Tobacco Production to Vary Among Counties

Source from:  OWENSBORO, Ky. (AP) 04/07/2005

Most Daviess County tobacco farmers are planning to continue production in the first post-tobacco buyout planting season, the county ag extension agent says. "All of the producers I've spoken with have gotten contracts with the tobacco companies," Clint Hardy said. "I've spoken to a few individuals who are going to get out of production or cut way back on production." In neighboring Hancock County, only one-fourth of the farmers who grew tobacco in 2004 will plant a crop this year, said county ag extension agent Diane Perkins. "I'm very surprised," she said. "Even some of our big tobacco producers that I thought would stay in or even increase" have opted to not grow this year. "I'd say three-fourths of our producers are getting out - but a lot of them are older, and it's time they did anyway." The tobacco buyout passed by Congress last year ended the Depression-era system of price and production controls. The buyout will pay about $10 billion to the nation's tobacco farmers to give up their production quotas and move into a free market. Kentucky tobacco production will be lower than in 2004. According to U.S. Department of Agriculture planting intentions reports, 73,000 acres of burley tobacco will be planted this year, compared to 106,000 acres in 2004. U.S. farmers intend to plant a total of 108,000 acres of burley this year, down from 154,650 acres in 2004, according to USDA reports. Perkins said she has talked to producers who are uncomfortable about growing tobacco without the price-support program that ended when the buyout was signed into law. "They don't feel comfortable with the price they might get" from tobacco companies, she said. "They're afraid the companies will try to put a lower grade on their tobacco." With the price support and production control system that regulated tobacco for decades a thing of the past, farmers will have few options to sell their tobacco crop except by contracting to sell directly to a tobacco company. "At this point, I haven't heard of any specific tobacco auction that will be held in Kentucky," Hardy said. With the price-support system over, farmers will have to work carefully to produce the best possible crop, he said. "There will definitely have to be a step up in management and preparing that crop for market, because there is no safety net," Hardy said. "People are going to have to step up and make some overall changes." One reason farmers give for growing tobacco this year is they may want to grow in the future - and fear being locked out of contracts by tobacco companies, said Kelly Tiller, a research assistant professor with the University of Tennessee. "A concern is, if they do not stay in and get a contract, they will not be able to get a contract in the future," Tiller said. Enditem