By TIM THORNBERRY
Kentucky Correspondent

GEORGETOWN, Ky. — With the Christmas break over, tobacco farmers are getting back to the business of selling the 2010 crop, something that wasn’t going so well before the holidays.

While some growers were offered low prices for a crop mostly discolored by a bad curing season, some crops were completely rejected.

Roger Quarles, president of the Burley Tobacco Growers Cooperative Assoc. (BTGCA) said he has heard of tobacco being rejected at one buying station only to be accepted at another, a situation that is leaving many producers confused especially when it comes to planting intentions for the 2011 crop.
“Obviously without questions there was a lot of tobacco rejected especially before Christmas. Then you hear that the same units (bales of tobacco) that were rejected were acceptable at other stations. It was of great help for somebody to have two or more contracts,” he said. “Since (buying stations) opened after Christmas we’re not hearing quite so many stories about rejections. In fact some of these people are returning to these same units.”

Quarles added that in many of these cases the tobacco is selling without a problem thus causing variability in the market he has not seen in his lifetime.
Farmers do have the option of auction markets, something that all but came to an end during the first year of the federal tobacco quota buyout in 2004. But many auction markets have survived albeit the variability is being seen there as well.

Quarles said the price growers are getting depends on the region in which that market is located.

Curing conditions, while mostly bad throughout the state, varied from area to area. Some of the lower paying markets have seen prices range from perhaps $1.30 or $1.40 per pound down to as little as 80 cents or less he said. “We are entering into the last half of the market and there are some reports that the color may have improved since the Christmas break on tobacco that is still hanging in barns.”

While the 2010 tobacco crop is bouncing around from buying station to buying station to auction markets, little of it is heading to the Burley Co-op’s facility at this point. Quarles said the association, which sends most of its tobacco oversees, is being cautious at the moment when it comes to taking rejected tobacco.

“We really didn’t know how to approach this crop. There is a great fear that it has been tagged, worldwide, a bad quality crop,” he said. “We’ve taken a very cautious approach to this.

Quarles added that the Co-op still has unsold inventory from last year and the previous year doesn’t expect their purchases to be as large as they have been in the past.

“We just can’t load up on a crop that may be a bit hard to merchandise on the world market,” he said. “I know that is not immediately helpful to growers, but we need to be here next year and the following year and the year after that. We don’t have an income stream that would allow us to purposely buy and sell tobacco at a discount.”

Quarles is familiar with that world market serving as president of the International Tobacco Growers Assoc. He said the year was shaping up to be tough anyway after coming off a good previous year that saw strong auction prices.

“We had farmers that had either lost a contract or had a reduction in their contracted pounds, but they went on and put out the same amount of tobacco in May. But who would had ever thought we would come up against a curing season like we did,” he said.

With more pounds grown than contracted, Quarles pointed out that growers were already facing low auction prices even if it had been a good curing year.
“It was a perfect storm of things that came together and ended up in a dismal situation as far as marketing non-contracted or rejected pounds,” he said.
Quarles also said that eventually all of this year’s crop will find a home at a price; it just may not be at a price in which producers can make a profit.