What is in this article?:
- Tobacco growers turn to new methods of marketing
- Take it or leave it
• There is a small, but growing trend for tobacco farmers to seek out alternative marketing options when they can't — or don't want — to sell at contract delivery stations.
Take it or leave it
“The grower just shows up with the tobacco he wants to sell, and Tobacco Rag gives him a grade,” said Smith. “He can take it or leave it.”
Tobacco Rag has solicited mostly lower quality tobacco in the past.
“But I understand Tobacco Rag has also bought some higher quality tobacco, even some premium tobacco as well,” said Smith. “Of course to do this, you have to pay in the contract price range.”
The concept has attracted some imitators. This past summer, Whitehall Trading Co. began operating in Seven Springs, N.C. Functioning essentially as a delivery station without contracts, it provides another avenue for tobacco farmers to sell tobacco that doesn't have a home.
"The goal is to give the farmer an alternate method of marketing all grades of tobacco, including the lesser-quality grades," said Mac Grady of Seven Springs, co-owner of Whitehall.
“We didn't get as much tobacco as we hoped, but we did enough business to do this again next year.”
In Kentucky, uncontracted delivery stations are operating in Lebanon and in Cynthiana. Both are operated by International Tobacco Trading Group (ITTG) in association with Golden Leaf Tobacco (a sister company to Bailey's Cigarettes).
But this is a temporary arrangement, said Brian Furnish, owner of ITTG.
“Next year we plan to offer contracts, but this season we are accepting leaf that needs a home, for whatever reason,” Furnish said.
“I will meet you, weigh and grade your tobacco, and if you are satisfied with the price, give you a check.”
The market conditions for burley this year — strong demand developing after the crop was up and growing — would seem to favor the ITTG approach for the moment.
But Furnish insists that he and Bailey's intend to be a factor in Kentucky leaf sales for the foreseeable future.
When an open house was held at the Cynthiana facility, the state's agriculture commissioner — James Comer — attended, and he asked about UTTG's plans. “We told him we are in this for the long haul,” Furnish said.
• Conventional auctions ― The legendary method of marketing tobacco fell into near total disuse in this century, but it has made a bit of a comeback in the last few years in Kentucky, North Carolina and Virginia.
There are at least three burley auctions in Kentucky this year, in Mount Sterling, Lexington and Danville.
Two conventional auctions served flue-cured growers this year. One was in Rural Hall, N.C., north of Winston-Salem, and the other was in Danville, Va.
So there are quite a few more marketing venues this season than growers had immediately after the buyout, and there may be more to come, said Smith.
“And that would not be a bad thing. In the leaf market of today, growers simply can't have too many outlets,” he said.