Friday, December 28, 2012

Friday, December 21, 2012



January 11, 2013: 9:30 a.m. At the Tobacco Expo.  Lexington Convention Center. Lexington Ky. Call (859) 221-2465 for information.

January 31, 2013: 5 p.m. Woodford County Extension Office.  Versailles, Ky..  Contact the office at (859) 873-4601 to reserve a spot.

February 1, 2013: 1:30 p.m. Following the East Tn./Southwest VA/Western N.C. Tobacco Expo, Commercial Building #2, Appalachian Fairgrounds, Gray, Tn. Call Paul Denton at 865-974-8839 or the UT Washington County Extension office at 423-753-1680 for more information.

February 4,  5:30 p.m.  Garrard County Extension Office.  Lancaster, Ky..  Contact the office at (859) 792-3026 to reserve a spot.

February 5, 2:30 PM. Following the Tn./Ky. Tobacco Expo, Robertson County Fairgrounds, Springfield, Tn. Call Paul Denton at 865-974-8839 or the Robertson County Extension office at 615-384-7936 for more information.

Thursday, December 6, 2012


Kentucky organic burley farmer strips his crop.
A burley farmer in Brooksville, Ky., strips his crop as the industry debates whether significant expansion is realistic.

Growers enjoyed the best weather and produced their best crop since 2009. Both quality and quantity improved over the weather-stressed crops of 2010 and 2011. The most recent USDA crop report estimates 2012 production to be 494.6 million pounds, up from 344.6 million pounds in 2011. It estimated yield at 2,376 pounds per acre. But Extension and industry sources place the 2012 crop at considerably smaller levels. For example, Universal Leaf Tobacco Company estimated in October that volume will be 450 million pounds.

With very good quality in the U.S. and strong demand for flavor-style flue-cured from any source, 2012 prices reached what may have been record highs. Average price for 2012 could be close to $2 per pound, up from the estimate of $1.68 in 2011. Farmers reported very good grades for their 2012 crop.

Good quality is one of several reasons for higher prices for the 2012 crop. Flavor-style flue-cured is grown mainly in the U.S. and Brazil, though Zimbabwe is re-emerging. Due to poor weather, Brazil and the U.S. had poor to mediocre quality in 2010 and 2011. Consequently, global supplies of premium style flue-cured tobacco are currently low even though overall supplies of flue-cured are up. If this is the only factor in higher prices, and if the 2013 Brazilian crop is of good quality and sufficient quantity, U.S. prices could return to lower levels in 2013. However, tobacco buyers indicate optimism for the flue-cured market beyond the 2012 crop. More than a few buying interests are actively seeking ways to both retain current growers and increase production.

Why the increased demand for U.S. tobacco? There are two plausible reasons. First, increased cigarette production in China, particularly of higher-end cigarettes, may be increasing the amount of flavor-style flue-cured needed in Chinese cigarettes. Second, the global trend toward banning flavorings in cigarettes may increase the amount of flavor-style flue-cured needed in blends to compensate for no flavorings. Also, it may be that Brazil has hit a ceiling on the amount of flavor-style flue-cured it can produce. If so, then increased demand for flavor-style flue-cured will have to be met with increased production in the U.S. and Zimbabwe.

But the outlook is tempered as global cigarette production outside of China continues to decline. The coming year will tell much about how serious buyers are about increasing or retaining U.S. flue-cured production. Curing infrastructure here is aging, and with much uncertainty in the tobacco outlook and strong prices for competing crops, growers have little or no incentive to re-invest in curing capacity. Reinvestment in curing infrastructure likely will require industry involvement in lowering per-unit curing costs and evidence of long term commitments.

The outlook for the U.S. burley has, at least in the very near term, improved considerably with a significant tightening of the world supply/demand balance, because of a large decline in African burley production along with smaller full-flavor crops in Brazil and Argentina. U.S. burley growers are believed to have produced and marketed a larger crop in 2012, and there is potential for expanded acreage in 2013. According to USDA's latest crop report, U.S. burley acreage in 2012 was up 14 percent from 2011. While the drought certainly impacted the 2012 crop, tobacco, being a dry weather crop, fared fairly well. Currently, USDA pegs the 2012 U.S. burley crop at 202 million pounds, 17 percent more than in 2011 and the third largest volume since the buyout. However, labor challenges, along with late crops that were susceptible to frost, may have constrained some growers from harvesting all their available acres.

Global burley production fell 25 percent in 2012, despite the gains in U.S. production, according to Universal Leaf. Very depressed prices for the 2011 crop caused Malawi burley production to plummet nearly 70 percent in 2012, down to around 140 million pounds compared to 450 million pounds plus in 2011. Poor weather conditions led to a fall in Brazil burley production from 245 million pounds to 187 million pounds -- its lowest level since 1998. Argentine burley production for this previous crop year was also down, by 16 percent. So the U.S. leaf market can certainly absorb the expected larger 2012 crop, and probably at an improved price. 

Look for U.S. burley prices to increase from last year's $1.75 per pound average [that's assuming curing conditions are acceptable the rest of the season]. The top quality burley contract grades for the 2012 crop are around $1.90 per pound with #2 quality generally in the low $1.80s. However, contract and auction prices could conceivably end up higher given current market conditions and the expectation that this will probe to be a very good quality crop.

A 20 percent increase in world burley production is forecast in 2013 as production rebounds in Africa and to a lesser extent South America. This is expected to put global burley supplies more in line with needs.

Look for U.S. contract requests to stabilize and perhaps even increase if the eventual size of 2012 marketings is less than anticipated. But will growers respond to this increase? As in 2012, the question becomes given other profitable options, concerns over labor and other regulations, dilapidated infrastructure, and increasing contract demands of the companies. Long-term, the outlook for burley hinges critically on the global regulations on flavorings which are currently a critical ingredient in cigarette blends containing burley tobacco.

Dark growers continue to benefit from growing domestic snuff sales and limited foreign competition. U.S. snuff consumption has been increasing annually since the mid 1980s. Sales were up around four percent in 2011 and up a similar amount in the early part of 2012. On the supply side, dark tobacco acres have been adjusting the past few years in response to an excessive crop produced in 2008. According to USDA's October crop report, U.S. dark fire-cured production is three percent higher than last year, while dark air-cured production is down seven percent. The anticipated crop sizes are close to recent usage levels, indicating that the industry is moving toward ideal supply/ demand balances. Look for dark fire-cured prices to be slightly higher than last year's average of $2.56 per pound for dark fire-cured and $2.28 for dark air-cured. 

Condensed from a recent presentation by Blake Brown, N.C. Extension economist, and Will Snell, Kentucky Extension economist, on U.S. Tobacco Situation and Outlook. 

Do we have enough barn space to cure a bigger crop? Two more curing barn manufacturers have expressed their interest in providing barns for flue-cured growers this year if there is a demand for them:
  • MarCo Mfg. of Bennettsville, S.C., hasn't built bulk barns in quite some time either but company owner Tom Pharr insists it hasn't forgotten how. Call him for more information at 843 479-3377 or see the website at
  • A new company on the American market, Tytun Ltd. of Simcoe, Ontario, in Canada is prepared to make barns to sell here but will need to receive orders soon. Contact Larry Huszczo [pronounced hooz jo], at 519-428-0044. Or see the company website for more information.

GAP meetings begin: GAP training programs start next week, with the first N.C. meeting on December 10 in Snow Hill and the first Georgia program on December 11 in Douglas, and the first South Carolina program on December 12 in Florence. The schedule for N.C. programs appears below. Sponsors request that you call the phone number listed and pre-register at least a week before the program you want to attend. Except for the December 11 meeting in Goldsboro, all N.C. meetings begin at 10 a.m. Registration begins at 9:15 a.m...The first Georgia and S.C. meetings are timed to coincide with U.S. Tobacco Cooperative contracting meetings and will begin right after lunch at the Holiday Inn Express in Douglas, 1636 South Peterson Avenue, on December 11 and at the Pee Dee Research and Extension Center, 2200 Pocket Road, Florence, on December 12...There will be future Georgia and S.C. meetings in connection with events sponsored by R.J. Reynolds, Alliance One and Universal, and possibly with Altria, say J. Michael Moore, Georgia Extension agronomist, and Dewitt Gooden, S.C. Extension agronomist. But the arrangements haven't been finalized. Call Moore at 229-386-3006 and Gooden at 843-206 -4218 for more information. Watch for more GAP meeting details in the next issue of TFN or here.

  • North Carolina GAP meeting dates  
  • 12/10 Elaney Woods Farmers Market, 470 Hwy 13 So., Snow Hill, N.C. Phone: 252-747-5831. Starts at 10 a.m.
  • 12/11 Wayne County Extension Center. 208 Chestnut St., Goldsboro, N.C. Phone: 919-731-1521. Starts at 3 p.m.
  • 12/14 Jones County Civic Center, 832 Hwy 58 So., Trenton, N.C. Phone 252-633-1477. Starts at 10 a.m.
  • 12/17 Forsyth County Agricultural Center, 1450 Fairchild Rd., Winston-Salem N.C. Phone: 336-703-2857. Starts at 10 a.m.
  • 12/20 Cumberland County Agriculture Center. 301 E. Mountain Dr., Fayetteville, N.C.28306. Starts at 10 a.m.
  • 1/3 The Farmers Market of Rocky Mount, 1006 Peachtree St., Rocky Mount, N.C. Phone: 252-459-9810. Starts at 10 a.m.
  • 1/4 Green Hill Club, 252 Club Rd., Louisburg, N.C. Phone: 919-496-3344. Starts at 10 a.m.
  • 1/7 Martin County Farmers Market, 4001 West Main St. Extension, Williamston, N.C. Phone: 252-789-4370. Starts   at 10 a.m.
  • 1/8 Johnston County Agricultural Center, 2736 N.C. 210 Highway, Smithfield, N.C. Phone: 919-989-5380. Starts at 10 a.m.
  • 1/9 Pitt County Agricultural Center, 403 Government Circle, Greenville, N.C. Phone: 252-902-1709. Starts at 10 a.m.
  • 1/10 Wilson County Agricultural Center, 1806 Goldsboro St., Wilson, N.C. Phone: 252-237-0111. Starts at 10 a.m.
  • 1/17 Caswell County Civic Center, 536 Main St E., Yanceyville, N.C. Phone: 336-694-4158. Starts at 10 a.m.
  • 1/18 Lois G. Britt Agricultural Center, 165 Agriculture Dr., Kenansville, N.C. Phone: 910-296-2143. Starts at 10 a.m.

Virginia GAP Meeting Dates

  •  February 5, 10:00 a.m. Scottsburg VA. Scottsburg Volunteer Fire Department. Contact: Halifax County Extension Office at 434-476-2147 or Stephen Barts (




The Voice of Agriculture®

North Carolina Farm Bureau Voice of Agriculture