ldquoPrices offered for 2015 contracts are moderatehellipbut still arenrsquot badrdquo said North Carolina State University Extension economist Blake Brown

“Prices offered (for 2015 contracts) are moderate…but still aren’t bad,” said North Carolina State University Extension economist Blake Brown.

US tobacco growers learned some things in 2014

The main market factor in the upcoming year for U.S. flue-cured is the fact that the supply shortage of recent years has been alleviated. There may be some reduction in the amount of tobacco contracted for 2015.

The 2014 U.S. tobacco-growing season, which ended emphatically when nearly every tobacco-growing state experienced intense cold the first weekend of November, was characterized by much higher production for flue-cured, a modest increase for burley and a small increase for the dark types.

Whether you accepted the 557 million pound estimate of the U.S. Department of Agriculture or the 525 million, it seemed a certainty that the current flue-cured will be substantially more than last year’s volume.

But this may not have been the best year for it.

Flue prices moderate

At the North Carolina Tobacco Day program in Smithfield, N.C., on Dec. 4, North Carolina State University Extension Economist Blake Brown said, “The 2014 Brazilian crop was better than anticipated, and the 2014 Zimbabwe crop was up 29 percent at 473 million pounds.”

Prices were lower than in 2013 in the United States, he said, as were 2014 Zimbabwe prices. They were down 14 percent at $1.44 per pound.

The main market factor in the upcoming year for U.S. flue-cured is the fact that the supply shortage of recent years has been alleviated. There may be some reduction in the amount of tobacco contracted for 2015. “Prices offered (for contracts) are moderate…but still aren’t bad,” said Brown. “Much still depends on how the current Brazil crop turns out.”

If the October Crop Report estimate is correct, the 2014 crop is the biggest U.S. flue-cured crop since 2001, when U.S. production was 579 million pounds.

With lower U.S. flue-cured production in 2013 than in 2012, exports of unmanufactured flue-cured tobacco declined as well. Exports for the 2013 marketing year were 262.2 million pounds (farm sales weight) down slightly from 269.2 for the 2012 marketing year.

Drastic change for burley

For burley, the supply/demand balance has taken an abrupt turn after being a seller’s market for several years because of tight supply, said Will Snell, University of Kentucky Extension tobacco economist in an October report. “According to Universal’s August 2014 production report, world burley production increased 23 percent in 2013 and an additional 12 percent in 2014, according to Universal Leaf.”

The October 2014 USDA crop report has U.S. burley pegged at 211.5 million pounds, 10 percent above the 2013 crop, with a yield of 2,149 pounds per acre--the highest yield in the post-buyout era. But that yield may not materialize. Labor challenges and unfavorable weather conditions, especially during harvesting the crop, will likely cause acreage harvested and yields to be adjusted downward in the coming months as well as having an adverse impact on leaf quality.”

Will dark acreage expand?

The outlook for U.S. dark tobacco remains very favorable given projected sales for smokeless tobacco products in the United States, said Snell.

Look for dark tobacco prices on this crop to remain relatively strong for quality leaf, said Snell. Higher yields are projected to increase the U.S. dark fire-cured crop to slightly above 50 million pounds and a U.S. dark air-cured crop totaling around 15 million pounds – just slightly above last year’s levels.

Stagnant/declining product sales may cause the industry to reevaluate additional acreage expansion in 2015, he added.

Labor shortage delays harvest

The shortage of labor was without a doubt the main reason that harvest of the Tennessee burley crop ran so late, said Craig Easterly, BSC area manager in east Tennessee, but the inopportune rain certainly didn’t help.

“So far we are getting a good cure in the barn,” said Easterly, at the BSC annual meeting. “But I don’t know what will happen with the tobacco cut in October, and any cut in November, since it is being cured in cold weather. But overall it looks like a good solid useable crop.”

A few weeks later, after the BSC receiving stations had opened, Daniel Green, BSC chief executive officer, reported that some very good quality burley had come in. But overall quality was down from last year.

“The top quality is better than last year, but we are seeing much more variation, even across burley coming from the same growing regions,” he said.

Wet weather followed by cold snaps near the end of the curing season contributed to quality loss, Green said. But it remains to be seen how much of the crop was affected since most of the impact will be on the later tobacco.

In Kentucky, the impact may be worse, one experience observer said. “Very little burley that was produced after the first week of October will be a quality that anyone will want.,” predicted grower and warehouseman Jerry Rankin of Danville, Ky., in mid November.

“Around the first of October we had two weeks when rain fell nearly every day,” he said. “It was too much and the tobacco in the field suffered.”

When the cold snap hit on Nov. 3, a lot of tobacco had been cut and wilting in the field. Hanging in the barn was disrupted. “I saw some farmers (giving up and) pulling out their sticks and leaving the tobacco,” he said.

Lessons learned in 2014

--Despite the wet weather, there were some situations that show that irrigating burley can pay. Grower George Marks of Clarksville, Tenn., remembers that conditions were dry early in the season, and it affected his burley yield. “Where I irrigated, I got a substantial yield increase,” he said. He had recently installed two center pivots. Marks, the president of BSC, told Southeast Farm Press at the BSC meeting that most of his tobacco goes on bottom land close to the Cumberland River. He grows fire-cured as well as burley.

--In North Carolina, burley grower Tim Ware of Belwood, N.C., didn't get excess rain at any time during the growing season. In fact, he had a dry spell after he planted in mid May and is glad now he irrigated twice in that period. “I think the irrigation really helped get it over the hump.” A new burley grower since deregulation, Ware farms right on the line where the North Carolina Piedmont meets the North Carolina mountains.

--The still fairly new burley variety KT 206 has been widely accepted by east Tennessee farmers, said Easterly. It offers excellent resistance to both strains of black shank along with some resistance to blue mold, and it is a high yielder. The related variety KT 212 is also popular, mainly in fields where there is no black shank, he said.

 

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