Since tobacco was deregulated in 2004, the question everyone in the industry has been asking has been how many farmers would drop out of leaf production altogether?
But Jeremy Rhodes of Four Oaks, N.C., has gone against the trend: He didn’t begin growing tobacco until 2005, the year after the price support program ended.
So while most tobacco farmers today have the experience of several generations of family members to draw on, and often some of their capital assets, Rhodes started out as a first-time tobacco farmer with no family history in the crop.
“I had a little experience myself working for neighbors and relatives who had tobacco, but never as an owner and never from a management position,” says Rhodes, who has run a logging business for a number of years. “My father-in-law is a tobacco grower and I was able to obtain advice from him.
But basically, he was out there learning on the job. It was a scary proposition, but at the time, the price of tobacco was appealing compared to other crops. “So I decided I wanted to give tobacco a try,” Rhodes says.
Now, five seasons later, what advice would he give to a potential new grower?
“I would tell him to do all the planning and research he can,” he says. “One thing about tobacco is that there are a lot of hidden costs you can’t always account for. You need a right large margin to cover those higher costs.”
The big ones recently have been energy and fertilizer prices.
But the biggest challenge started immediately after he decided to grow tobacco: Amassing the amount of machinery needed to produce flue-cured leaf.
“Since I was new to tobacco, everything has been a new investment,” he says.
The timing of his entry did provide one advantage: Because of the industry turmoil, there was and has continued to be plenty of used equipment on the market. Just this past July, Rhodes was able to buy eight rack barns at a reasonable price, and like everything else he’s purchased, the barns came from local farmers.
His goal has been to keep capital investments as low as possible in hopes of shortening the payback period, he says. “At the prices that newer barns are selling for now, it would be very hard for me to cash flow them over any reasonable length of time.”
One thing he hasn’t had to spend a lot of money on is disease control.
“I had a little land that was new to tobacco,” he says. “Most of it had been in tobacco in the past. But it had all been rotated.”
He has developed a three-year rotation of tobacco for himself. “I like to follow sweet potatoes with tobacco. I put a lot of potash to sweet potatoes, and the tobacco may be able to use any that is left over,” he says.
He rents his land to a soybean grower for the third year of the rotation.
Rhodes has been able to avoid any serious disease problems by planting on relatively fresh tobacco land, holding to a three-year rotation, and using disease-resistant varieties — Speight 220 and Speight 168.
He grows all 70 of his tobacco acres under the PRC (Purity Residue Clean) program.
Rhodes used the new organic-certified suckercide OTAC this season and got good results. “It cost a little more, but we got a price incentive from Santa Fe to use it,” he says.
It performed as well as any of the conventional contact chemicals he has used.
He sprayed OTAC five times after topping twice and hand-suckering three times. He skips every ninth row and sprays four rows on each side with a boom-type sprayer.
He is hoping for a yield of 2,500 pounds per acre. “I have had 3,000-plus pound per acre yields using this program,” he says.
He contracted this crop with Santa Fe through United Tobacco Co. of Wilson, N.C.
He doesn’t expect any expansion in his tobacco operation next year except perhaps in plant production. “I might add another greenhouse,” he says. “I can produce all I need now. But I have had requests from other people who would like to get plants from me.”
W.K. “Bill” Collins, a longtime Extension tobacco specialist, says Rhodes has good prospects for success because he has capitalized on the current conditions.
• He has taken active steps to keep his land relatively disease-free. “With his good rotation, he is less likely to be confronted with the soilborne diseases that you get in a short rotation,” says the agronomist. “You don’t want to have to fumigate in this day and age. It can add 10 cents a pound to your costs.”
• He is taking advantage of the premium available for PRC tobacco. “He is trying to meet a demand,” Collins says. “Frequently, when farmers have gotten out of tobacco in recent years, it was because they could not produce something that the market demands.”
• He is also taking advantage of the availability of good used equipment. “That’s an advantage tobacco farmers haven’t often had,” Collins says. “It is like buying cars — there are plenty of used ones around right now.”