Virginia Tobacco Growers Switch to Burley Variety to Cut Costs, Grow Profits

Source from:  By John Reid Blackwell, Richmond Times-Dispatch, Va. Oct. 23 10/24/2005

Like most Southside Virginia tobacco growers, Bert Carr has kept his farm running on flue-cured leaf. Carr has grown tobacco on his family farm in Halifax County for 30 years, since he was a teenager. He raises other crops, too, but flue tobacco -- a type of leaf so named because of its curing method -- is the mainstay, and the crop most identified with the rolling fields of Southside. But Carr's tobacco fields included something new this year -- burley tobacco, a cousin of flue-cured from the Appalachians and the Bluegrass regions. He raised 7 acres of burley tobacco, a different breed of leaf traditionally grown in Southwest Virginia, Kentucky and Tennessee, far to the west of Virginia's flue-cured belt. Drying stalks of reddish-brown burley tobacco hang inside a 270-foot-long, open-air shelter that Carr built specifically to cure his first burley crop, which he calls "my knight in shining armor" because he hopes it will help replace some of the flue-cured production he has lost in recent years. "I hope this will turn into a profitable venture," he said. "Unlike our cucumbers, or our sweet potatoes, or our hay, or the other things we have tried to diversify into, unprofitably." In the past, farmers in Southside Virginia couldn't plant much burley because of government restrictions. That changed with this year's growing season, the first after Congress approved a $10 billion buyout of the U.S. tobacco-quota system. The buyout ended supply and price controls on U.S. tobacco crops and threw production into an entirely free-market system for the first time since the 1930s. Geographic restrictions on tobacco crops also were eliminated, allowing Carr and other farmers to contract with cigarette companies to grow burley in addition to their flue-cured crops. As the free market continues to develop, some farmers and industry observers think burley production could shift eastward from traditional growing areas such as Kentucky, if farmers in Virginia continue to suffer falling demand for flue-cured leaf. "I think burley has got a place here in the Piedmont and Southside Virginia, and I think you will definitely see more of it planted," said Monte Holley, a Pittsylvania County farmer who grew burley and flue-cured crops this year. Both burley and flue-cured are used in American-blend cigarettes. The two varieties have different flavor characteristics and different harvesting and curing requirements. Flue-cured -- also known as bright leaf because of its golden color and lighter flavor -- is harvested by pulling the leaves from the plant and curing them in gas-heated barns. Burley tobacco is harvested by cutting the entire stalk at once and air-curing it. "Demand for burley is very high," said Blake Brown, an agricultural economist at N.C. State University who studies the tobacco industry. "It is a very different situation than flue-cured. There is sufficient demand, but insufficient supply." One way tobacco companies are addressing the short supply is to find new, low-cost sources of burley, Brown said. "The other way that companies will have to deal with the lack of supply of burley is to pay a higher price in order to have a sufficient incentive for growers," he said. Burley production has declined this year in traditional growing areas, largely because so many farmers exited the business after the quota buyout, said Daniel Green, a spokesman for the Burley Tobacco Grower's Cooperative Association in Lexington, Ky. "Flue-cured and burley had totally different situations this year," he said. "Flue-cured had more people willing to produce than the companies had contracts for. In burley, we have had so many people exit, that there is really a shortage up here. The companies are willing to take on even more growers today." One company interested in burley grown in nontraditional areas is Richmond-based Philip Morris USA, the nation's largest cigarette manufacturer. The company contracted this year with Carr, Holley and other farmers to grow burley in Virginia and North Carolina's flue-cured regions. "We're always interested in buying quality tobacco -- burley or flue-cured -- from growers who can produce it," said Philip Morris USA spokesman Bill Phelps. "Burley production was limited by the quota system. The end of that program brought some new opportunities, and some of those growers in Southside expressed an interest in growing [burley] for us." Phelps said he could not release the number of Southside farmers who are growing burley for the company, nor could he comment on the company's contracting plans for next year. "We have been encouraged by the progress of the crop so far in Southside Virginia," he said. For Carr, raising burley is one way to make up for big losses in flue-cured acreage. Carr said he grew 43 acres of flue-cured leaf this year, down from 100 acres last year, and he's not the only farmer to see such a loss. Flue-cured production has been dropping dramatically in Virginia since the 1990s, as tobacco buyers have turned to foreign markets such as Brazil for cheaper leaf. This year's flue-cured crop in Virginia is estimated at 14,000 acres, down from nearly 23,000 acres in 2004. Overall tobacco production in the state is expected to drop to about 17,100 acres, down from almost 30,000 acres in 2004. Carr said he hopes growing burley will help him cut fuel costs, which are lower than for flue-cured tobacco. Fuel costs have risen substantially this year. "Every input that we have going into the crop is more than it was last year," Carr said. "We hope that burley will be a way to control some of the [costs] from fuel and electricity." Holley said he was attracted to burley by the lower fuel costs, too, although burley is more labor intensive than flue-cured tobacco. "We're very happy with it," said Holley, who farms with his brother Derek. Both Holley and Carr said they hope to increase production next year. Burley could serve as a good secondary crop f