut tobacco on the station grounds this week. “And it looks like quite a bit of the tobacco out in the county (Robertson) has been cut.: Curing weather has been good,, although there were thunderstorms this week that may have slowed things down. Ellis thinks the local production should be at least average and maybe above…Note: There is only one burley grower left in the county.

How far had the different types progressed as of September 24, according to USDA-NASS?

(Burley/Dark) KY--85% harvested; TN--75% harvested; NC--62% harvested.
(Flue-Cured) VA--90% harvested; NC—73% harvested. SC, GA and FL have completed or substantially completed harvest.