Tobacco Production Overview

Tobacco Types Flue-cured –cured with heat (7-8 days) Burley – air-cured (several months) Dark air-cured and Dark Fire-cured Cigar Oriental

2010 Estimated World Tobacco Production North America South America AfricaAsiaEurope Million Kg Flue- cured Burley ULNA Oriental: 272 M Kg Dark Air-Cured: 126 M Kg

Federal Quota Buyout October, 2004 Quota had value (bought and sold since the 30’s); License to Produce Tobacco Growers and Quota Owners Paid for Quota and Program dissolved Fully Funded by Tobacco Companies 10 annual payments $7/lb owned and $3/lb grown

2004 Quota Determination Change Purchase Intentions year Export Average Reserve Stock Adjustment Sec. Of Ag. Adj % Basic Quota (- 10%)

NC Burley Tobacco Production NCDA-CS

Post Buyout Burley Tobacco North Carolina Production –2004: 4,700 acres (Pre-buyout) –2005: 3,000 acres –2006: 4,200 acres –2007: 4,000 acres –2010: 2,000 to 2,500 acres NCDA-CS

2009 Flue-cured Tobacco Production NCDA-CS

Post Buyout FC Tobacco North Carolina Production –2004: 150,000 acres (Pre-buyout) –2005: 123,000 acres –2006: 155,000 acres –2007: 164,000 acres –2010: 170,000 acres Price –2004: $1.86 per pound (Pre-buyout) –2005: $1.48 per pound –2010: $1.72 per pound NCDA-CS

Total Tobacco Value by State 2006 NC: $496 M KY: $331 M TN: $93 M SC: $72 M VA: $71 M NCDA-CS

Flue-cured Tobacco Production 2009 NC: 418 Million pounds VA: 40 Million pounds SC: 37 Million pounds GA: 21 Million pounds FL: N/A USDA

Flue-cured Variable Costs Transplants$210 Lime $17 Fumigation $125 Fertilizer $ Herb. and Fung. $120 Insecticides $36 Sucker Control $125 Cover Crop $15 Curing Fuel $350? Electricity $125 Crop Ins. $65 Bailing Supp. $8 Machinery $330 Labor $ Interest $35

Fixed Costs Tractor/Machinery $320 Barns and Equipment$170

Total Costs = $3,500 2,500 lbs / Acre X $1.70 = $4,250 –NET RETURN = $750 Net Return