Prices at warehouse auction average $1.50/pound

Source from:  The Associated Press 11/24/2005

Tobacco farmer Alan Ahrman, with grandson Sam, 4, looks over this year's crop Tuesday at his farm in Grant's Lick. In Danville, the Farmers Tobacco Warehouse had its first auction since the removal of federal price controls on tobacco. Farmers there sold 100,000 pounds of tobacco. "We'll see how the price does, and if it's fair to us ... we'll continue to raise it," says Ahrman, 55, of his tobacco crop. He has farmed in Campbell County all his life. Tobacco farmer Alan Ahrman opens his barn to look over this year's crop at his farm in Grant's Lick. He thinks tobacco's future is assured if prices stay around $1.50 to $1.60 a pound. DANVILLE - Don Williams didn't know what would happen Monday when a bevy of tobacco buyers approached his leaf for the first time without the security of a price-support system that was scrapped a year ago. His anxiety faded when his rust-colored burley sold for $1.54 to $1.65 per pound, enough incentive for him to plant another crop next year, the 74-year-old Casey County farmer said. "It's a little better than what we were expecting," said Williams, who endured dry growing and curing seasons to get this year's crop to market at a warehouse his family has done business with since the 1920s. It was a first-of-its-kind opening of the burley auction season for farmers who sold leaf at Farmers Tobacco Warehouse. Gone was the Depression-era federal program that set price and production controls on U.S. tobacco. In the past, growers were guaranteed a pay day. This time, there was no set minimum price and no guarantee that the leaf would be claimed - a byproduct of the $10.1 billion tobacco buyout passed by Congress last year that created a free market in the tobacco sector. "What you're seeing here today is probably the first tobacco that's been sold without a price-support program since the early '30s," said Ben Crain, a longtime tobacco warehouse operator. The Danville warehouse, next to Centre College in this central Kentucky city, was the only place to have a tobacco auction Monday in Kentucky, the nation's top producer of burley tobacco - an ingredient in cigarettes. Other warehouses were scheduled to have auctions later in the month. Alan Ahrman has been farming in southern Campbell County all his life. He and his three children work the farm from sunup to sundown, he said. "And sometimes later than that," Ahrman said. "It's a lot of hard labor and work." The 55-year-old said he is waiting to see what prices will be like this year. "We'll see how the price does, and if it's fair to us ... we'll continue to raise it," he said. "And maybe we'll even see an expansion." Ahrman said he and other Northern Kentucky farmers have been hearing prices will be around $1.50 to $1.60 per pound. "As long as it stays in that range, people will still raise (tobacco)," he said. Tobacco auctions used to be a staple of Kentucky agriculture but have nearly vanished now that most farmers sign contracts with major tobacco companies. In all, nine warehouses in eight Kentucky cities will open for auctions this season, down from 96 warehouses just six years ago. Each market will have sales once a week, at least early in the season. Limited sales also are scheduled in Tennessee, North Carolina and Virginia. At the Danville warehouse, a few dozen farmers sold a little over 100,000 pounds of leaf that brought an average price of $1.56 per pound. Last season, tobacco averaged nearly $2 a pound when the support program was still in effect. Enquirer reporter Andrea Remke contributed.