Expanding on its pilot marketing center concept, the Flue-Cured Tobacco Cooperative Stabilization Corporation plans to operate 14 auction market centers next season, giving farmers an option to direct contracting and hoping to handle nearly 100 million pounds of tobacco. No warehouse charges, auction fees or commissions will be deducted from the sales in 2002 at the Stabilization centers.
Stabilization plans to operate the auction centers in Georgia, South Carolina, North Carolina and Virginia.
The farmer-owned co-op got into the auction business when it saw the traditional system of selling tobacco in danger of going out of business, says Lionel Edwards, Stabilization's general manager. Last season, about 80 percent of the flue-cured tobacco in the United States was sold through direct contracting.
At the pilot marketing centers in Wilson, N.C. and Statesboro, Ga., in 2001, Stabilization handled more than five million pounds of tobacco. Stabilization projects handling at least 90 million pounds at the marketing centers next season.
Marketing centers will operate in Douglas, Ga; Statesboro, Ga.; Lake City, S.C.; Mullins, S.C.; Fairmont, N.C.; Kinston, N.C.; Williamston, N.C.; Wilson, N.C.; Clinton, N.C.; Smithfield, N.C.; Oxford, N.C.; Winston-Salem, N.C.; Danville, Va.; and South Hill, Va.
Stabilization is meeting with farmers at the marketing centers over the winter “what we are trying to do and what we hope to accomplish,” Edwards says.
“The farmers received this idea very well,” Edwards says.
The biggest concern was the commissions and warehouse fees farmers had to pay at the auction centers. At the 14 auction centers in 2001, there will be no warehouse charges, auction fees or commissions deducted from the sale.
The only deductions will be no-net cost assessments, USDA grading fees and any state check-off fees.
“The reason our board decided to get into the auction business was that's the only place you can administer the price support,” Edwards says. “If you don't have a means of administering, you don't have price support.
“We think the farmer needs the option to sell his tobacco at the auction,” Edwards says. “If all the warehouses were put out of business, farmers could be at the mercy of having to take whatever the companies wanted to pay for their crop.”
The objective is to preserve the competitive auctions as a marketing option for farmers, foreign purchasers and domestic manufacturers.
For more information, call Stabilization at 919-821-4560.
Burley marketing center opens
A pilot burley marketing center opened in mid-November in Asheville, N.C.
The marketing center is designed to give North Carolina burley producers an in-state location to sell their tobacco, says Meg Scott Phipps, North Carolina agriculture commissioner.
The Asheville Burley Marketing Center was created with funds from the Phase I Tobacco Trust Fund Commission, which provides economic assistance to tobacco producers. It is administered by the North Carolina Rural Center.
North Carolina grows 7,100 acres of burley tobacco in the counties surrounding Asheville.