What is in this article?:
- Tobacco auctions regaining popularity
- Destined for auction
• Auctions have regained a place in marketing of the tobacco crop.
FARMERS Mark Smitherman (second from right) and Hassel Brown (right) were all smiles after the October 29 auction at Rural Hall, N.C. Auction manager Dennis White (far left) was happy about the high prices too. Smitherman and Brown are from Yadkin County, N.C.
The legendary cry of the tobacco auctioneer ― largely silenced since the quota buyout of 2004 ― is beginning to be heard once again in the leaf-producing states.
Auctions have regained a place in marketing of the crop.
That was clear on the last Tuesday in October, when a total of 265,000 pounds of flue-cured and a little burley moved into the trade in an auction held in the Old Belt Tobacco Sales warehouse in Rural Hall, N.C.
The average price was just under $2.02 per pound, very competitive with contract delivery stations. Many of the lots brought $2.20 a pound, also very high, and there were substantially no rejections of bids by farmers.
This was the third year that Old Belt Tobacco Sales has conducted auctions in Rural Hall, 10 miles north of Winston-Salem.
In 2010, the warehouse sold five million pounds, then 2.5 million pounds in 2011, when Hurricane Irene reduced the tobacco available.
“Much of what we sell is contract tobacco that didn't meet company quality standards or crop throw, or in excess of the contract," said White. But he also sells any premium tobacco brought to him, and plenty was brought in 2012.
The first auction this year took place on Aug. 28, and White planned to keep selling as long as there was a need. The great majority of what had been sold through October was flue-cured but some burley had been marketed.
Rural Hall wasn't the only market to have an auction for flue-cured in 2012. In Danville, Va., the Piedmont Warehouse operated a conventional auction this past season.
Jim Eggleston, one of the partners running the auction, said in October that sales this season went very well. “We got prices comparable to contract prices, and some grades brought higher than contract prices,” he says. “There was a lot of demand.”
For Piedmont Warehouse, also, this was the third year of auctions, said Eggleston. “There has definitely been some dissatisfaction with contracting in this area.”
Much of the tobacco at both warehouses was excess production by farmers who because of better-than-expected yields produced more leaf than needed to fulfill a conventional contract.
Still more of it was tobacco that had been contracted, but then either didn't meet the company's quality standard or wasn't valued high enough to satisfy the grower.