Tobacco growers planning for future They are like coiled springs, full of energy and anxious to get on with the business of growing tobacco. The five North Carolina flue-cured winners in the Philip Morris Excellence in Tobacco Production awards and recognition program are of one mind. They are all counting on tobacco for a major portion of their income, now and into the future. But each has his own thoughts about how best to achieve his goals.
Roxboro, N.C., brothers Jimmy and Timmy Thomas have been taking a wait and see approach for the last few months. They have retrofitted eight of their 11 bulk barns and made plans to convert the remaining three. They have also been gathering all the information they can get on contracting opportunities.
"I don't think there's any doubt that we have to retrofit our barns," Jimmy says. "I'm still in favor of the tobacco program and the auction system for marketing tobacco. But the industry is in a transition stage right now and it's hard to know what's going to happen. Some farmers signed the first contract that came along. We decided to wait and see what was going to be available later on.
Get it right We want to make sure we sign the right contract if we sign one at all. We don't want to get tied up in something we can't get out of a year or so down the road. As long as the quota and auction system is in place, we have the option of waiting before we sign a contract."
These brothers still support the tobacco program. They credit the program with keeping the profit in tobacco. But, they also believe some changes are needed. They would like to move the quota into the hands of active growers.
"Over time the quota has become a retirement fund for a lot of people. The high price of quota rental doesn't ad any value to our tobacco. The growers and the companies are going to have to apply pressure to get the changes made," Timmy says.
Goldsboro, N.C., grower William Howell, agrees that a production control and price support program is a key to tobacco profits. He is also in favor of getting the quota into the hands of active growers.
"In some cases we can take 70 cents a pound out of the cost of growing tobacco if we can get rid of quota cost," he notes. "If we can get our price down anywhere near that much, I believe we can sell a lot more tobacco, here and overseas.
Sees a problem "But I don't think we need to get rid of the program. If we don't have production controls, it won't be long before tobacco is no more profitable than corn or soybeans. We wouldn't be able to depend on tobacco income if we ever went to an open market."
While he is in favor of getting quota out of the hands of non-growers, Howell supports some kind of a program to repay quota holders for their investment.
"Growers don't need to expect to get quota or anything else for free," he notes. "Maybe we need to look at some kind of an assessment. With all the expenses the companies are facing, Phase I and Phase II, and the law suits, I don't see how they can keep paying and paying. If they can't make money we can't either."
Wilson, N.C., grower Michael Boyette, decided not to retrofit any of his barns during the 2000 curing season. He wanted to see how the various units performed so he could select the most efficient units for his Powell barns.
"I didn't want to invest any money in heat exchangers until I felt like I knew enough to make a good decision," he says. "When I put in greenhouses, a carousel planter and box loader, I saw a way to get a return on my investment. With these heat exchangers, the only advantage I can see is they say we won't be able to sell our tobacco unless it's cured in barns without direct fired furnaces. I can't see any other reason to install a heat exchanger."
So far, Boyette has elected to stick with the auction system for marketing his tobacco. He is in favor of maintaining the tobacco program. If the current program and marketing system does not continue, he says he too will search for contracting opportunities.
Strong feelings Like many of his peers, Boyette says he is very much against the current tobacco farmer suit against the major tobacco companies.
"There is no way we can go anyplace else and sell our tobacco," he notes. "I think it's probably not wise for us to sue our customers."
Clarkton, N.C., grower Dan Ward is also still investigating heat exchangers and contracts.
"If I am going to be offered a contract by a tobacco company, I want them to tell me which heat exchangers they prefer, if any," Ward says. "I like certain aspects of contracting. I like knowing I have a guaranteed home for my product. That takes part of the worry out of growing tobacco. I like knowing that I'm going to get a specific price for specific grades and qualities and pounds. But, it's the future that concerns me. I don't know what else they are going to want to include in the contracts in the future if we no longer have the option of an auction system."
Ward says he is trying to develop patience and avoid making major decisions too quickly.
"I don't have my head in the sand. I'm listening and I'm trying to learn enough to make the right decisions," he says. "I'm still remembering three years ago when we were told we would not be able to sell any tobacco that was not in bales. The companies were paying a premium of three cents a pound for baled tobacco. This year tobacco sold for the same price in sheets as it did in bales, but it cost us extra to bale the tobacco. I don't want to get in the same situation with heat exchangers or contracts. I want all the details I can get before I make a commitment."
Increasing acreage Kinston, N.C., grower Billy Whaley is actually increasing his tobacco acreage in 2001. He is keeping his eyes and ears open for contracting opportunities, and he is focusing on economically efficient tobacco production.
"I can raise a quality tobacco crop and I harvest by stalk position," he says. "I have converted my barns so I will be curing low nitrosamine tobacco. Now I'm ready to evaluate contracts and grow tobacco."
Whaley sees the multiple lawsuits facing tobacco companies as significant impediments to his goal of making a living growing tobacco.
"These law suits against the companies will have to stop. No matter how much money they make, there comes a time when it runs out. In the end, each one of these suits, including the one being pushed by some tobacco farmers, is going to hurt tobacco farmers.
"I'm sure the way we produce and market tobacco is going to continue to change. It's up to us who want to continue growing tobacco to be willing to adapt and change. That's the best way to prosper, be ready to adapt and change," Whaley says.
The Philip Morris Excellence in Tobacco Production Program is jointly supported by the land grant Extension services and other appropriate agencies and organizations in each of the tobacco producing states.