You couldn’t find a better illustration of the uncertainty facing American tobacco growers this year than the dilemma burley grower Scott Travis of Taylorsville, Ky., found himself in this spring.
Speaking at the U.S. Tobacco Forum in Raleigh N.C., he bemoaned the fact he didn’t know how many acres he would plant …at a time of the season when he normally would be nearly finished with planting!
“To be perfectly honest, I am still trying to decide how little or much to grow,” he told Southeast Farm Press. “I would like to raise 25,000 pounds, but that won’t happen. At most I will grow 10,000 pounds this year, and maybe as little as 3,100 pounds.”
That last amount represents the volume he was able to obtain a contract on. Another 7,000 pounds is the most he is willing to take a chance on planting without a contract, and at the time of the forum he wasn’t even sure if he would plant that much.
“We are planting late,” Travis said. “I have set just a little when usually I would be almost done.”
If he gets a crop in, his strategy for marketing will be to fill his contract first, then to aggressively seek opportunities to sell on the open market.
“There are five warehouses in Kentucky, and I might be able to sell some there,” he says.
He may also deliver some tobacco to the U.S. Growers Tobacco Company (USGTC), a new program which accepts excess tobacco from growers, processes it and stores it until (it hopes) prices will improve. USGTC is a corporation owned and operated by the burley cooperative in Lexington, Ky.
“I am glad to have this opportunity,” Travis says. “It looks like a pretty good way to sell your tobacco. But the season will only go well for all of us if the companies need all the leaf that is grown.”
As for managing the rest of his operation, he hopes just to keep his head above water.
“I will maintain my equipment,” he says. “I feel like I need to use what I have. If I were to sell out, it would be at a loss. I have the infrastructure to produce 100,000 pounds.”
The production costs are a tremendous challenge. “The return isn’t going to be good enough this year unless you get a real high yield. We feel our yields need to be around 2,200 pounds or greater.”
Travis has access to enough grain land that he could concentrate on grains this year. “But I still want to raise tobacco. I am not planning on exiting tobacco. But this is the most uncertainty I have ever experienced.”
Another panelist, Craig West of Fremont, N.C., said this crop appeared to fall into three distinct marketing categories: A first tier made up of tobacco that received a contract; a smaller second tier made up of tobacco that received a discounted contract of one sort or another; and a frighteningly large amount that must sell solely on the free market
West was very concerned about the portion of uncontracted flue-cured that is pledged to auction warehouses.
“It appears we have 40 million pounds of flue-cured signed up to sell at auction,” he said. “(Until it sells) that tobacco has essentially no value. How can second-tier or no-price tobacco enable the grower to re-invest in infrastructure?”
He pleaded with the industry to develop some way to stop drastic reduction in contract demand. “We need long-term stability,” he said. “We can’t make investments based on one-year contracts.”
In other developments at the Forum:
• Burley operations are still small. The average burley acreage per grower in 2009 was around 15 acres, according to the Center for Tobacco Grower Research in Knoxville, Tenn. Over half of American burley growers grow seven acres or less, said Jane Howell Starnes, the center’s director.
• Blue mold makes an appearance. The season’s first incidence of blue mold was reported in North Carolina at the end of May, said Mina Mila, North Carolina Extension plant pathologist. A burley/flue-cured grower near Wilson, N.C., found significant lesions in one of his burley fields and one small occurrence in a neighboring flue-cured field. By June 10, the disease had been confirmed in Wilson, Johnston, Pitt, Edgecombe, Nash and Beaufort counties, all of which are in eastern North Carolina.
Plant pathologists were optimistic that spread of the disease would be reduced thanks to weather forecasts for mid-June of hot, dry conditions — which work against blue mold.