Tropical storm damage from Hurricane Irene and other storms really hit tobacco fields hard in 2011, particularly in North Carolina's prime growing area, east of I-95. Growers will be concentrating on regaining their footing and recovering from the storm by simply growing a good crop in 2012. But the simple solution is never quite as simple as it sounds.
"What will be working against us is the cost side," says Richard Anderson, a grower in Leggett, North Carolina. "The prices of fertilizer and chemicals are up. Seed prices are just getting way out of whack. LP gas is way up, too, and most farmers don't have access to natural gas. None of the alternatives seem to be showing any progress."
Anderson notes that tobacco hasn't participated in price rallies the way many other crops have done. Cotton prices, peanut prices and the prices of other crops have risen. Tobacco prices seem stagnant in comparison
"Tobacco is going to have to start competing for acres with other crops," Anderson says. "It is going to have to show a superior return because it is a superior product. I really see land rents getting pushed because of these alternative crops that are beginning to chip away at it. Tobacco is going to have to fight for its acres. There is not a lot of new investment in infrastructure as far as tobacco goes, in term of increasing tobacco's production capacity."
Marion Pridgen of Pridgen Farms in Wilson, N.C., says the tobacco industry has a lot of problems right now -- but like Anderson, the first one that comes to his mind is price.
"We've been operating under a price structure that is obsolete," Pridgen says. "The companies are running behind the times. They need to ante up. For the amount of investment that we have and the risk that we are taking, the rewards are not there like they used to be."
Pridgen notes that today growers have to make better than 2,500 pounds per acre just to make ends meet. Only at that production level, he says, can growers sustain the investment's they have already made. And even at that, "We can't upgrade equipment," he adds.
"The companies don't seem to give us any incentive," Pridgen says." They are just putting a little more demand on us all the time and we are not being compensated for some of it."
Pridgen notes that there is a lot of pressure to eliminate the use of maleic hydrazide for sucker control. But since maleic hydrazide is a relatively inexpensive solution, that too, increases costs.
"Personally I think we can accomplish eliminating (maleic hydrazide) but it is going to cost us extra money to do so," he says.