The federal government will allow Georgia farmers to grow more tobacco in 2002. But that doesn't mean they will, say University of Georgia experts.
The U.S. Department of Agriculture has set the national basic quota for this year at 582 million pounds, about 33 million pounds more than in 2001.
“It looks as though we'll have a 6-percent increase in the basic quota that can be produced in Georgia,” says J. Michael Moore, University of Georgia Extension tobacco specialist.
But there won't be 6 percent more acres of tobacco growth or sold in Georgia this year, he adds. The basic quota is only the starting point.
Last year, growers sold 3 percent more than the 2001 quota. “That 3 percent comes off this year,” says Moore. So, theoretically, this year's increase actually will be 3 percent.
But this still is misleading. Growers have “quite a bit” of 2001 tobacco that hasn't been sold yet, says Moore.
“Because of over-selling in 2001 and the tobacco left on farms, there's a good chance the 2002 crop actually will be less than in 2001,” says the agronomist.
Georgia growers are expected to plant between 26,000 and 27,000 acres of tobacco this year. Although tobacco is grown on only a small portion of Georgia's 10 million acres of farmland, it's still a profitable crop, says Bill Givan, University of Georgia Extension economist.
In terms of its farm-gate value, it's the state's third leading field crop, bringing in $120 million in 2000. The average price support for the 2002 crop will be $1.656 per pound, or four cents per pound less than last year.
However, growers should get the same amount of return for their crop this year, says Givan. Production costs should be slightly less in 2002, making the net return on investment about the same as last year.
U.S.D.A. calculates the tobacco quota by adding cigarette makers' buying intentions to the three-year tobacco export average, then subtracting the leaf held by the Tobacco Cooperative Stabilization Corporation.
Stabilization directs the price support program for tobacco under a contractual agreement with U.S.D.A.