By TIM THORNBERRY
Kentucky Correspondent

KNOXVILLE, Tenn. — Since tobacco buyout legislation took away an outdated quota system a few years ago, the number of producers and the amount of burley grown in both Tennessee and Kentucky has been declining.

But this year, production in the Volunteer State made a big rebound. In fact, according to the latest USDA information, as of Oct. 1 burley production was forecast to be at 25.4 million pounds, 22 percent above a year ago. The increase is the first in a decade for producers there, with an expected yield of 1,950 pounds per acre, up 350 pounds from 2007.

The acreage however, was unchanged from last year – 13,000 acres. The biggest factor in the increase is likely the difference in weather. Although the last two years have been considered drought-stricken, early rains this year along with milder temperatures put the crop in good shape to thrive through the late summer dry period.

Paul Denton, professor and extension burley tobacco specialist with the University of Tennessee and University of Kentucky, reiterated the fact that weather played the biggest role in higher yields for 2008 and said growers in Tennessee were pleased with this year’s crop.

“The increase in yields is weather related. We just had a much better growing season across the majority of the area this year than we did in 2007, particularly in the upper-middle Tennessee area. Although it wasn’t plentiful rainfall, it was better than last year,” said Denton.

“We’ve had a good year and growers are pretty pleased with the way things have turned out in general. They’re like all other growers in burley, it would be very good if the price was a little higher and the profit margin was somewhat better, but I think most of our producers are pleased with their production this year.”
Denton also thinks final yields may be a little higher than USDA predictions, from what he has seen so far.

“I honestly think the USDA estimate may be a little low. We did have crops from some farms that were badly drought-stricken, but I still think we will exceed 2,000 pounds when it’s all said and done,” he said.

While Tennessee growers are enjoying larger yields, Kentucky will likely see another fall in production – unrelated to the weather and more from the fact that Bluegrass growers planted less burley last year, a trend that has continued since the buyout. This year’s projected production is 144.9 million pounds, a 6 percent decline from last year.

While the old quota system did provide a price support structure that guaranteed producers at least a certain amount for their tobacco, the buyout did away with quotas, as well as those price supports. Since then, farmers have seen a fall in prices. Factor in increased production cost, and many took the buyout funds and left the business.

Those growing burley tobacco today have the right to raise as much as they want and most sell under contract to tobacco companies even though the warehouse auction system of selling still exists in some areas.

With the decline in burley production has come an increase in the amount of dark tobacco produced in both states since the buyout, mostly due to better prices. Tennessee’s National Agricultural Statistics Service field office reported dark-fired tobacco yields are forecast at 3,200 pounds per acre, while dark air-cured is forecast to yield 2,800, both well above 2007.

Denton said the increase has been sizable in both states even since last year. “We had a very large increase in both states this year, particularly in dark air-cured. Combined with increased acreage and yields, we have a big supply,” he said.

He added that over the long term he sees dark tobacco production increasing, although in the short term he thinks dark tobacco acreage for next year may decrease because of the crop size this year.

The future production of burley will no doubt depend on the price. Denton said that at least one major tobacco company will be coming out with contracts by the end of the year. If farmers see a price in the $1.90-$2 per pound price range, acreage could go up next year, but it if stays at or near this year’s projected price of the low $1.80s, “we’ll be fortunate to hold steady,” he said.