S.C. tobacco market making gains
Aug 31, 2007—The opening of South Carolina tobacco markets earlier this month marked the third sale cycle since Congress approved a $10.1 billion tobacco buyout in October 2004 and ended the tobacco marketing quota system that started in the 1920s.
Columbia’s The State newspaper reported that while there has been growth in the coastal region of North Carolina, the decline of flue-cured tobacco acreage is being recorded in the Piedmont areas of South Carolina, as well as in Virginia and Georgia, said Blake Brown, an agriculture and resource economics professor at North Carolina State University.
South Carolina’s tobacco acreage has remained steady, he said.
“Production has not increased overall as much as we anticipated,” Brown said. “The price declined after the tobacco buyout, and we have seen it come up some since 2005. But if the companies want to buy United States-grown tobacco, they’re going to have to pay more for it because of the fuel cost, labor cost and fertilizer cost increasing.”
With the lack of price supports, increased production costs and the uncertainty of contracts, many tobacco growers left the tradition behind for more profitable crops and ventures. But for those who have remained growers, prices have held steady this year, experts said.
Since 2005, the price per pound average was about $1.45, with lower-priced contracts with manufacturers at about $1.34 per pound, Brown previously said.
“We’ve seen the exit of older farmers, and we’ve seen more consolidation of farms because the profit margin is just no longer there for tobacco farmers to stay viable. They are having to be creative and very innovative, but no matter how creative or innovative, you’re at the mercy of the elements,” said Arnold Hamm with the Flue-Cured Tobacco Cooperative. “I expect to see a further consolidation of tobacco farms, and I expect to see a decline in domestic consumption of tobacco products in the United States.”
Aug 31, 2007—The opening of South Carolina tobacco markets earlier this month marked the third sale cycle since Congress approved a $10.1 billion tobacco buyout in October 2004 and ended the tobacco marketing quota system that started in the 1920s.
Columbia’s The State newspaper reported that while there has been growth in the coastal region of North Carolina, the decline of flue-cured tobacco acreage is being recorded in the Piedmont areas of South Carolina, as well as in Virginia and Georgia, said Blake Brown, an agriculture and resource economics professor at North Carolina State University.
South Carolina’s tobacco acreage has remained steady, he said.
“Production has not increased overall as much as we anticipated,” Brown said. “The price declined after the tobacco buyout, and we have seen it come up some since 2005. But if the companies want to buy United States-grown tobacco, they’re going to have to pay more for it because of the fuel cost, labor cost and fertilizer cost increasing.”
With the lack of price supports, increased production costs and the uncertainty of contracts, many tobacco growers left the tradition behind for more profitable crops and ventures. But for those who have remained growers, prices have held steady this year, experts said.
Since 2005, the price per pound average was about $1.45, with lower-priced contracts with manufacturers at about $1.34 per pound, Brown previously said.
“We’ve seen the exit of older farmers, and we’ve seen more consolidation of farms because the profit margin is just no longer there for tobacco farmers to stay viable. They are having to be creative and very innovative, but no matter how creative or innovative, you’re at the mercy of the elements,” said Arnold Hamm with the Flue-Cured Tobacco Cooperative. “I expect to see a further consolidation of tobacco farms, and I expect to see a decline in domestic consumption of tobacco products in the United States.”
