MESSAGE FROM THE MARKET: THERE'S NOT ENOUGH BURLEY TO GO AROUND

 

Prices were way up at the first burley auctions of the year at Farmers Tobacco Warehouse in Danville, Ky. Among those cheered was owner Jerry Rankin (above). File photo by Chris Bickers. The market opens hot for 2020 burley. Farmers Tobacco Warehouse in Danville, Ky., has held the first two auctions of the season, on November 24 and December 1, and the results were very good at both. Some lots of red tobacco sold at a high price of $1.90 per pound, much higher than last year. About 30 percent of the offerings sold for a strong $1.80 to $1.85. The reason for the high price is simple—buyers need burley, and there will not be enough to go around. “There is going to be a demand for this crop, and buyers aren't going to get near what they need,” says Jerry Rankin, owner of Farmers. He thinks that burley production in this country will fall between 42 and 45 million pounds, much less than what USDA projected in its report in October, the last of the season. If his assessment is anywhere near the actual total, you can expect intense buyer interest right up to the end of the market. The sales results might have been better still if all of it had been “new tobacco,” says Rankin. “As it was, 25 to 30 percent of the offerings were carryover which sold for $1.50 to $1.70.” Many parts of the burley belt suffered low yields because of weather, but Rankin thinks one of the big factors in the small production was that many farmers decided not to plant last spring even though they might well have had the opportunity to contract if they had pursued it. Others planted way short of what they needed to make their contracts. But there were some new growers. A small but nevertheless significant portion of the farmers at the Danville sales were Amish growers from Pennsylvania, Wisconsin and western Kentucky. “A few had never grown burley before this season,” Rankin says. Another burley auction was delayed: Big Burley Warehouse in Lexington, Ky., was scheduled to open November 24 also but that was delayed till probably December 9, says owner Darby Montgomery. “We haven’t had enough tobacco to conduct a sale,” he says. “Stripping is running behind in this area.” For further information on either burley warehouse, call Rankin at PH 859 319 1400 or Montgomery at PH 859 233 9944). Flue-cured auctions came to an end Tuesday with a cleanup sale in Rural Hall, N.C. Dennis White, owner of Old Belt Tobacco warehouse, reported that he was well pleased with the season. “Though the tonnage was short, the prices were a lot better than last year,” he says. “In many cases, prices were within 10 cents of contract.” For the season, White estimates that leaf at his warehouse averaged $1.85 for B2s, $1.60 to $1.65 for C2s and around $1.30 for X2s. He sold six and one half million pounds from beginning to end. The big surprise, says White, was the drastically increased price for cut rag, which he said averaged between 65 and 85 cents. "Evidently there is a shortage," he says. A small amount of burley was brought to the Rural Hall warehouse, and despite the fact that it was in small bales that are not preferred by manufacturers, all of it found a buyer, most of it at $1.65 a pound. Most came from a single Virginia farmer, White says. The China comeback? White saw evidence that Chinese buyers are planning to return to the U.S. market: Every time he had some lemon leaf (the style traditionally associated with Chinese demand), his regular buyers would compete vigorously for it. “Now who else but the Chinese would they be buying this for?” Another tobacco warrior moves on: Bill Maksymowicz, the longtime agronomist at Burley Stabilization Corporation died last week. Before he joined the BSC staff, he worked for several years with Vector Corporation and before that, he served on the faculty of the University of Kentucky for 13 years. I believe much of that time was spent on the staff of the Princeton Research Station; anyway, somewhere in there he shared with me substantially all I know now about dark tobacco, which has often proved very valuable for me. I know it's a cliche, but he will be missed. Funeral services will be held December 4 at 3 PM at the Robertson County Funeral Home in Springfield. REPORT FROM OVERSEAS Canada--The earliest frost in southern Ontario since 1982 took place on September 19, says Mitchell Richmond, team leader for the Canadian Tobacco Research Foundation. “Almost all tobacco left in the field at that point was lost, with the exception of some localized areas where farmers were able to keep harvesting,” he says. But overall, everything that was harvested was on par for yield and quality, he says. ****