Wednesday, November 12, 2008

Tenn. tobacco is on pace for 'excellent' year

Burley tobacco farmers have grown accustomed to seeing production decline in recent years, as high costs and few profits pushed many growers away.

But recent federal yield numbers predict a good year for burley, which once ranked among the Volunteer State's most profitable crops.


The burley tobacco produced by Tennessee farmers this year is expected to outperform last year's crop by 22 percent, according to the U.S. Department of Agriculture. If that prediction holds true, it will mark the first time the production of burley — most commonly used in cigarettes — has shown a year-over-year increase since 1999.

"It looks like our yield is going to be excellent," said Jonathan Gray, who farms about 5½ acres of burley tobacco in northern Sumner County. Like many tobacco farmers, Gray has cut his tobacco production because of falling profit margins — he raises about half as much now as he did four years ago.

Over the short run, state Agriculture Commissioner Ken Givens said, this year's improved production coupled with other market factors could give Tennessee's sagging tobacco industry a shot in the arm.

But 2008's yields probably don't signal a return to prominence for tobacco. The percentage gains likely this year must be tempered by the fact that last year's drought pushed 2007 crop production down even more.

Tennessee is expected to produce 25.4 million pounds of burley this year. This fall's yield numbers don't reflect an increase in the actual acreage of tobacco harvested. That number, about 13,000 acres, is unchanged from 2007.

The USDA's statistics do show a better crop — the average acre is expected to produce about 1,950 pounds of burley tobacco, up 350 pounds from 2007. Other types of tobacco also are expected to outperform last year's crop.

"You don't ever know until you get through, but it looks like it's way above average," Rutherford County tobacco farmer Don Lamb said. "It's been a pretty good year — a whole lot better than last year."

Lamb has raised tobacco in the Eagleville community all his life. He and his son work about 10 acres, and even though he had a good year, Lamb said he doubts his crop will get any bigger anytime soon.

Tennessee's improved numbers — fueled by better rainfall and temperature conditions this growing season compared with 2007's hot and dry periods — buck a regional trend.

Production in burley-producing states this year is expected to total 197.6 million pounds, about 5 percent less than last year. Nationally, yields are up, but only by an average of 108 pounds per acre.

In Kentucky, a traditional burley powerhouse, this year's production is forecast at 144.9 million pounds, down 6 percent from last year.

Crop is less profitable

Tobacco once fueled the economies of many Middle Tennessee communities, but the production of the crop in Tennessee has fallen steadily over the past decade.

Federal price supports for tobacco ended in 2005, stopping the traditional quota system and creating a free market for the crop. Without the quota system in place, prices crashed that year and many small producers were driven out of the tobacco business.

"Overall, tobacco is less profitable" absent the federal price supports, said Kelly Tiller, an agricultural economist and director of the University of Tennessee's Center for Tobacco Grower Research.

Last year's drought-stricken crop was worth about $80.8 million, making it the fourth most valuable field crop in the state. Today's harvests are worth about a quarter of what Tennessee tobacco brought in the late 1990s. Production costs for such necessities as fuel and fertilizer are on the rise, and many smaller tobacco farmers have left the business.

In an attempt to sweeten the pot for growers, Givens said, tobacco companies are expected to up the prices they pay producers by a few cents. That increase coupled with positive yield numbers could boost next year's crop, as well, he said.

But experts say it is doubtful that the trend will hold up over the long haul, as labor and production costs rise and foreign markets increase burley production.

"A good year will make you want to stay in one more year," said Gray, 42, who has raised tobacco his entire life. Many other burley growers he knows have cut back, or left tobacco altogether.

"Burley tobacco just doesn't seem like it's profitable enough to make someone want to increase production," Gray said.




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