Leaf No Longer Top Cash Crop for VA. Farmers ; Soybeans Bring in $11 Million More Than Tobacco in 20

Source from:  By John Reid Blackwell Richmond Times - Dispatch 11/29/2005

The king of crops in Virginia is king no more. Tobacco -- a mainstay crop since settlers began planting it here in the 1600s -- was toppled as the state's top cash-earning crop in 2004. The new king is . . . the soybean. Soybeans, which have a wide variety of uses, brought about $124 million in cash receipts for Virginia farmers in 2004, according to new figures from the Virginia Agricultural Statistics Service. Tobacco slipped to second place, producing about $113 million in cash receipts. Though shocking from a historical perspective, tobacco's fall from the top spot is no big surprise for the state's leaf farmers. Tobacco acreage has been on a downward trend in Virginia for decades, and production has plummeted over the past eight years because of several factors, including declining U.S. smoking rates, increased competitive pressure on large cigarette makers and, most significantly, an exodus of buyers to such foreign markets as Brazil and Africa for cheaper leaf. In 1997, Virginia farmers made about $191 million in cash receipts from 53,000 acres of tobacco. That year, soybeans brought about $99 million in cash receipts on 490,000 acres. By 2004, tobacco production had dropped to about 30,000 acres. Tobacco's drop in the rankings "doesn't surprise me . . . because we have a sharp decrease in people who are growing a little tobacco," said John Boyd, a Mecklenburg County tobacco grower and president of the National Black Farmers Association. "They are saying, `I am just not going to do this anymore.'" With the elimination of the federal government's tobacco price- support program this year, "I think you are going to see a large decrease in tobacco production," Boyd said. "Overall, you are going to see a decrease in dollars in these communities where tobacco was the largest cash crop." Cash receipts from tobacco actually rose from 2003 to 2004, but the long-term decline in tobacco production, combined with a good year for soybeans in 2004, was enough to push the legume over the top. "We finally got to that breaking point, where one of the other crops took [tobacco] over," said Kevin Harding, a statistician for the Virginia Agricultural Statistics Service. Soybean production rose from 480,000 acres in 2003 to 530,000 acres in 2004. "We had excellent growing conditions, especially after several years of drought," said Dick Atkinson, executive director of the Virginia Soybean Association. It seems unlikely that tobacco moved back into the top spot among crops during the 2005 season. Production dropped even further this year to about 17,000 acres. Prices have dropped, too. Some farmers quit the business after Congress ended the federal price-support and supply-control program, returning the agricultural side of the tobacco industry to a fully free market for the first time since the Great Depression. As part of that change, cigarette companies financed a $10 billion buyout of U.S. tobacco quotas, which were essentially government licenses to grow the crop. Quotas have been treated as assets. The buyout provides a 10-year stream of payments aimed at helping many farmers retire or switch to other crops, Atkinson said. "Some of the acres that tobacco has been grown on are 1- to 5- acre plots," he said. "That may not be conducive to growing corn, but it might be conducive to soybeans." Tobacco may be able to regain its spot as Virginia's top cash crop, depending on how the market develops without government controls. The recent sale of a large amount of U.S.-grown tobacco to China's state-run tobacco monopoly could be one sign that the crop will rebound. "I think our tobacco is becoming more competitive on the world market," said Don Anderson, a South Boston farmer and executive director of the Virginia Tobacco Growers Association. "Hopefully, we can recapture some of those markets we lost at the time when our prices were above world market prices." Virginia's top cash crops Cash Va.'s receipts Acres national Rank Crop (millions) harvested rank 1. Soybeans $124.3 530,000 20 2. Tobacco $112.9 29,680 3 3. Tomatoes $95.9 5,500 3 4. Corn, grain $94.8 360,000 23 5. Hay $45.6 1,290,000 21 6. Cotton $38.9 81,000 14 7. Winter wheat $31.8 180,000 22 8. Apples $29.3 15,000 6 9. Peanuts $22.5 32,000 7 10. Summer potatoes $9.0 5,000 7