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August, 2008

Hot weather brings US flue-cured down

Raleigh - As flue-cured tobacco harvesting got going in earnest in July, the US Department of Agriculture projected that production of this type - the first American type to be harvested - will be 503 mn pounds, down less than 1% from the 2007 crop, but 13% above two years ago.

Planted area is 221,000 acres, 1% below a year ago, but up 4% from 2006. Yield per acre is forecast at 2,276 pounds, 17 pounds above last year, and 178 pounds above the 2006 yield.

Yields will apparently increase in Georgia and Virginia compared to last year, while staying the same in South Carolina, and decreasing in North Carolina.

North Carolina remains the leading flue-cured state, with 75% of the estimated production. NC production is forecast at 378 mn pounds, up less than 1% from the 2007 crop, with planted area of 168,000 acres up 1% from last year. Yield is forecast at 2,250 pounds per acre, down 20 pounds from 2007, because of drought conditions - with soil moisture rated 75% short to very short. But the majority of the crop was rated in fair to good condition.

In the other flue-cured states:
  • South Carolina production is forecast at 45 mn pounds, down 2% from a year ago. Planted area at 20,000 acres is 2% below 2007. Yield is forecast at 2,250 pounds, unchanged from last year. Most of the crop was rated in fair condition, but low soil moisture affected plant growth.
  • In Virginia, production is forecast at 42.5 mn pounds, up 4% from 2007. Planted area is 6% below a year ago at 17,000 acres. Yield is forecast at 2,500 pounds, 220 pounds above last year, although dry conditions since transplanting have stressed the crop considerably. Growers began irrigating at the end of June, with optimism for a good crop, which was rated in fair to good condition.
  • In Georgia, production is forecast at 37.6 mn pounds, down 5% from a year ago. Planted area is 16,000 acres, 14% below 2007. Yield per acre is forecast at 2,350 pounds, 200 above last year. While dry conditions prevailed and soil moisture was short, there was relatively little tomato spotted wilt virus. With disease pressure down, growers were expecting one of the best crops in years.
  • Florida was not included in the survey since its leaders have elected not to participate. - (Bickers)

Agreement elusive on the current crop
Tillsonburg - Once again, Canadian tobacco growers will harvest their crop uncertain of what they will be paid for it or how much they will be able to sell.

At the annual meeting of the Ontario Flue-Cured Tobacco Growers’ Marketing Board, the organization’s Chairwoman, Linda Vandendriessche of Tillsonburg ONT, said that even though harvest was only about a month away, there was still no agreement between the board and the industry.

The current offer from the industry was purchases of 17.5 mn pounds at a price of CAN$2.04 per pound, with a guarantee purchase level of 91% and minimum export sales of four mn pounds. [Note: The Canadian dollar and US dollar are in near parity.]

This will not have satisfied any of the growers, who have planted a crop of 20 mn pounds and remembered that, just a year ago, 35 mn pounds had been purchased.

“The trade has not put anything forward that we would, in good conscience, accept,” Vandendriessche told the growers.

It’s unlikely any agreement will be signed before harvest, she said, and it is possible that crop negotiations might have to go to government arbitration.

She had one bit of good news: The 2008 crop will be sold by auction this year rather than on contract. But there was little progress to report on the board’s efforts to achieve a government buyout of quota.

And an external problem is worsening: As much as 40% of Ontario tobacco sales are now believed to be going through illegal channels.

There are now approximately 650 tobacco farmers in Canada, according to recent legislative testimony. A handful are in Quebec and one is on Prince Edward Island, but the vast majority are located in southern Ontario. Almost all grow the flue-cured type, except for a few in Ontario and Quebec who grow dark tobacco.

Transplanting had been completed at the end of the first week of June, according to a leaf house. The flue-cured crop in the field was said to be very uniform and progressing well, and the dealer increased its projection of the crop about 20 mn pounds, to over 26 mn lbs.

The leaf dealer estimated dark type production at 4.4 mn pounds, the most in five years. - (Bickers)

Tobacco International - August, 2008

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