Good leaf, Low Prices

Source from:  By CHARLIE RICHARDS, Daily Dispatch Writer 08/11/2004

"I'm not sure" was the best prediction Congressman Brad Miller could offer tobacco growers about the prospects for quota buyout legislation when he visited with them at the opening of the tobacco market here Monday. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/news01.jpg] Despite the uncertainty, the buyout proposal vied with the crop quality as the subject of conversation during opening day festivities. The occasion was both the market opening and the Chamber of Commerce Tobacco Heritage Celebration, a breakfast hosted by a host of local businesses. A standing room only crowd showed up at Billy Yeargin's Warehouse on Goshen Street for the breakfast of sausage and bacon and eggs and grits and biscuits. For that part of the morning, a good time was had by all. But a good while later, when the first sale of the year started, the news was not so good. The first bale went to the Flue Cured Tobacco Stabilization Corporation at the support price of $1.46 a pound, and sales officials admitted they expected 90 percent of the floor to go to the co-op. Such was the case last week when the market opened in other belts. Theories may vary, but the general understanding is that tobacco manufacturers will meet most of their needs through contract growing and imports, and later will buy from the co-op at reduced prices after the domestic crop has been processed, aged and stored. For such reasons, plus declining consumer demand, the quota was reduced again for growers this year. (The 8.4 million pounds allotted to Granville growers this year, for example, is about 10 percent less than last year. The total flue-cured crop this year is about a third of its all-time high.) To some, the reduced size of crop and the resort to co-op purchasing was a shame because of the quality of this year's leaf. "It looks good in the field and cures good," said Yeargin as he looked across his floor of this year's crop. He added the bright orange leaf may be light in weight because of the wet year. Scott Bissette of the N. C. Department of Agriculture agreed, saying, "it's as pretty a crop in the field as we've seen in a long time." Yeargin, Keaton Rankin of Planters Warehouse and Sam Crews of Farmers, which conducts the co-op's own auction sales, all reported good leaf coming in this year, with very little hold over from last year. Last year's crop was not so good because of too heavy rains, and few growers wanted to hold any over because of the uncertainty faced by the growers. Part of the uncertainty is due to the prospect for buyout legislation. As Dan Crawford, Rep. Miller's aide, put it, "Everywhere we go the talk is buyout." During the breakfast program, Graham Boyd, executive of the N.C. Tobacco Growers Association, described the tobacco situation as a "downward desperate spiral," adding there has been a "lot of serious change in a very brief time." The quota buyout is the only solution in sight, he said, which is why his association is focusing its attention on Washington. There, Boyd said, a bipartisan effort has secured passage of a bill in the House, but it is different from a Senate version. The legislation will face a conference committee after Labor Day. And that's when Miller is not sure what will happen. Tobacco is not a favorite subject of many in Congress, and few outside the tobacco world understand how paying rent for quota is "like carrying a lead weight," as Miller put in describing U.S. growers facing foreign competition. The buyout proposal could relieve growers of that cost, compensate quota owners and growers with $9.6 billion over years and pump cash into the sagging rural economy of the southeastern states that grow tobacco. For those reasons, Miller said, "Everybody in rural North Carolina should care (about the buyout prospect). We need that capital." While prospects for the legislation is iffy, and some describe the tobacco situation desperate, there remains some optimism. Oxford's Sam Crews, currently president of the growers organization, said he believes "we have a future as tobacco growers," despite foreign competition, reduced quota, high fuel and labor costs and litigation over the product. Growers still think themselves "the world's best tobacco growers," as Boyd put it in his talk. A stroll through the rows of bales on the floors of the Oxford warehouses Monday showed why. Regardless of the grades or the prices, old timers would call the bright leaf offered for sale a pretty crop. Enditem