The hot question at winter grower meetings: IS OPTIMISM JUSTIFIED FOR 2025? The 2024 crop set an unenviable record, said Matt Grissom, president of the Tobacco Growers Association of N.C. at the association’s annual meeting in February. “It was the most expensive we have ever grown. And input costs continue to rise, led of course by the steady increase of the AERW for the H2A workforce, followed by fertilizer fuel and interest on operating capital... New varieties could help. The farmers who do well in the next few years are going to be the ones who find ways to increase yields, said Grissom. “We have pressed hard for the past decade to encourage research that demonstrates meaningful improvements to our plant varieties,” he said. “It is encouraging to see several recently introduced varieties that show gains in this area.” Other challenges: But that is not going to be enough,” Grissom said. We still need help in situations such as:” · o--Target spot that can wreck yields by as much as 400 pounds per acre. · o--Extended harvesting where the crop is left in the field longer so that it is overripe at harvest.” · 0--Chemistry as purchasers are shifting attention to things in the leaf that farmers we can’t see. A last look at last season N.C. marketed 208 million pounds of very high quality flue-cured tobacco in 2024. Beltwide, the crop was approximately 235 million pounds,” (calculated using the grower checkoff assessment as the standard mea-surement). The aggregate figure is about 100 million pounds short of the expected planted potential. Weather was the main reason for the shortfall in production. Hurricane Debby made landfall in August and was unique in that it impacted every acre of tobacco along the eastern seaboard from Florida to Pennsylvania. Supply tight, demand strong: The shortfall in the U.S. followed major reductions in origins such as Brazil and Zimbabwe, our two leading competitors for the world flue-cured market. The result: A tight supply and strong demand in the market. It’s expected to take multiple seasons worldwide to replenish stocks, said Grissom. Which way 2025 production? This season is shaping up to be a crop that potentially shows some slight increase in demand, said speakers at the TGANC annual meeting. Unfortunately, projections of domestic consumption continue to indicate decline. We witnessed contract reductions from some large domestic manufacturers. But export opportunities may increase in response to short global supplies. “Hopefully, this will be enough to offset domestic reduction,” said Grissom. “We predict a 2025 crop size that will hold flat in terms of planted acres.” Price can't be overlooked. Grissom pledged that TGANC will continue to communicate to buyers the importance of increased prices. “If we are expected to grow less tobacco, then it must provide increased returns.” The guiding principle of all business is net margins, and growers are losing confidence in (their) long term sustainability. I know purchasers grow tired of our persistent advocacy to increase prices,” he said. “But we are in an industry crisis and the only action that will save us is to restore profitability.” View from Kentucky: A delegation from the Burley and Dark Tobacco Growers of Kentucky and Tennessee attended the TGANC meeting. Al Pedigo of Scottsville, Ky., the president of the association, said it was encouraging to see the opportunity for the two groups to cooperate. "We are finding common ground to devote our efforts to," he said after the N.C. meeting. "Together we can carry more influence among political leaders.” BDTGA had just held its third meeting in January. The worst problem: : Without a doubt, adverse effect wage rates will be an urgent topic for discussion in Washington and in state capitals, says Pedigo, who is afraid that even with a good crop, tobacco farmers in Kentucky may be hard pressed to turn a profit after paying such a high labor cost. "AEWRs are the worst problem tobacco farmers have now." Burley contracting starts Burley plantings in the U.S. will be flat in 2025, Pedigo thinks. He notes that contracting for burley has barely started and won't get going in earnest till perhaps the end of the month...It appears that dark contracting will be way down again, he said. Resolution for a freeze: TGANC included wage rate reform as one of its resolutions at the February meeting. “We encourage solutions to streamline the wage rate formula,” said Graham Boyd, TGANC executive director. “It is critical to ensure a sustainable labor force. We support the current agricultural industry’s collective request…to freeze the AEWR at previous levels while a solution is achieved.” Tobacco outlook 2045 Thanks to a modest shortfall in output in most of the major flue-cured producing countries, the outlook is one of cautious optimism going into the season. Flue-cured production was definitely down in 2024, said Jeffrey Dorfman, N.C. Extension Agricultural Economist, in a presentation at the TGANC meeting. Excluding China, it was down 4% in 2024, he said. Zimbabwe had drought that hurt its harvest, but production is expected to rebound in 2025. Brazil reportedly has a big crop in the ground now. Nevertheless, there is a world shortage right now, and N.C. tobacco farmers should have good pricing power in 2025. “We could see prices of $2.30 to $2.50 per pound,” Dorfman said. Contract early But the consensus at the association meeting was that farmers should make contract arrangements early, since if there is any price swing later in the contracting season, it could be expected to be downward. And you can learn about export programs for flue-cured at Tobacco Associates’ Annual meeting, on March 6, at the Wilson County Agricultural Center, 1806 S. Goldsboro, Wilson N.C., from 10 to 12 a.m. EST. The program will feature speakers well informed on the leaf situation, including Ivan Genov, Manager Tobacco Industry Analysis for the International Tobacco Growers Association, who will give an overview of the global market. Admission is free. Lunch follows Please call 919-821-7670 or email tar@tobacco associatesinc.org to reserve a seat.c="https://blogger.googleusercontent.com/