Economist: Estimates Of $700-$800 Million Tobacco Crop Are Encouraging

NCSU's Blake Brown says 2012 was excellent for flue-cured, especially in TarHeel State.

Published on: Feb 21, 2013

Flue-cured tobacco production was about 473 million pounds in the U.S. in 2012, notes N.C. State agriculture economist Blake Brown, with 377 million pounds of that total produced in N.C. Those estimates are from USDA National Agricultural Statistics Service Crop Estimates and if they hold up they reflect an excellent sign for the industry, both nationally and in the TarHeel State.

Brown's outlook at the Annual Meeting of the Tobacco Growers Association of North Carolina each year is one of the most highly anticipated presentations of the event. Brown, a N.C. State University agricultural economist and a Hugh C. Kiger Professor, is highly respected in the flue-cured tobacco industry and growers look to him each year to get a sense what is down the road for the sometimes turbulent tobacco industry.

ON THE COMEBACK TRAIL?  Having lost its way for a number of years, U.S. flue-cured tobacco may have again found the road to success. In 2012 growers had good yields and good quality and NCSU agricultural economist Blake Brown says there is also good demand among buyers on the world market for high quality U.S. leaf.
ON THE COMEBACK TRAIL? Having lost its way for a number of years, U.S. flue-cured tobacco may have again found the road to success. In 2012 growers had good yields and good quality and NCSU agricultural economist Blake Brown says there is also good demand among buyers on the world market for high quality U.S. leaf.

 "When you look at North Carolina with an estimate of 377 million pounds, we are going to be moving back towards that $700 to $800 million-dollar value crop this year. That is very encouraging. We are moving back in the right direction on U.S. flue-cured tobacco, particularly in North Carolina when we are producing 70%, 75% and in some years 80% of that crop."

Brown points out that since the end of the federal tobacco quota system with The Fair and Equitable Tobacco Reform Act of 2004 some tobacco industry information is often difficult to gather. He's not sure what prices will be this year although he has a sense they will be good.

"I'm not sure what our average is going to come out around but when I listen to some of you, I'm not going to be terribly surprised if it is something close to $2 per pound," he said. "We had good quality and that was the key. That is what has been missing for two years and that is one reason we had so much pent-up demand, because of the lack of supply of very good quality tobacco in 2011 and 2010, not only from the United States but also Brazil."

In addition to good prices and good quality, U.S. growers also had good yields, he noted. There is also good demand for a number of reasons.

First, he notes, demand in the Peoples Republic of China continues to be solid. That nation will manufacture about 1.5 trillion cigarettes this year, he said.

Also, there is a global trend toward banning flavorings in cigarettes, which Brown reasons will leave leaf customers more dependent on high-quality U.S tobacco. Deprived of artificial flavorings, customers are likely to turn to quality tobacco because of its natural good flavor.

Editor's note: Look for additional coverage of Brown's Situation and Outlook Comments in the April issue of Carolina-Virginia Farmer magazine.