Burley Growers Gain Auction Sale Option

Source from:  By Janet Patton HERALD-LEADER BUSINESS WRITER 06/03/2005

Would-be tobacco growers looking for an alternative to contracting with Big Tobacco will still have an option. The Burley Marketing Association in Kentucky and the Burley Stabilization Corp. in Tennessee have announced 10 warehouses that will hold independent auctions. Until this year, tobacco farmers were guaranteed a price set by the U.S. Department of Agriculture. With the federal buyout of all tobacco quotas, farmers will be selling their commodity on the open market for the first time since the Depression. The only other way to sell tobacco has been through a contract directly to a cigarette manufacturer. In the past two years, three-fourths of all burley was sold through contracting. But farmers always had the safety net of a guaranteed sale at auction. Now, many worry that without that alternative they will be unable to sell tobacco without a contract, said Donna C. Graves, executive director of the Burley Marketing Association. "It's an evolving market," she said. "There's a lot of uncertainty out there." Four warehouses owned by Tennessee's Burley Stabilization Board will hold auctions. In Kentucky, warehouses in Danville, Harrodsburg, Lexington, Maysville, Mount Sterling and Somerset will hold auctions. More warehouses could be added in the region, according to the Burley Marketing Association. "This year, more than ever, tobacco farmers need an alternative in selling their tobacco to maintain a competitive market for their product," according to the association's news release. Times and dates for the auction will be set this fall. Enditem