Tuesday, May 16, 2000

Tough year for tobacco farmers

Drought, low quota, slow market take toll

By Bruce Schreiner
The Associated Press

        LOUISVILLE, Ky. — Drought, declining quota and depressed markets combined to make it an especially difficult year for tobacco farmers.

        Average burley yields sank to a 16-year low, according to final figures released Monday for the 1999 Kentucky burley crop. Production fell 9 percent, while nearly half the marketed burley went into surplus pools.

        “It was a tough year, a brutal year,” said Patrick Jennings, spokesman for the Kentucky Farm Bureau.

        A 28.9 percent quota cut for the 1999 burley crop was followed by a prolonged dry spell that hampered the leaf's development and curing.

        As a result, final burley production in Kentucky was estimated at 380.1 million pounds, down 9 percent from 416 million pounds in 1998, according to the Kentucky Agricultural Statistics Service.

        Kentucky produced 68 percent of the 1999 leaf in the eight-state burley belt. Total production for the belt, stretching from North Carolina to Missouri, was 555.2 million pounds, down 5 percent, the report said.

        Total value of the Kentucky burley crop was $722.2 million, a 9 percent reduction from the 1998 crop's worth, the report said.

        Harvested acreage in Kentucky, meanwhile, totaled 210,000, down 5,000 acres from 1998. Some farmers didn't even attempt to harvest burley that was badly damaged by the drought.

        Yields averaged 1,810 pounds per acre, down 125 pounds from 1998, the report said. It was the lowest yield in 16 years, which agricultural officials blamed on the dry weather.

        “Not only did we have tough growing conditions, but even tougher curing conditions,” said Scott Althauser, leaf processing supervisor with the Burley Tobacco Growers Cooperative Association in Lexington.

        Much of the tobacco was light in color, which isn't preferred by tobacco manufacturers, and was poor quality, the report said.

        Forty-two percent of the burley marketed in the eight-state burley belt went into surplus pools, compared with 12 percent a year earlier, Mr. Althauser said. The burley goes into the pool when tobacco companies fail to bid a penny a pound above the federal support price.

        The percentage that wound up unclaimed by cigarette manufacturers was slightly higher in Kentucky, the nation's leading burley producer.

        Mr. Althauser said 46.6 percent of the 1999 crop sold at Kentucky auction markets went into the pool. In 1998, just under 13 percent of burley marketed in Kentucky wound up in surplus stocks.

        He said 232 million pounds of 1999 burley went into the pool across the belt, increasing stock supplies to about 417 million pounds.

        “We've got over a full year's supply in stock,” Mr. Althauser said.

        This year, burley farmers are facing a 45 percent quota cut that drastically reduced the amount of tobacco they are setting this spring.

        The quota hinges on three fac tors: how much U.S. cigarette-makers say they plan to purchase, the three-year average of burley exports and how much tobacco is in the surplus pool.

        Co-op officials plan to meet with cigarette manufacturers next month, Mr. Althauser said, to discuss options to reduce the massive surplus.

        Philip Morris representatives have suggested price cuts on burley reserves as a way to offset huge quota cuts. But the burley co-op has resisted that option as ineffective and financially unsound.

        “We have always been trying to do some negotiations with the manufacturers to try to move some of these stocks,” Mr. Althauser said.

        Mr. Jennings said the Farm Bureau hopes the talks produce results.

        “We're hoping the co-op, in the near future, will make a deal with the companies and get rid of this bulging pool stock, and if it happens it will decreased the amount of (quota) cut we get next year,” he said.

        The crop-reporting service said Monday that burley tobacco setting across Kentucky was 16 percent complete as of Sunday, compared with a five-year average of 8 percent.

        Mr. Jennings said the massive quota cut is starting to sink in for farmers as they set fewer tobacco plants this spring.

        “They are really starting to feel the impact now, but the communities that are so tobacco dependent are going to start feeing it this fall,” when the tobacco markets open, he said.


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- Tough year for tobacco farmers
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