|By TIM THORNBERRY
LAWRENCEBURG, Ky. — As the second post-buyout year for tobacco producers gets underway, many fears have subsided but questions remain as those growers come off a year of drought and black shank in hopes of a kinder growing season.
In 2005, Kentucky saw an estimated decrease in tobacco farms by 43 percent with the lowest total yield of burley tobacco, 136.5 million pounds, since 1927.
University of Kentucky Tobacco Economist Will Snell sees the possibility of a slightly better year, maybe.
“Last year, as anticipated, we had a large number of farmers exiting. Burley acres were down by more than 30 percent which, coupled with a below average yield, resulted in the 2005 burley crop being down by more than 30 percent,” said Snell.
“The 200 million pound U.S. burley crop was much below what the industry needed for both the domestic and export markets. Undoubtedly the companies would like to see more pounds grown this year.”
Earlier in the year, initial price schedules for the coming season indicated little change from last year’s price (($1.55-$1.60 per pound).
“This did not create a lot of excitement for burley farmers to expand,” said Snell. “Consequently on March 1 planting intentions for Kentucky burley farmers were 17 percent lower in 2006. In response to depressed planting intentions, the (tobacco) companies revised their price schedules which resulted in the potential of a 10-15 cent per pound boost in prices for 2006, assuming a good quality crop and if grading practices remain fairly consistent with last year.”
At least one tobacco company, Philip Morris, has offered farmers who increased production by 25 percent more than last year’s 30-cent per pound increase on the additional leaf only. But even with incentives, this year’s production possibilities are still a guess.
Increased costs for fuel, labor and fertilizer coupled with concern over immigration reform not to mention a shortage of plants in some areas has left many farmers still unsure.
Forrest Stevens is a tobacco producer from Anderson County and, along with his father and brothers raises 80,000 pounds of contracted burley. This year Stevens has tried something a little different to help offset fuel and labor expenses.
“We planted about six and a half acres of no-till tobacco this year,” he said. “With the high price of fuel we decided to give it a try. Most people are in the same boat I’m in; we’re growing all we can grow. I’m worried about my 100 percent not an extra 25 percent. If they want me to grow more tobacco they’re going to have to put more money into it to where I can afford to do it.”
R.J. Reynolds’ Spokesman David Howard would not comment on his company’s incentives but he said their contract growers are happy.
“We had a good year last year and are looking for a better year this year,” he said. “We’ve taken on more contract growers and they are very happy with their contracts. While there is no way to speculate on the future, Reynolds is actively trying to get a bigger piece of the pie in the next ten years. If our strategy continues to work, hopefully that will mean good things for our contract growers and future growers.”
That kind of optimism will be needed as problems are already occurring this season. Plant shortages are abundant and now blue mold has been detected in the eastern part of the state. Magoffin County reported the fungus in two locations in young plants, which caused a total loss for the affected farmers.
Anderson Co. Extension Agent Tommy Yankey said he’s worried about finding blue mold so early in the year.
“I’m concerned that we found it this early. We had blue mold a couple of years ago and it created many problems,” he said. “With the shortage of plants, many people will buy out-of-state plants which can bring blue mold with them. Most local plants are of high quality.”
Stevens, who contracts with Philip Morris, said he would probably stay in the tobacco business regardless of what this year brings.
“It’s in my blood, it has to be to fool with it,” he said “I think the price will get better, it has to. We’re getting the same money we got 20 years ago but we’re not paying the same prices for everything that we did 20 years ago. I guess Phillip Morris is looking out for the farmer because they still realize that without the farmer they don’t have anything; they have to have our tobacco.”
This farm news was published in the June 7, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.