Prices have tobacco farmers cashing in BY CHRIS TORRES, Lancaster Farming
There's only a little bit of tobacco still hanging in Lloyd Reiff's barn in Lititz.
This is the time of year when tobacco leaves, which have been air-cured for months on hundreds of Lancaster County farms, start going to market.
For Reiff, 2012 has been a good year. Not only did his crop do well, the prices are good too.
"It's been fairly well this year," he said modestly.
Pennsylvania's tobacco growers produced 22.98 million pounds of tobacco in 2012, according to data from the National Agricultural Statistics Service, or NASS.
That's more than double what was produced as recently as 2005, when production hovered around 11 million pounds.
Dennis Hess, a buyer for Tri-Leaf Tobacco Co. in New Holland, which contracts with 600 growers in the state, said hot, dry conditions this past summer, coupled with rains coming at the right time, will pay off for farmers.
"This past year was one of the best years out there. Tobacco loves it hot. The hotter, the better," Hess said.
And with other factors, such as increased demand for burley tobacco, the kind used in cigarette manufacturing, and more competition among buyers, farmers are cashing in on good prices.
"The farmer has seen a big increase in his profit per acre," Hess said.
Burley tobacco is fetching an average of $2.05 a pound, which Hess said is 10 to 15 cents more than farmers have received for the crop in the past.
Even though tobacco growing has always been synonymous with Lancaster County, especially in the Plain Sect community, burley tobacco is a fairly new arrival.
Up until 2005, Pennsylvania growers weren't allowed to grow burley tobacco, which is mostly a product of the South.
The ban here was rooted in a federal quota system that controlled how much of it could be grown in a given area.
Farmers here still grew Pennsylvania tobacco, also known as type 41, and Maryland tobacco, aka type 609.
Each served its own purpose, with 41 going mostly for cigars and chews, and 609 going mostly for cheap cigarette filler, Hess said.
Once the quota system was abolished by Congress, Pennsylvania farmers were free to grow burley, which is sold mostly to large cigarette manufacturers such as Phillip Morris.
Since then, the state's production of burley has taken off, going from 4.84 million pounds in 2005 to 11.5 million pounds this past year.
Type 41 and 609 production also increased, but at a slower pace.
The greater production comes as the stigma of smoking and the price of cigarettes have largely led to a decline in tobacco consumption in the U.S.
It's seen a 27.5 percent drop for all tobacco products between 2000 and 2011, according to an August report by the Centers for Disease Control.
But worldwide use of tobacco is on the rise and considered an epidemic by the World Health Organization.
This past spring, a new company, Japan Tobacco International, which bought the international arm of R.J. Reynolds in 1999, came onto the scene in Lancaster County and is working with Tri-Leaf in getting farmers to grow burley tobacco.
Pam Haver, vice president of Tri-Leaf, said she believes the fact that a company other than Phillip Morris is contracting in the area has contributed greatly to the higher prices.
Tri-Leaf owns and operates a delivery station in New Holland.
Haver said while growers were contracted with Tri-Leaf for the 2012 season, they will be contracted directly with Japan Tobacco for the 2013 season, with Tri-Leaf doing the receiving and working with growers on agronomic issues.
Burley tobacco has been a godsend for Reiff, who said he started growing it when the market became available to Pennsylvania farmers.
"The 609 market was depressed at the time," he said. "When the burley came in, the price for 609 was just not worth it. That's why we switched."
Even though he grows only eight acres of burley, it's fetching 25 cents more than the type 41 he also grows, which is going for $1.80.
That's still more than what growers have received in the past for type 41, which has ranged from $1.39 to $1.73 a pound between 2005 and 2011, according to NASS.
For a Plain Sect farmer just outside Ephrata, who asked that his name not be published, last year's crop has been exceptional, unlike 2011, when September rains forced him to throw away much of his crop.
His last load of tobacco from the 2012 season went on a truck in recent days.
"That's about all we do. That's our main cash crop. Tobacco is paying our farm off," he said. "Pretty soon I have to start over again and start seeding again."
Extension agronomist Jeff Graybill said growing burley is actually easier in some ways than growing type 41 or 609.
With burley, "you're not looking for high-quality leaf. Most goes for cigarette filler," he said. "They are looking for the right nicotine content."
Because burley tobacco is usually started in a greenhouse, it's also created a new market for greenhouse owners who sell transplants to the tobacco growers, Graybill said.
For more agricultural news from Lancaster Farming, go to LancasterFarming.com.