Tobacco Receiving Season Finishes Strong

3/8/2014 7:00 AM
By Philip Gruber Staff Writer

Another crop of tobacco is coming to market, and people around the industry like what is coming out of the barns.

On Tuesday, Eric Moser was busy stripping tobacco 100 lots at a time on his Elizabethtown farm.

The heat from the wood stove, and a little water, allow the leaves to soften a little under plastic, he said.

The crop looks great, but “the weather’s been really hard on us” during the drying process, he said.

This is Moser’s first crop of tobacco for use as cigar wrappers, and he has been pleased with the results.

“The quality this year has been very good,” said Dennis Hess, a buyer for Trileaf Tobacco Co. in New Holland, Pa.

The leaves this year were generally a little lighter than last year’s, though 2012 was one of the heaviest crops in memory, Hess said.

When a lot of rain falls, as happened early in 2013, the leaves tend to grow thinner, generating less weight, Hess said.

“It stopped raining just in time to avoid a lot of disease problems, so it was a fairly good quality year,” he said.

Farmers in southern Lancaster and Chester counties got more rain than those north of Route 30, Hess said. As a result, some growers in the north had weights similar to 2012’s, while some tobacco drowned in the Southern End.

“Because of the large size of the plants and the wet fall weather, there were some challenges getting it dried down properly,” Penn State Extension educator Jeff Graybill said.

Drying problems can result in shed burn, a discoloration of the leaves, and shed mold, both of which can reduce the quality, Graybill said.

The tobacco market has picked up in Pennsylvania since 2005, when deregulation allowed farmers to plant burley, a standard cigarette tobacco, for the first time.

“This year and last, everything got first quality because the demand is so great,” Hess said.

Burley is now more common in Pennsylvania than the traditional Pennsylvania type 41 and Maryland type 609 varieties.

The state produced 12.2 million pounds of burley in 2013, compared with 4.3 million for the Pennsylvania variety and 4.7 million for the Maryland type, according to the USDA’s National Agricultural Statistics Service, or NASS.

Burley’s footprint continues to grow, too. Farmers grew 6 percent more acres of it than they did in 2012, while type 41 production dropped 10 percent and type 609 fell 30 percent, according to NASS.

The average price is about $2.07 to $2.08 per pound, up from last year’s average of $2.05. There has been more variability in price this year, Hess said.

Hess attributes that increase to the coming of burley. “Year after year, (the price) has consistently increased” since the variety’s introduction, he said.

Some farmers who got out of tobacco are thinking of getting back into it because of the prices, he said.

Many farmers who formerly grew Maryland type 609 have switched to burley, which has fewer problems with greening when stepped on or damaged by the wind, Hess said.

“There has been a lot of advertising for new contracts this year, which means that some companies are looking for more acres,” Graybill said.

Perhaps as many as 200 to 400 acres could be added, mostly in burley and Maryland type 609, a cigarette filler, he said.

Typically, high prices have been followed by steep price drops, but with the strong international demand, a big price drop seems unlikely in the near term, Hess said.

The quality of Lancaster-grown burley has consistently been among the best in the country and world, Hess said.

“When you’ve got a good thing, why, people want it,” he said.

Companies like Trileaf start receiving tobacco around Thanksgiving. Not much comes in for the first six or eight weeks, but some farmers like the opportunity to report the income on their current tax returns, or just want to get in some money before Christmas and the end of the year, Hess said.

January and February are the main receiving months. This week marked the end of the main receiving period, though Trileaf will probably have a cleanup day later this month for farmers to bring in the rest of their crop, Hess said.

Burley is graded on color. “The longer it hangs, the darker it gets,” and darker leaves bring higher prices, Hess said.

Burley seems to make farmers the most money per acre, though Pennsylvania type 41 can also be quite lucrative. Type 41 leaves are used for cigar wrappers — as long as they are not damaged by hail or other problems during the growing season.

“Wrappers are a gamble,” Hess said.

The strong market is also helping sales of tobacco equipment. Hess recently saw tobacco lath go for $52 per hundred, the highest he had ever seen.

Usually these pieces of wood, used to hang tobacco, sell in the mid-$40s per 100, he said.

A company has even started to make new lath. Many farmers prefer older, broken-in laths because the tobacco slides along them better, Hess said.

Farmers are investing in drying greenhouses, which give burley a rich, dark color. “The tobacco coming out of there is really, really nice,” Hess said.

Greenhouses are also cheaper than drying sheds and are not taxable structures. The demand for them has helped local greenhouse builders, Hess said.

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