July 15, 2005 | By: Laura Skillman
PRINCETON, Ky.

As expected, Kentucky burley tobacco producers have cut their acreage by nearly 30 percent, but the state’s other tobacco crops haven’t suffered the same fate. 

While Kentucky farmers are estimated to have planted 75,000 acres of burley, down 31,000 acres from 2004, dark fired tobacco acreage increased by 1,100 acres to 6,400 acres, according to the Kentucky Agricultural Statistics Service, which released its planting report on tobacco June 30. The report, the first acreage estimate since the U.S. government discontinued the decades-old quota system through a federal buyout, also showed that the state’s dark air-cured tobacco production dipped only slightly from 3,650 acres in 2004 to 3,500 acres this year. Figures are based on field reports from KASS staff across the state.

Dark tobacco is grown primarily in western areas of the state and used in smokeless tobacco products. Production likely remained more stable because of better profitability and familiarity with contracting. Prices for dark tobacco are lower by about 20 cents per pound, whereas burley prices are around 40 to 45 cents lower than a year ago, said Andy Bailey, tobacco specialist with the University of Kentucky College of Agriculture.

Production costs are higher for dark tobacco, but the potential profitability is still greater, he said. That profitability is driven in part by demand.

“Demand is going up every year for smokeless tobacco products,” Bailey said.

Nationally, smokeless tobacco consumption has increased for 17 straight years. Farmers are also hopeful that export demand will rebound with more competitive prices for U.S. dark tobaccos.

In addition to economics, dark tobacco growers have a long tradition of close relationships with tobacco companies. Many growers have been signing contracts for a number of years, although traditionally that was done in the fall after harvest rather than spring as it is now. Companies also have been more involved in actual production practices taking place at the farm level.

Bailey noted that the bulk of the increase in dark fired tobacco is coming from one company’s decision to increase its contract amounts. The remaining acreage was planted in early June, when some producers were worried that they might need more acreage to offset production problems. Most of the tobacco has rebounded from earlier problems, so there will be some production that is not under contract, he said.

Farmers will have the opportunity to sell that tobacco on the open market in several communities in the state as well as any contract tobacco that may be rejected by the companies. Open auction markets are being set up for all types of tobacco grown in Kentucky. However, there is no guarantee that the leaf will sell, nor is there a guaranteed price.

 

Contact: 

Writer: Laura Skillman 270-365-7541 ext. 278

Contact: Andy Bailey, 270-365-7541 ext. 240