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November, 2008

Renegade-Auction

Stormy September sinks yield prospects

Washington, DC - It was a stormy September in the American tobacco belt, and there was no help to anyone who was hoping for a big US crop.

Probably the biggest disappointment was that flue-cured production - as measured by the US Department of Agriculture survey conducted October 1 - fell 2% in the month of September. It had risen 3% the month before. Much of the loss was due to the rains brought by Hurricane Hanna and by an unnamed storm that struck northeastern North Carolina late in the season. Meanwhile, the residual effects in the state of Georgia of Tropical Storm Fay in late August led to yield losses on flue-cured estimated at 20% between September 1 and October 1.

Growers in Kentucky and Tennessee took a major hit on their burley and dark tobacco, much of which was in the barn already, from Hurricane Ike.

The USDA reported that yields fell in September for flue-cured and cigar tobaccos and held at roughly the same level for burley and fire-cured. Only dark air-cured and the small Southern Maryland type got the conditions needed in September to increase yield.

The USDA, estimate, included in the agency’s October 10 Crop Production report, projected the different types this way:

  • Flue-cured production is expected to total 509 mn pounds, 2% below the previous forecast but 1% above last year, on planted area of 226,500 acres, up 2% from a year ago. Yields are forecast to average 2,245 pounds per acre, a drop of 50 pounds from the last forecast and 14 pounds less than in 2007. South Carolina’s yield dropped by 150 pounds since the September 1 survey, while Georgia’s dropped 100 pounds and North Carolina’s dropped 50 pounds. Rains associated with Tropical Storm Fay in Georgia and Hurricane Hanna in the Carolinas were responsible for much of the loss.

  • Burley production will total 198 mn pounds, the same as in September but 5% below last year, on a record-low planted area of 95,950 acres, 10% less than in 2007. Yields will average 2,059 pounds per acre, nine pounds more than last month and 108 pounds above a year ago. The yield increase since September came entirely in Pennsylvania and Tennessee, where projected yields rose 50 pounds. Burley yields in all other States remained the same.

  • Fire-cured production will reach 61.5 mn pounds, the same as in last month’s forecast but 48% above 2007. Planted area is 18,400 acres, same as last month but up 26% from a year ago. The yield is expected to average 3,342 pounds per acre, the same as last month but up 487 pounds from last year. But there is reason to think the USDA report may be over-optimistic for this type: University sources in Kentucky said the yield prospects for this type were seriously compromised in mid September when winds associated with Hurricane Ike destroyed 35 barns and an estimated 1.5 mn pounds of this type in Kentucky and Tennessee, the two major dark fire-cured states. The only other state with dark fired production is Virginia, which produced about 1.5% of the projected crop.

  • Dark air-cured production will reach 24.6 mn pounds, up slightly from last month and 82% above 2007, on planted area of 8,300 acres, 67% more than last year, with a projected yield of 2,961 pounds per acre, up 19 pounds from last month and 9% above a year ago. Many growers in Kentucky and Tennessee have shifted acreage from burley to the dark tobacco types in expectation of higher prices.

  • All cigar type production is expected to total 8.98 mn pounds, down 1% from last month’s forecast and 20% below last year. Growers of cigar type tobacco plan to harvest 5,090 acres, unchanged from the previous forecast but down 15% from 2007. Overall yield is expected to average 1,764 pounds per acre, down 17 pounds from September 1 and 109 pounds below a year ago.

  • Southern Maryland (Type 32) - produced almost entirely in Pennsylvania - skyrocketed in production in 2008 to 3.78 mn pounds, 64% more than 2007. This rise was helped by good weather conditions in the month of September that improved the projection by 11%. Planted area increased by that same percentage, while yields, projected at 2,100 pounds per acre, will remain the same as last year. Small plantings of Type 32 were reported in Maryland and Virginia this year but are not included in the USDA calculation.
- (Bickers)

Tobacco International - November, 2008
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