The USDA's Commodity Credit Corporation (CCC) has published its final rule announcing changes to the flue-cured tobacco price support differentials effective for the 2002 crop. These changes were proposed in response to the issue involving tobacco cured in barns with direct heat.
The CCC has determined that the price support loan differentials for flue-cured tobacco — cured in barns with direct heat, beginning with the 2002 and subsequent crops — should be adjusted to provide a price support loan rate that is one-half the normal price support rate for tobacco cured in barns with an indirect heat source.
A change in differentials was requested by the Flue-Cured Tobacco Stabilization Cooperative, the producer-owned association through which price support is made available.
With the new differentials, farmers who have barns with direct heat sources still may sell their tobacco for the highest obtainable price. However, the lower price support value will reflect the expected lower market value for the tobacco.