Burley Tobacco Growers Might Switch to Grain Production

For the first time in nearly a half century, Chapel Mastin won’t plant burley tobacco on his farm stating that last year’s crop led to a lot of disappointments.

The company that signed a contract with Martin on delivery of 20,000 pounds of burley tobacco accepted only a fourth drought-stressed 2010 crop. He found other buyers for the rest of his tobacco, but some realized a paltry 59 cents to 70 cents a pound that is far below the costs of raising this tobacco.

Burley tobacco plantation

Burley tobacco plantation

The 68 year – old farmer, who credits tobacco money in order to pay off his farm and educate his four children, is not alone in retiring the tobacco business – fighting to cope with all smoking bans and competition.

Farmers in Kentucky and other burley states are preparing to plant fewer acres of burley.

It is not so awful for burley farmers. Philip Morris USA the nation’s largest tobacco manufacturer stated that it is not lowering the number of contracts with burley farmers this year.

But thus year farmers plan to set 94,750 acres of burley, down to 3% from last year, according to the National Agricultural Statistics Service.

For instance in Kentucky, which is the leader in burley production, growers plan to set 67,000 acres of the leaf, down 5,000 acres from last year. An all-time low burley acreage in Kentucky constituted 70,000 in 2005 and 2008.

Burley production has dropped abruptly since the 2004 tobacco buyout, which appeared in a free enterprise system to replace Depression-era price controls and federal production. At present burley is particularly grown under contracts between farmers and tobacco manufacturers. Enterprises can’t refuse tobacco that doesn’t comply with quality specifications.

A Harrison County agricultural extension agent Gary Carter declared that burley production will fall at least 20% this year.

The largest production drop-off is among those farmers who grew burley without contracts. Their speculative ventures backfired last year, when leaf quality was damaged by a dry season that gave tobacco leaves an unpleasant color.

“Burley farmers have to feel sure that they can market the crop before they are going to grow it,” he stated. “And they don’t have any evidence in the market right now.”

Philip Morris USA, mostly known for its popular Marlboro brand, stated that its burley contract volumes won’t drop this year compared with the previous year. And some of its contract farmers are being required to increase production.

Philip Morris International, another leading buyer of Kentucky tobacco, declared that it remains committed to the region, but won’t say if it is contracting for more or less U.S. burley this year.

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