Leaf News

UNITED STATES

What Hurricane Dorian Did to the U.S. Tobacco Crop

Some tobacco only suffered leaf loss. Photo taken near Wilson, N.C.

The whipping action of the intense winds caused a chemical reaction in the leaves that lead to premature ripening and subsequent loss of value. Photo taken near Wilson, N.C.

RALEIGH—The tobacco farmers of Eastern North Carolina and the Pee Dee section of South Carolina were wondering what they had done to deserve divine retribution. How else to describe three hurricanes in only 12 months?

Dorian arrived in the Carolinas on September 6 and punished the tobacco in the field by blowing some fields flat, blowing leaves down in others, and generally whipping the remaining leaves so that they began a heightened ripening process that lead to leaf deterioration.

These were the same effects that Hurricane

Florence had caused. But Dorian’s damage was much less, largely because Dorian only stayed in the tobacco-producing area for about a day.

Only 10 to 15 percent of the S.C. tobacco crop (all flue-cured) was still in the field when Dorian arrived, said S.C.’s Extension agronomy agent responsible for the tobacco-growing area. “There was not much blowing off of leaves, but there was a lot of over-ripening due to the plant’s production of ethylene.”

Farmers tried to harvest and barn what they could, but he predicted that three quarters of the tobacco that was in the field on the sixth would eventually be abandoned. If that occurred, we would be talking very roughly about a loss in the range or 20,000,000 pounds.

In North Carolina, farmers were harvesting as fast as they could as of September 15. In recent years, the flue-cured harvest in this area has lasted until October 21 or later, but one Extension specialist predicted that all harvestable tobacco would be out of the field by October 1. That would reflect very hasty gathering to salvage as much leaf as possible from deterioration.

To get the kind of leaf quality farmers here try to achieve, they would have needed until at least October 15, the specialist said. About 16 counties had at least some effect of Dorian. The worst damage was in the Coastal Plain, east and south of Raleigh. There was some damage in the northeast but considerably less.

In the hardest hit areas, crops sustained enough wind damage that a complete loss of what remained was possible. What didn’t get blown off or blown flat was likely to turn loose from or die on the stalk.

But in the Piedmont, Dorian had hard- ly any effect, said an auction warehouseman in the Winston-Salem area. “We didn’t get much rain from Dorian,” he said on September 15. “As a matter of fact, we still need water.” Harvest is half complete in the Piedmont and will last into October.

The Tobacco Growers Association of North Carolina issued an estimate that put the crop loss caused by Dorian in N.C. at 50 million pounds. That is based on the estimate that 60 percent of the crop remained in the field when the storm arrived and that 25 to 30 percent was destroyed or rendered unmarketable.

How would it affect the market? “The demand is soft—there is too much production worldwide, and our U.S. leaf is challenged by the strong dollar relative to global options,” said the statement from the growers association. “We very likely had over produced our domestic acres already, so the 50 million destroyed in the storm brings us closer to actual demand. That isn’t to say we would not have sold the entire larger crop, but at what prices?”

Advice for Storm Struck Tobacco Growers

Tobacco farmers were faced again with what seems to have become a perennial question each year in the Carolinas: Should they harvest hurricane-damaged leaf?

“Give full consideration in advance to what you are about to harvest,” said Graham Boyd, executive vice president of the Tobacco Growers Association of N.C. “If it isn’t good quality going in the barn, it most certainly will not be good coming out. Poor quality [leaf] has already demonstrated it has no market value.”

Carefully consider the costs associated with salvage harvesting your crop on a salvage basis, he said. “Why would you harvest severely damaged tobacco and spend 92 cents per pound to harvest, cure, bale and deliver it, only to have it rejected? We do not need this inferior quality competing with good leaf and hurting our posture for the worlds ‘premium leaf’. And, you will lose revenue in the process.”

Damaged tobacco with zero market value should be destroyed, he advised.

Put a very sharp pencil on the numbers, he said. “If your insurance adjuster will release your acres, you may want to trust his evaluation of damage and stop spending on a crop that will result in increased negative returns.”

But farmers who decided to harvest storm-damaged leaf were advised to re-initiate harvest as soon as possible since windblown leaves senesce (dry up and doe) quickly when hurricanes arrive later in the growing season.

“Leaf holding-ability is often compromised due to the natural presence of the plant growth regulator ethylene, which hastens the ripening process,” said Matthew Vann, state agronomist for tobacco in North Carolina. “The best information available suggests that the optimum window for harvest is seven to 10 days after the storm clears.”

Yield, quality, price and value were greatest when tobacco was harvested two days after the storm, he said. Following the first harvest timing, remaining plots were subsequently harvested every 10 days, which is the approximate amount of time required to complete a curing cycle. In the second harvest interval, cured leaf yield began to decline.

USDA Projects a Smaller Crop

Even before Dorian passed through, the USDA’s Crop report of September estimates production in most tobacco states was continuing downward compared to last year. USDA’s numbers that flue-cured production would total 304 million pounds, down three percent from last month and 10 percent from 2018 (but that will certainly be lower thanks to the hurricane). Burley production was expected to total 96.0 million pounds, down nine percent from the last month and four percent from last year. Among the individual states and types, with percentage change from 2018:

FLUE-CURED—North Carolina, 236 million pounds, down six percent.·Virginia, 33 million pounds down 21 percent. Georgia, 18 million pounds down 33 percent. South Carolina, 17 million pounds, down 23 percent.

BURLEY—Kentucky, 81 million pounds, up two percent. Tennessee, 6.4 million pounds, down 29 percent. Pennsylvania, 6 million pounds, down 31 percent. Virginia, 1.26 million pounds, down 16 percent. North Carolina, 640, 000 pounds, down 43 percent.

OTHER TYPES—Fire-cured, 46.7 million pounds, down 20 percent. Dark air- cured, 28 million pounds, up 7.7 percent. Pennsylvania seedleaf, 5 million pounds, down nine percent. Southern Maryland/Pennsylvania, 2.2 million pounds, down 28 percent.

U.S. Leaf Prices: Not Competitive

RICHMOND—“Flue-cured crop sizes were larger in several key origins this year,” said George Freeman, President/ CEO, of Universal Corporation.

As part of his presentation of first quarter 2019 results in August, he said, “We believe that the supply of fluecured tobacco exceeds demand. As a result, we are seeing slower movement in flue-cured markets, soft demand, and pressure on margins.”

But it is still very early, and some markets have not opened yet, he said.

“In contrast to the flue-cured crops, burley crop sizes are coming in lower than expected, and we believe that burley supply is in line with demand.”

Demand seems softer for U.S. tobacco, he said.

Currently, U.S. tobacco prices are not competitive in the global marketplace. Additionally, there is pressure on export volumes from the suspension of purchases by China due to the current trade discussions, as well as consistent declining domestic consumption in the United States.

BANGLADESH

Burley Attracts Export Buyers

DHAKA—The 2019 burley market had finished by early September. Demand was driven by the export market with an estimated 90 percent having been slated for export. Rangpur crop quality experienced an improvement on the previous year, due to favorable growing conditions.

Market estimates indicate that there has been a green price increase of four percent in Manikganj and three percent in Rangpur.

Hail & Cotton calculated the crop at 20.6 million kilograms, up from 20 million pounds in 2018.

The flue-cured market had also ended. It was characterized by heavy competition amongst manufacturers for domestic purposes, which resulted in a green price increase of an estimated five percent.

Land and seedbed preparation have commenced for the 2020 season.

Hail & Cotton calculated the crop at 76.7 million kilograms, up from 75 million pounds in 2018

CANADA

No Problems Reported in Southern Ontario

TILLSONBURG—Harvest had gotten under way in Southern Ontario by mid August.

“There are no widespread problems reported to the Canadian Tobacco Research Foundation at this time,” said a report from Mitchell Richmond, CTRF’s Team Leader. “Currently, aphid and hornworm pressure seem to be very limited in most fields. To date, there have been no reports this season of blue mold in Ontario.”

Based on past experiences, harvest might very well be finished by October 1.

DOMINICAN REPUBLIC

Good Quality, Volume Down for Piloto Cubano, Olor, Criollo Crops

SANTO DOMINGO—The 2019 buying season is over and most of the Piloto Cubano/Olor/Criollo tobacco is now under fermentation. Total volumes are small due to the drought, at 4,000 metric tons, compared to 6,500 metric tons the year before.

Overall quality is good, though leaves are smaller in size. In general, there will be a shortage of tobacco and therefore buying prices have increased heavily.

On the other hand, this might encourage farmers to produce increased volumes of tobacco next season.

INDIA

Good Riddance to Vaporizers

HYDERABAD—The recent ban on vaping in India will result in no loss to tobacco farmers, said an Indian growers association.

That is because the nicotine in vaping liquid is not derived from leaf but from tobacco dust, said Murali Babu, General Secretary of The Federation of All India Farmers Association.

“Tobacco dust, which is a residue produced while processing chewing and bidi tobacco, is used as raw material to manufacture nicotine,” he said. “No fresh quantity of tobacco is produced by farmers to extract nicotine.”

“Even if fresh tobacco leaves are used, there is surplus availability [of leaf] to meet the demand for nicotine exports.”

MALAWI

Competition Firm in Medium Quality Styles

BLANTYRE—Offerings at the burley market have predominantly consisted of medium quality flyings, lugs and cutters, as of August 23. There has been a gradual increase of leaf bodied style tobacco deliveries, but, this is still minimal, according to a report from Hail & Cotton.

Competition remains firm in the medium quality lower stalk segment, with increased competition for medium to top quality leaf styles due to lack of availability.

Low demand for gray and over handled styles has resulted in approximately 40 percent of “No Sales” on the auction floors. This has resulted in a slow through-flow of new offerings.

About 70 percent of the Malawi crop had been marketed by late August.

PARAGUAY

Criollo Crop Update

ASUNCION—The 2020 crop is under way. In general, seedlings looked very good in August and were carefully treated against fungi, according to a report from Hail & Cotton. Farmers were experiencing cold, humid days and were awaiting some rain to be able to start transplanting.

There is enthusiasm among tobacco growers because of excellent buying prices in the field. Also, other alternative cultivars are not as profitable compared to tobacco.

Both combined will generate a larger planted area, and production is expected to increase, provided weather conditions remain normal.

ZIMBABWE

Second Consecutive Record Marketings

HARARE—For the second consecutive year, Zimbabwe’s flue-cured marketings set a record in 2019, 256 million pounds compared to 252 million pounds in 2018.