2006 tn-va-nc tobacco survey & perspectives on post-buyout market information needs
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CCAAAAPPAgricultural Policy Analysis Center - University of Tennessee - 310 Morgan Hall - Knoxville, TN 37996-4519
www.agpolicy.org - phone: (865) 974-7407 - fax: (865) 974-7298
2006 TN-VA-NC 2006 TN-VA-NC Tobacco SurveyTobacco Survey
& Perspectives on& Perspectives onPost-Buyout MarketPost-Buyout MarketInformation NeedsInformation Needs
Tobacco Summit
Charleston, SC
October 7, 2006
Kelly Tiller
CCAAAAPP
Change in Total Tobacco AcreageChange in Total Tobacco Acreage
• Still not back to pre-buyout acreage– North Carolina almost
back to 2004 level
• Burley generally down more than flue
• Burley expansion into Pennsylvania
• Florida down 72.5%
2004 to 2006
1.7%
-72.5%
-21.7%
-27.8%
-3.2%
10.3%
-1.3%
-44.6%
97.5%
-18.5%
-33.9%
-32.0%
CCAAAAPP
Change in Total Tobacco AcreageChange in Total Tobacco Acreage
• Flue-cured states’ acreage up– Florida way down
• Mix in burley– Kentucky up some– Tennessee down 13%– Pennsylvania up 58%
• Several states no longer reported
-2.0%
-56.0%
12.5%
4.1%
0.8%
18.5%
22.2%
-8.8%
58.0%
10.0%
-12.9%
17.7%
2005 to 2006
CCAAAAPP
Change in Flue-Cured AcreageChange in Flue-Cured Acreage
2005 to 2006
-72.5%
-21.7%
-0.9%
-18.5%
-26.1%
2004 to 2006
-56.0%
12.5%
22.0%
10.0%
21.4%
CCAAAAPP
Change in Burley AcreageChange in Burley Acreage
2005 to 20062004 to 2006
-31.1%
10.3%
-14.9%
-44.6%
-41.7%
-52.5%4.3%
18.5%
33.3%
-8.8%
-17.6%
0.0%
150.0%
CCAAAAPP
2006 TN-VA-NC Burley Survey2006 TN-VA-NC Burley Survey
• Mail-based survey of 6,000 burley growers in traditional areas of Tennessee, Virginia, and North Carolina– Sample drawn from burley active grower buyout contract
recipients
• First available market and production information post-buyout
• Surveys completed May 2006
• 813 completed responses, preliminary results available
• Follow-up Extension agent survey Dec.
CCAAAAPP
Respondents Growing in ‘06Respondents Growing in ‘06
0
100
200
300
400
500
600
700
800
900
Total TN VA NC
Nu
mb
er
of
Re
spo
nd
en
ts
46%47%
52% 40%
No
Yes
CCAAAAPP
Average Planted AcresAverage Planted Acres
0123456789
10
Ave
rag
e P
lan
ted
Acr
es
2004 2005 2006
CCAAAAPP
’’06 Average Acreage06 Average AcreageNo
53%Yes47%
0123456789
10P
lan
ted
Acr
es
All TN VA NC
CCAAAAPP
Last Year Actively GrowingLast Year Actively Growing
0
50
100
150
200
250
# R
esp
on
den
ts E
xiti
ng
2002 2003 2004 2005
3%
11%
62%
23%
CCAAAAPP
2006 Prices, Tennessee2006 Prices, Tennessee
0
20
40
60
80
100
120
140
20
06
Pric
e D
istr
ibu
tion
(fr
eq
)
< $
1.3
5
$1
.35
-9
$1
.40
-4
$1
.45
-9
$1
.50
-4
$1
.55
-9
$1
.60
-4
$1
.65
-9
$1
.70
-4
> $
1.7
4
CCAAAAPP
2006 Prices, Virginia2006 Prices, Virginia
0
5
10
15
20
25
30
35
40
20
06
Pric
e D
istr
ibu
tion
(fr
eq
)
< $
1.3
5
$1
.35
-9
$1
.40
-4
$1
.45
-9
$1
.50
-4
$1
.55
-9
$1
.60
-4
$1
.65
-9
$1
.70
-4
> $
1.7
4
CCAAAAPP
2006 Prices, North Carolina2006 Prices, North Carolina
02468
1012141618
20
06
Pric
e D
istr
ibu
tion
(fr
eq
)
< $
1.3
5
$1
.35
-9
$1
.40
-4
$1
.45
-9
$1
.50
-4
$1
.55
-9
$1
.60
-4
$1
.65
-9
$1
.70
-4
> $
1.7
4
CCAAAAPP
Likelihood of Producing in ‘07Likelihood of Producing in ‘07
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
% o
f R
esp
on
den
ts
DefinitelyYes
ProbablyYes
Not Sure ProbablyNot
DefinitelyNot
Among respondents producing tobacco in 2006 …
CCAAAAPP
Expected Acreage Changes in ‘07Expected Acreage Changes in ‘07
020406080
100120140160180200
# R
esp
on
den
ts
Up>50%
Up25%-50%
Up25%
Same Down25%
Down25%-50%
Down>50%
Among respondents producing tobacco in 2006 …
CCAAAAPP
Why NOT Producing in ’07?Why NOT Producing in ’07?
• Not profitable enough (88%)
• Shortage of labor (63%)
• Age, near retirement (52%)
• Too risky without a price guarantee (37%)
CCAAAAPP
Likelihood of ProducingLikelihood of Producing
Probably Not
Definitely Not
Not Sure
Definitely Yes
Probably Yes
2007 2010
2015
Among respondents producing tobacco in 2006 …
CCAAAAPP
Other Farm EnterprisesOther Farm Enterprises
0
10
20
30
40
50
60
70
80
Per
cen
tag
e
HayBee
f
Gra
in
Fr & V
eg
Dark F
ire
Dark A
ir
Dairy
Among respondents producing tobacco in 2006 …
CCAAAAPP
Top Sources of InformationTop Sources of Information
1. County Extension agents
2. Farm magazines / newspapers
3. Neighbors / other farmers
4. Researchers / research publications
CCAAAAPP
Total Gross Farm Receipts from TobaccoTotal Gross Farm Receipts from Tobacco
0%
5%
10%
15%
20%
25%
30%
% o
f R
esp
on
den
ts
None < 10% 10-24%
25-49%
50-74%
75-99%
All
Among respondents producing tobacco in 2006 …
Average = 57%
CCAAAAPP
Net Farm Income from TobaccoNet Farm Income from Tobacco
0%
5%
10%
15%
20%
25%
30%
% o
f R
esp
on
den
ts
None < 10% 10-24%
25-49%
50-74%
75-99%
All
Among respondents producing tobacco in 2006 …
Average = 52%
CCAAAAPP
Biggest Challenges Next 2-5 YearsBiggest Challenges Next 2-5 Years
• Contract prices too low (66%)
• High costs of hiring labor (58%)
• High costs of nitrogen fertilizer (52%)
• Shortage of affordable and/or legal labor (35%)
• High costs of other production in puts (26%)
CCAAAAPP
Investment PrioritiesInvestment Priorities
1. Curing barns
2. Upgrading equipment or new equipment
3. Market prep facilities and baling equipment
4. Acquiring more good land
5. Field curing structures
CCAAAAPP
Future Industry Information NeedsFuture Industry Information Needs
• Standardized and timely reporting of acreage, yields, production– Geographically disaggregated– Traditional and non-traditional areas
• Market prices
• Domestic and export use, disappearance, stocks
• Producer information– Operation, costs, challenges/issues, profiles
• Publicly available and accessible
CCAAAAPP
For More Information … For More Information … www.agpolicy.orgwww.agpolicy.org
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