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• By the time May transplanting season came, the March 31, planting intentions in some areas of the upper Southeast looked significantly different than in early March when the planting intentions survey was conducted.
Made worldwide news
While the brand acquisition made worldwide news, the lesser reported part of the deal may have a much more significant impact on Southeast tobacco growers. Altria gained control of ProfiGen and F.W. Rickard, two leading tobacco seed producers.
What Altria plans to do with the seed companies is not clear, leaving tobacco growers with some concerns over the long-term viability and price structure of tobacco seed.
The USDA Prospective Planting Report, released on March 31, indicates flue-cured tobacco acreage will increase slightly in 2011— from 211,000 to 213,000 acres. Based on the survey, and with an average of the past five-year yields, growers would produce about 475 million pounds.
Since the March 31estimate, the tobacco industry was hit by a new round of tobacco taxes that promise to reduce the market potential worldwide. In the heart of the North Carolina and Virginia production area, a series of tornadoes wrecked greenhouses at about the time growers were getting ready to transplant greenhouse plants to the field.
How much those two factors will influence total tobacco acreage isn’t clear, but it is fairly certain neither is a good thing for tobacco growers. However, reduced acreage may put U.S. growers in a better situation with supply and demand worldwide.
Long after growers had seeded greenhouses, some buyers reduced contract pounds. In January, buyer contracts looked to be up 20-30 million pounds. Now, it appears contracted pounds in 2011 may be down 10-20 million pounds, instead of being up.
Worldwide the news isn’t good either. Brazil’s crop, for example, may top 1.5 billion pounds, more than a 200,000,000 pound increase over projections and over last year’s crop. Quality is the equalizer, as U.S. grown tobacco is expected to have a significant advantage of the poorer quality crop harvested in Brazil.
The weak U.S. dollar is another reason for optimism. Again, compared to Brazil, U.S. growers have a trade advantage with major buying countries because of a more favorable currency value.
In 2010, U.S. flue-cured tobacco harvested acreage was estimated at 211,000 acres, down 13,000 acres from 2009.. Acreage had declined to a low of 174,500 in 2005 before it climbed to 224,000 in 2009.
Estimated 2010 average yield per acre was 2,148 pounds down from 2,346 pounds in 2009.The 2010 U.S. flue-cured crop production estimate was 453.08 million pounds, down 15 percent from 526.4, million pounds in 2009.