KENTUCKY (6/8/14) — Burley tobacco from overseas has flooded the world market since market prices for burley hit record levels in 2012.
Nations hoping to cash in on the demand for burley when supplies were at a lull in 2012 include those on the continent of Africa, where most growth in burley production has occurred in the past two years, according to UK agriculture economist Will Snell. Snell told state lawmakers in May that burley production in Africa has “almost doubled” since 2012 while demand for U.S. burley, considered a higher quality leaf, has somewhat declined.
He said “…it appears that in the midst of overall growing world burley supplies, couples with very sluggish domestic demand, some companies have reduced U.S. burley contract volume in 2014,” adding that reduced production for at least some U.S. growers “is certainly disappointing and somewhat surprising given how aggressive the buying interest has been in recent years in attempting to find more U.S. burley production.”
At the same time, however, Snell says U.S. burley exports have remained fairly stable since 2010, with prices for contracted U.S. leaf expected to exceed $2 a pound in 2014. Burley imports in the U.S. are on the upswing even as domestic U.S. cigarette production continues to decline, said Snell, who said he sees growing imports combined with a strengthening U.S. dollar relative to some other currencies and “constraints” on U.S. burley production as impediments to the U.S. market “in the near future.”
Now, what does this mean for our local communities and our local tobacco farms? I think we can say that competition from overseas and other stressors on the U.S. burley market have had some impact on the number of Kentuckians who have are leaving tobacco farming, but how about the decline in the number of tobacco farms in Kentucky in general?
It’s a fair question, and a good one to ask, because the decline in the number of Kentucky tobacco farms is a staggering 84.5 percent, according to the USDA’s 2012 federal Ag Census.
In 2012, Kentucky only had 4,537 tobacco farms, down from 8,113 in 2007 and a much more substantial 29,237 in 2002. That’s a huge drop, I think you’ll agree.
In our area where tobacco was a strong industry for most of the 20th Century--as it was for most of the Commonwealth--the 2012 Ag Census shows the tobacco industry faring better than in some other areas, although we have seen MAJOR declines.
Muhlenberg and Hopkins counties had between 10 and 49 farms growing tobacco per the 2012 Ag Census while Christian County, with 130 farms in 2012, was among 14 counties with 100 or more tobacco farms within its borders. Now, let’s look at where we were in 2002 and 2007. In 2002, Muhlenberg County had 95 tobacco farms, Hopkins County had 48, and Christian County had 312. We already know that as of 2012, Christian County had 130 farms, which means there was a 58.3 percent decline in tobacco farm acreage in that county in the decade between 2002 and 2012. Muhlenberg County had only 28 tobacco farms in 2012, representing at 70.5 percent decline in tobacco farms in that county over the decade.
The worst decline in the three counties in 2012 was registered in Hopkins County, where there were 48 tobacco farms in 2002 and only 10 in 2012, a 79.2 percent decrease in tobacco farms.
If there is any good news to be had out of the Ag Census for our area, it would originate in Christian County which the census data ranks as the top tobacco producing county in Kentucky in 2012. Production in the county topped 11.4 million pounds, which was significantly more than the 7.2 million pounds produced in the number 2 tobacco producing county in the state, Shelby County.
The question remains: How much of this decline is caused by the constraints on U.S. burley? Well, considering that burley tobacco comprised around 29 percent of tobacco production in 2011 (according to the National Agricultural Statistics Service, or NASS) I would say the impact is considerable.
It might not be much consolation, but it’s worth noting that Kentucky is not alone in experiencing tobacco farming declines. States throughout the U.S. Burley Belt and the nation have lost large numbers of tobacco farms, with a 72 percent decline nationally between 2002 and 2012.
I was happy to hear from Will Snell that there is still a demand for high quality Kentucky leaf despite the tighter markets, even if leaf produced outside of a contract is still very vulnerable in today’s market environment. We must act on the opportunities that exist.
Information provided by Brent Yonts
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