Upbeat Prospects

January 30, 2009 06:00 PM

Since federal support programs ended in 2004, the tobacco industry has grown smaller and leaner. Now things look surprisingly upbeat for farmers who persisted in the evolution to a contract business.
Quick Start for a Young Farmer
As a youngster, Jacob Farmer helped neighbors work tobacco in Clinton, Ky. At 16, he rented his grandfather's burley base and
began farming on his own. Two years later, he started growing dark fire-cured tobacco.

"There is an art to firing tobacco, and with that comes a lot of pride,” Farmer says.

Now 30, Farmer has considerably expanded his tobacco operation. In 2008, he built a dark-fired barn to cure 3.5 acres. He's working on a contract that will call for an additional 5 acres of dark-fired leaf and hold dark air-cured acreage to 3.

"If the negotiations go the way I think they will, I plan on building another dark-fired barn,” he says.

This expansion comes as he works full-time for a large farmer in the county. He also manages four poultry barns and grows corn and soybeans.

"I figure the more diversified the better. However, tobacco is my first priority, and I will expand as long as the opportunity exists,” he says.
"One thing I have going for me is that I am only 30 years old, which is very young for a tobacco farmer. The majority of tobacco farmers are 55-plus, so there should be potential for expansion,” Farmer says.

In Tennessee and Kentucky, dark air-cured and dark fire-cured tobacco used for moist snuff­­­ (smokeless tobacco) are coming on strong while burley holds its own.

As farmers changed in this new business climate, so did researchers. The universities of Kentucky and Tennessee now collaborate on tobacco projects and even share personnel, a plant breeder and Extension specialists for both burley and dark tobacco. "It's a win-win-win situation,” says Bob Miller, tobacco breeder and geneticist.

A new Center for Tobacco Grower Research is headquartered at the University of Tennessee in Knoxville. Daniel Green, a former Extension tobacco policy issues specialist, heads it up. Funded by Philip Morris, the center gathers tobacco industry information. Knowing who is doing what in the business, an easy task under the old government quota system, got considerably tougher when farmers were no longer forced to report. The Center hopes to fill that void.

"Tobacco remains the most important cash crop for hundreds of rural communities. It's still a great crop as far as profitability goes, but it is expensive to invest in. Now we're seeing greater flexibility with growers. The important thing as far as we're concerned is keeping growers in business,” Green says.

Dark tobacco is now the star in Tennessee and Kentucky, with good yields and higher prices than burley. With an increase in demand, dark tobacco acreage has jumped since the 2004 federal quota buyout, says Andy Bailey, an Extension dark tobacco specialist.

"It's such a great crop at this time. There's more expertise and expense in curing it, but it is not a whole lot different than burley to grow,” Green says.

Kentucky's tobacco income rose 13% in 2008 to $375 million, the most since the end of the federal program. The state's dark tobacco acreage increased 40% in 2008, giving a 6% boost to the state's total tobacco crop, says Will Snell, University of Kentucky ag economist.

"There are a lot of interesting things going on in tobacco right now. Amish farmers in Pennsylvania are interested in burley. Dark tobacco is being tried in new areas. Cigar tobacco is getting a look in western Kentucky. It's an open market now,” Green says.

You can e-mail Charles Johnson at cjohnson@farmjournal.com.

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