The End of an Era in Tobacco

Source from:  By Robyn Minor, rminor@bgdailynews.com  11/22/2004

Buyout program replacing auction Today began what is the last season of a Bowling Green tradition - burley auction sales. Brannen's Tobacco Warehouse No. 6 had farmers milling about, speculating what will happen and how long it will take to get the tobacco buyout in place. Congress approved a plan in October that will eliminate the price support and quota system, with sales being contracted directly with tobacco companies. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/0ezO_top-news1.jpg] There wasn't a lot of optimism among farmers about the future of tobacco, with or without the quota system. "There is not a lot we can do about it," said James C. Rose, a Warren Countian who has been growing tobacco for 40 years. "I probably won't grow any more after this. I'm 76 and it's time to quit." Rose was leaning on a bale of tobacco with his friend, Paul Wayne Martin, as the auction was going on several aisles away. Martin, also from Warren County, brought about 12,000 pounds to the floor for sale and sold about 2,000 pounds on contract. The contract price was about $2 a pound. "After this sale season is over, that will go way down," Martin said. He and Rose speculated that the average in the future will be between $1.30 a pound to $1.50. "At $1.50 you can make a little money, but if it goes any lower than that, you can't," Martin said. The auction market has already lost its luster for Robert Mathews of Alvaton, who joined the two farmers. This is the second year buyers used mini-computers to punch in the price they are willing to pay for tobacco - from $1.95 to $2.10 a pound early in the sale today. There is none of the traditional auctioneer yodeling going on. "It's about as exciting as watching paint dry," said Mathews, who grew about 15,000 pounds of tobacco. After growing tobacco for about 40 years, he said he's finished. One of the youngest farmers there, Daniel Grimes, 19, said his family also hasn't decided if it will continue to grow tobacco after this season. "We might if we have to," said Grimes, whose family has just a little more than 3,000 pounds in 1.25 acres. His grandfather, Fred Grimes, said the family used to grow as much as 10 acres. The elder Grimes hasn't been in tobacco for about five years because of heart problems. He was a little sentimental about the sale. "I kind of hate to see it go," he said. Sales opened earlier elsewhere in the state. On Monday, a Lexington warehouse got as much as $2.10 a pound, with most averaging $1.99. About 210,000 pounds went into the surplus pool, something that will no longer exist when the government program ends. Kentucky growers sold 2.24 million pounds of leaf Monday for $4.48 million, an average of $199.66 per hundredweight, according to the Federal-State Market News Service. While farmers likely won't get as much for the tobacco selling directly to manufacturers, their costs will be somewhat reduced. Farmers will no longer have to pay to rent tobacco quotas from other farmers. In the buyout farmers who also own their quota will receive $10 a pound. Farmers who rent quotas will get $3 a pound; those who own the quotas will get $7 a pound and farmers who own quotas and grow tobacco will get the full $10. Bowling Green's auction sales had already dwindled last season to just a few days, with many farmers already choosing the contract sales route. This season the sales will be today, Nov. 29, Dec. 6 and 15. Manager Jamie Brannen said he's not sure what's in store for the tobacco warehouse's future. He said his family will try to somehow remain in the tobacco business. What used to be one of the area's largest auction houses owned by the Bale family in Barren County is now a weigh station for tobacco companies that purchase tobacco from farmers on contracts. Donald Dunn, director of the Farm Service Agency in Warren County, said his office still is waiting to hear how and when the buyout will begin. Enditem