U.S. Tobacco Farmers Face Foreign Competition

Source from:  Published Thursday, January 19, 2006 CHARLESTON, S.C. (AP) 01/20/2006

Prices paid to farmers for flue-cured tobacco will increase in the coming year as farmers pay more for fuel, labor and machinery, economic experts say. But growers should not expect a substantial increase in the price paid by cigarette manufacturers, said Blake Brown, a tobacco economics professor at North Carolina State University in Raleigh, at the 42nd annual Tobacco Workers Conference here Wednesday. Growers of both flue-cured and burley tobacco, economists, merchant representatives were among those at the session. Prices paid to farmers will vary with individual contracts and the quality of the tobacco, experts said. Prices will steadily increase in the coming years while more tobacco companies are expected to increase their use of imported tobacco from countries like Brazil, the top U.S. competitor for flue-cured tobacco. The number of smokers is expected to decline as more people stop smoking and education keeps others from starting. Bill Givan, a tobacco economist with the University of Georgia Extension Service, said even though production costs will increase, farmers should stick with the crop because it is the most lucrative for the area. "Farmers know how to grow tobacco, they've grown it for years so don't just off tobacco yet," Givan said. "We're getting buyout money greater than what we were earning with just the crop. If you continue to farm and invest your buyout money wisely then I suggest grow a little tobacco because once farmers get out they don't tend to get back in." Keeping up the tradition of tobacco farming will help the United States remain competitive, experts said. Darryl Jayson, vice president of the Tobacco Merchants Association said almost three-quarters of leaf used in U.S. cigarettes will be imported by 2015. Enditem