US: Weather May Reduce Tobacco Yields

Source from:  The Wilson Times 08/07/2018

Extreme weather conditions are expected to result in a lower yield on tobacco in eastern North Carolina this year, according to a crop forecast delivered to the Wilson County AgriBusiness Committee meeting last week.

George Scott, a vice president for leaf for Universal Leaf North America, a century-old tobacco purchaser, spoke to a larger-than-usual crowd of 50 Wilson County growers, bankers, educators, elected officials, journalists and businesspeople at Parker’s Barbecue.

“We had the ’17 crop finishing up at about 428 million pounds,” Scott said. “We had the ’18 crop starting at about 430 million. We believe with all of the unfortunate weather conditions we have had over the last three months, we are looking at about a 10 percent reduction in the volume. That remains to be seen. Some areas have got way too much rain now, and that’s going to bring the crop somewhere around 387 million. That’s what we believe.”

Scott said in eastern North Carolina, the condition of the tobacco crop “is all over the board.”

“It was strung out in transplanting just because of the weather conditions. Some areas have been way, way too dry. Some have been OK, and now we are getting into the mode where some have gotten too much water,” Scott said. “But I will take the water over what we saw two weeks ago. I was a very nervous person two weeks ago. If it hadn’t turned around, we were going to be in trouble.”

Scott said that what’s in the field has surprisingly turned around.

“I live in Wilson. Going back and forth from here to Nashville, there was some tobacco that I didn’t think would recover, and after about an inch of rain, it looks very good, so I am pleased,” Scott said. “The crop’s behind here. Normally we would open our receiving station here next week. It’s going to be the following week because everything is delayed.

The tobacco market is expected to open up for the year in Wilson the week of Aug. 13.

Scott said eastern North Carolina had a little more tomato spotted wilt than normal but “nothing too alarming.”

“I haven’t heard of excessive disease problems yet,” Scott said. “We will see after this rainfall. It could spike because it was so dry, and we got a lot of rain. We could see something late-season. As a whole, everything is good here.”

Scott said Wilson County has some of the better areas.

“But now there are parts of Wilson that don’t. It’s been very, very spotty,” Scott said. “It’s just who got the rainfall.”

Scott said it’s too early to tell about the overall quality of the crop.

“We are predicting a little bit less lower stalk just because of the growing conditions, but that’s not a bad thing,” Scott said. “The upper stalk ... I think we still have an average to above-average crop, a good quality crop that will satisfy the needs of our customers.”

WORLDWIDE OUTLOOK

“If you look at worldwide leaf production, it’s staying relatively stable,” Scott said. “Cigarette consumption as a whole is declining. It plateaued around ’14 and maintained through ’15. In ’16 we started to see a drop in cigarette production worldwide.”

Scott said one of the biggest factors facing this industry right now is “new-age products,” including e-cigarettes, vaporizers and heat-not-burn products.

Scott said looking at the U.S. market, the first and foremost challenge is the exchange rate with Brazil, the United States’ main competition.

“The gap between our pricing and the pricing down there is tremendous to say the least,” Scott said.

Scott estimates about 65 percent of the U.S. crop is exported from this country and about 35 percent remains here.

“Obviously our future rests in exports and gaining market share in other markets and not very much hope here domestically,” Scott said. “Overall, the flue-cured crop, going into 2017, we estimated about a 10 percent decrease in demand. Going into the 2018 crop, unfortunately, we looked about 6-8 percent off as well.”

Scott said tariffs will have an impact on tobacco.

“It’s not secret with the trade war going on with China right now,” Scott said. “China is one of our major customers. They have notified us as well as all other external suppliers that unless there’s no tariffs or no increase in tariffs, they are suspending their purchases. They are still going to buy from their own contractors, so they are honoring their contracts with the growers, so right now we have got to work through that. Tobacco is going to be impacted.”

Scott said he believes there is a chance that the trade issue will get worked out.

“Heck, it may even be better for us,” Scott said. “They may buy more.”  Enditem