Seth Howard's steps are largely ordered by the footprints of the tradition to “do things right.” These days, doing things right means, as it always has, growing quality crops, while looking for ways to diversify.

Howard, 28, farms with his father, Stuart, and neighbor, George Davis, in Onslow County, N.C. on the same land that his great-great grandfather purchased in 1910. His grandfather, Cecil, lives on the homestead.

Tobacco is the top crop among the 2,300 acres of corn, soybeans and wheat. In an effort to diversify, they'll add peanuts to the mix this spring.

A tobacco buyout is heavy on his mind. He believes it has to happen in order to return U.S. producers to a competitive world market. He says that means producing what tobacco companies want.

From what he's learned, tobacco operates in a world market. “Every time we lose production, countries like Brazil pick that up,” Howard says.

He recounts declining consumption and an increase in consumer prices because of the master settlement, but notes “there's still a market for quality U.S.-grown tobacco.”

The United States hasn't led in tobacco production for a long while. “We could recapture some of that market with a buyout,” Howard says.

And so, the 28-year-old arrives at the crux of the situation on the farm. “If you pay 40 cents to 50 cents to lease a pound of quota and can grow tobacco for $1 $1.10 a pound, you have to average $1.50 to $1.60 just to break even and breaking even isn't what you want to do,” Howard says.

He believes a buyout is necessary “because without the quota system, the main system cost would be gone. I hope they come through with a buyout … but it's never been in our hands. These other companies need to get in line with Philip Morris and get this done. Where Philip Morris goes, so goes the market.

“Take that 50 cents away and we could compete again, I believe,” Howard says.

He believes it boils down to growing what the cigarette manufacturers want. They grow for Philip Morris.

“Philip Morris wants good quality, but when Brazil is getting better all the time and PM can pay considerably less for their tobacco, why should they buy our tobacco? Howards asks rhetorically.

Tempering his comments and choosing words carefully, Howard says the problem came about because “farmers got paid no matter what they took to the auction.

“I don't like to hear the talk that it's farmers against tobacco companies — that sure isn't the way to go,” Howard says. “The only outlet is a tobacco company. We can't eat it. I want to supply Philip Morris with the type of tobacco they want.”

That's required the Howards to harvest more tips in their contract with Philip Morris.

The Howards continue to harvest by hand, saying that the decision has been an economic one. “We couldn't step out and invest in all brand new barns and mechanical harvester because we were so uncertain.”

They have stepped out into a new crop for the area. They'll plant peanuts on the farm for the first time this spring.

“We've never really looked at peanuts until this winter,” Howard says. “We saw how it could tie in with what we're currently doing with our corn acreage. We saw it as way to diversify without having to go to a livestock or a poultry operation.”

The Howards traveled to northeast North Carolina and southeastern Virginia to buy a planter and a picker. Peanut acreage in the two areas has shifted to southeastern North Carolina.

They plan on inoculating their land this spring before planting about 50 acres of peanuts. “We haven't had good soybean yields in several years, so we're starting small on some of the land we used to plant soybeans on,” Howard says.

They've signed a contract for $500 per ton with the Golden Peanut Company.

This season may prove crucial for a tobacco buyout. Howard continues to look at ways to improve quality and production. The farm will try peanuts on a small scale this season, looking to diversify.

“If I'm doing something wrong, I want to learn how to do it correctly,” Howard says.

e-mail: cyancy@primediabusiness.com