Tobacco production on upswing

Two years after the government buyout, US tobacco acreage and production appear to be on the upswing, at least in some parts of the country, says Kelly Tiller, University of Tennessee Extension economist.

“Looking at overall tobacco production, now that we’re two years from the buyout, overall US acreage and production are increasing. They’re not back yet to those pre-buyout levels, and they’re not expected to be back at those levels in the foreseeable future, but it does appear that things have hit the bottom and have started back up somewhat,” said Tiller at the recent Southern Region Agricultural Outlook Conference in Atlanta.
Most of the tobacco produced in the United States is used in cigarette consumption — about 92 per cent, she says. “It’s important to look at the trends and the cigarette and the tobacco industry in general. It can give us an idea about what we can expect in the near future,” says Tiller.
Looking at what has happened in the past, she says, the production of cigarettes has declined by about 34 percent in the last ten years. But a majority of that has been in a reduction in the export of cigarettes. “This is primarily because a lot of the cigarette manufacturers are finding it more efficient to produce cigarettes overseas than to produce them in the United States and ship them out.”
The brightest spot for the US tobacco industry is in moist snuff consumption, she says. While cigarette consumption has been declining and is expected to continue to decline, the consumption of moist snuff has increased by 41 per cent over the past decade. Per-capita consumption is increasing as well as overall consumption. But a different type of tobacco is used for moist snuff — a dark tobacco rather than Burley or flue-cured. (pi)

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