November 5, 1998 | By: Randy Weckman

After a challenging growing season, with dry weather taking its toll on late planted crops, Kentucky burley tobacco producers are expected to market $900 million in tobacco from this growing season, according to a University of Kentucky Extension agricultural economist.

"Not only were Kentucky tobacco farmers confronted with difficult growing and curing conditions, the intense political climate and depressed world tobacco prices means that Kentucky's burley crop will be reduced in quality, quantity and value compared with the 1998 crop," said Will Snell, Extension agricultural economist.

After intense debate, the U.S. tobacco industry survived various legislative challenges and court rulings dealing with liability and regulatory issues, he said. These events enhanced domestic demand for 1998 crop, although demand growth was constrained somewhat by declining domestic cigarette production and increased use of imported leaf.

Export demand, he said, was hampered by lingering international financial crises, surplus supplies and a strong U.S. dollar.

The Kentucky tobacco outlook remains uncertain given the current political, legal and economic environment, Snell said.

"Congress likely will again address the issues of tobacco taxation and regulation," Snell said.

Depressed international financial conditions, a relatively strong dollar and surplus stocks will limit export growth. Worldwide tobacco consumption, however, is expected to increase to record levels, helping offset the current surplus of burley tobacco in international markets, Snell said.

Snell said that basic quota is likely to decline by double digits in 1999 if U.S. manufacturer purchase intentions remain stable and pool intake from the 1998 crop is high.



Writer: Randy Weckman
(606) 257-3937

Source: Will Snell
(606) 257-7288