Kentucky Exceeds Expected Tobacco Acreage in 2006

Source from:  Associated Press OWENSBORO, Ky. kentucky.com 07/17/2006

Kentucky farmers planted 73,000 acres of tobacco this year, a 3,000 acre increase over 2005 - a reversal of what agriculture experts were expecting. Agricultural analysts predicted a 17 percent decrease for 2006 in Kentucky tobacco when compared to 2005 because the federal tobacco quota buyout program ended price supports in 2005. That prompted about half the state's farmers to drop tobacco production. "If you asked farmers in January and February, there was certainly a negative attitude when the price schedules came out," said Will Snell, a tobacco policy specialist with the University of Kentucky. The U.S. exported more tobacco in 2005 than was grown during the year, with the difference made up from tobacco company inventories and stocks from tobacco cooperatives. That leaves tobacco stocks virtually depleted, making tobacco companies dependent on the U.S. tobacco crop, Snell said. Tobacco giant Phillip Morris offered farmers an incentive program which paid farmers premiums to sign deals with the company early in the season and offered additional incentives for farmers who delivered 100 percent of their contract pounds and expanded their tobacco acres. "Certainly Philip Morris' incentive was a benefit to those who expanded," Snell said. "We're never going to go back to the levels of 1997-98 ... but I do see the potential for expansion. Kelly Tiller, assistant professor at the Agricultural Policy Analysis Center at the University of Tennessee, said farmers in Tennessee also increased acreage from an expected 13,000 acres to 14,000 acres. That was still a drop in acreage from 2004, when farmers planted 17,000 acres in Tennessee, Tiller said. Phillip Morris' offer may have come too late to aid tobacco farmers in Tennessee, where the crop is planted earlier in the season, Tiller said. Farmers looking to expand likely couldn't find tobacco plants, Tiller said. "We plant earlier in Tennessee than in Kentucky, so (growers) didn't have much time to respond," Tiller said. Snell said the lack of plants probably prevented some expansion of tobacco acres in Kentucky as well. "Statewide, we probably would have seen a better increase if plants were available," Snell said. Other states are picking up production that Tennessee farmers have let drop, Tiller said. "It appears Tennessee has lost some market share to Kentucky and other states that are ramping up production," Tiller said. " ... Some of the additional acres (in other states) were at the expense of Tennessee." Enditem