Current News

The next two months will be a critical period for the tobacco family. We are at a crossroads where the direction we take will affect our livelihood for years to come. Will Rogers once said "We know lots of things we used to didn't know, but we don't know anyway to prevent them from happening." Tobacco farmers need relief from high lease rates, decreasing demand for their product and the quota reductions. The buying companies say we must remove the non-value-added cost from our production expense. To accomplish these goals is complex, but possible to achieve.

In the forefront and quickly moving forward is the issue of quota transfer to active tobacco farmers (buyout). But at what cost to our farmers and their communities? There are those who want to see the pendulum swing back to the days of no controls. There are those who are seeking to destroy the tobacco program in order to eliminate the farmers voice in the market place. There are those who would like to tear down the entire U.S. tobacco industry.

The Tobacco Quota/Price Support Program has provided farmers economic stability since its inception in 1938. It has been the most successful commodity program ever administered by USDA. The tobacco program was developed by our forefathers to provide a safety net and insure a viable income for themselves and generations of tobacco farmers to come. Yet, in some tobacco producing states, there are those in leadership positions that say this safety net should be removed leaving farmers and future generations at the mercy of the market place. Are they making these statements for personal gain and not looking at the total picture?

"Our future is today!" There will be a flurry of tobacco bills introduced into Congress during the coming months regarding a quota transfer program. Many of these bills will address changes in production, marketing and the program to insure continued profitability for our farmers in the global market. We must work diligently to adjust to this changing environment to become stronger and more efficient. We must have the resolve to make the necessary changes to strengthen our program and marketing system and become more competitive in the export market. To accomplish these goals, the entire tobacco family must be unified and willing to work together to embrace the future with positive solutions.

World history indicates that many civilizations have collapsed after a series of progressions--from bondage to spiritual faith; from spiritual faith to great courage; from great courage to abundance; from abundance to selfishness; from selfishness to complacency; from complacency to apathy; from apathy to dependency; from dependency back into bondage. Have we, as tobacco farmers, become selfish, complacent, apathetic, and dependent on others to run our business?

Today, is the time we must stand united to face the challenges that lie ahead. Individual efforts on behalf of one organization cannot win in the game of success or failure- it takes teamwork.

My challenge to you today is not to become selfish, complacent, apathetic, and dependent on others. Let us work together to strengthen our farmer's position in the global market for centuries to come.

"Our future is today!"

George Marks
President, Burley Stabilization Corporation

Burley Recommendations For A Quota Transfer:

On February 6, 2002 the burley leadership met in Louisville, KY to finalize a proposal to recommend to the farm groups in burley and flue-cured areas. The proposal includes the following:

*Support price is negotiable relative to funds made available for the quota adjustment program with a minimum of $8.00 per pound for quota owners, based on 2001 basic quota. Growers and tenants would receive $4.00 per pound (tenants portion to be divided through the relative landlord/tenant arrangement). The Grower portion will be based on average of marketings using years 1999, 2000 and 2001.

*Payment will be paid over a 3-year time period.

*Growers would have the pounds (effective quota) that they were allowed to grow in the 2001 crop year, including pounds that are leased in states that have cross-county leasing. Disaster pounds would be excluded.

*Only growers may retain production rights. (A grower is defined as an individual who has 100% risk and 100% material participation in the production of tobacco).

*Quota cannot be leased or sold. Quota must be grown two of three years or would be lost. Quota may be transferred to an immediate family member.

*Any poundage lost or given up under the tenant or grower package would go to a pool to be distributed, with preference to young or beginning farmers within that county or state, with preference given to the county and then the state.

*Program would be funded with a user fee charged to all tobacco products sold in the U.S. and its territories.

A motion passed unanimously in support of this proposal. Groups present were: Burley Tobacco Growers Cooperative Association, Kentucky Farm Bureau, Tennessee Farm Bureau, Burley Farmers Advisory Council, Council for Burley Tobacco and Burley Stabilization Corporation.

2001/02 Burley Marketing Season Report:

The 2001-2002 burley tobacco auction season ended after posting the lightest sales volume and the second highest general average on record. The light volume at auction was due to the high volume of contract sales. Auction sales opened November 13, 2001 and final sales took place February 21, 2002 for a total of 44 sale days, three more than last year. Twelve sets of buyers were utilized this season, down from the 30 sets last season.

Belt wide, auction gross sales totaled 123,558,080 pounds for an average of $194.64 per hundred weight (per cwt.) and total value of $240,487,385. Last season 245.6 million pounds were marketed for an average of $195.47 per cwt. Resales totaled 10,205,760 pounds, or 8.3% of gross auction sales. Season net (producer) auction sales totaled 113,352,320 pounds, compared with 223.5 million pounds last year. Combined gross auction and contract sales totaled 348,190,497 pounds averaging $197.46 per cwt. for a total value of $687,550,311.

Nearly two-thirds of the estimated crop production was marketed through 32 contract centers in 22 markets. Sales at contracting points totaled 224,632,417 pounds, returning $447,062,926, for a seasonal average of $199.02 per cwt. Last year 87.5 million pounds were sold under contract, which returned $198.41 per cwt. Contract centers begin accepting tobacco on October 29, 2001 and closed on February 28,2002 after, 70 sale days. Contract centers in Kentucky received 167,844,861 pounds for an average of $199.17 per cwt. Contract centers in Tennessee and southwest Virginia received 56,787,556 pounds for an average of $198.58 per cwt.

In heavy volume auctions, a range of $190 to $194 covered lugs and cutters, while $193 to $207 was the span for leaf and tip grades. A top average of $207 was reached for several tip grades, and $79 was the low bid average offered for non-supported grade N2G. The majority of bid averages were either $1 or $2 above their support levels. The Burley Cooperatives received 12,406,791 pounds, or 11.0 percent of net sales. Last season loan receipts totaled 19.3 million pounds, or 8.7% of net sales.