U.S. flue-cured tobacco growers will have a 6 percent increase in quota for the 2002 season, but won't have to increase acreage substantially to meet that mark, says a North Carolina State University Extension economist.
That's due in part to a “substantial” carryover from the 2001 season, says Blake Brown, North Carolina State University Extension ag economist. “There's quite a bit of carryover out there.
“The quota increase is good news for farmers and a positive sign,” Brown says. “Hopefully, the quota increase will mean that farmers don't have to increase acreage because of the carryover.”
Industry observers had anticipated a quota increase between 3 percent and 6 percent for 2002.
The national marketing quota for the 2002 crop is 582 million pounds, up from 548.9 million pounds last year. The national acreage allotment is 278,736 acres, a little more than a 6 percent jump from last year's 262,253 acres.
The no-net-cost assessment for 2002 is five cents per pound — split equally among growers and purchasers.
The quota is based on a formula that considers purchase intentions of domestic cigarette makers, the three-year average of un-manufactured exports and reserve stock adjustments. The formula also gives the secretary of agriculture a 3 percent discretionary adjustment.
Earlier in December, cigarette makers said they intended to purchase 310 million pounds of flue-cured tobacco for 2002. Un-manufactured exports from 1998-2001 were 249.9 million pounds. The reserve stock adjustment is 22.1 million pounds.
The effective quota is expected to be about 566 million pounds or 3.7 percent above last year.