Tobacco Sale to Start on April 5

Source from:  Sue Book Sun Journal Staff  03/30/2005

The U.S. Department of Agriculture's Commodity Credit Corp. has announced it will sell more than 100 million pounds of tobacco - about one-fifth the annual domestic production - beginning April 5. The USDA got the tobacco as part of the Tobacco Reform Act of 2004 passed by Congress in 2004. That act ended the federal tobacco price support loan program and detailed the $9.6 billion Tobacco Transition Payment Program or tobacco buyout, which includes about $3.9 billion to North Carolina tobacco farmers over the next 10 years. The leaf - 72,728,296 pounds of flue-cured tobacco and 27,480,783 pounds of burley tobacco - comes from inventory formerly owned by the flue-cured and burley tobacco stabilization groups, which are now contracting with individual farmers like private tobacco companies. It comes from 2002, 2003 and 2004 flue-cured tobacco crops and 1994, 1997, 1998, 2000, 2002, and 2003 crops of burley tobacco. News of the sale, apparently posted on the Farm Service Agency Web site late last week, was still news Monday to Craven-Carteret Farm Service Agency employees and local farmers. But Cove City tobacco farmer Dred Mitchell said he doubts the large sale will have immediate adverse effects on the sale price of most area tobacco farmers' 2005 crop. Mitchell has contracted with stabilization for the sale of his 2005 tobacco crop, and has been informed stabilization holds contracts for 100 million pounds but is only going to buy 40 million pounds. He doubts many farmers without a contract will plant tobacco as wildcats. "It shouldn't have an effect on prices because the prices are already contracted with companies and stabilization," Mitchell said. "I, personally, think the small farmer is going to be squeezed out and you're going to have to get big or get out," said the fourth-generation Craven tobacco farmer. "I'm probably the last tobacco farmer in our family," said Mitchell, who will plant about 25 acres. Available inventory being offered for sale by the USDA is expected to be posted in a sale catalog at http://www.fsa.usda.gov/daco/catalogs.htm, but that Web site was not available Monday. The CCC will accept minimum offers of 48,000 pounds that must be submitted by 9 a.m., April 5, to the Kansas City Commodity Office, Attn: Bulk commodities Division Bid Box - Stop 8748, 6501 Beacon Drive, Room G-42-A, Kansas City, Missouri 64133-4676. Sue Book can be reached at (252) 635-5666 or sbook@freedomenc.com. Enditem