An Overview
The November 2000 crop estimate was 625 million pounds for U.S. flue-cured
tobacco, down from 656 million in 1999. Harvested acreage was estimated
at 254,000 for the United States, down from 303,800 in 1999. The November
crop estimate for North Carolina was 423 million pounds, down from
436 million pounds in 1999. North Carolina's harvested acreage was
estimated at 168,000 acres, down from 200,000 in 1999. Average yield
per acre was estimated at 2,462 pounds for the United States, up from
2,162 in 1999. Average yield for North Carolina was 2,518 pounds,
up from 2,183. The season average price for the 2000 crop of flue-cured
tobacco was about $1.79 per pound. Stabilization purchased about 5
percent of the crop.
Tobacco Programs
The 2000 effective flue-cured tobacco quota reached another historical
low at 561 million pounds, down from 671 million pounds in 1999.
The 2000 basic quota was 543 million pounds, down from 668 million
in 1999 and a 44 percent decline since 1997.
As the 2000 markets closed, Stabilization held about 202 million
pounds in inventory, 102 million pounds over the required reserve.
At the time of writing, efforts were in progress in Congress to
obtain forgiveness from the government for the 1999 loan stocks
of 88 million pounds. This would reduce the quota formula adjustment
for Stabilization stocks from -102 to -14 million pounds.
The national basic quota is the sum of purchase intentions announced
on December 1, a three-year average of unmanufactured exports, and
an adjustment for the difference between Stabilization inventories
and the required reserve level. Purchase intentions for the 2000
quota were 286 million pounds. The export average for the 2000 quota
was 334 million pounds but was expected to decline to less than
300 million pounds for the 2001 quota.
Outlook
Disappearance of flue-cured tobacco for 1999 totaled about 699
million pounds, down from 834 million pounds the previous season.
Domestic use declined from 492 million pounds in 1998 to 435 million
in 1999. Unmanufactured exports declined from 342 million pounds
in 1998 to about 263 million pounds in 1999.
U.S. cigarette production in 2000 was expected to be about 580
billion pieces, down from 637 billion in 1999. Both cigarette exports
and cigarette production for the domestic market continued to decline.
Cigarette exports were expected to be around 143 billion cigarettes,
down from 177 billion in 1999. Production for the domestic market
was expected to be about 420 billion cigarettes, down from 435 billion
in 1999 and 465 billion in 1998.
The Tobacco Budget
The budget that appears in Table 1-2 represents costs and returns that are achieved by many
growers. It is not an average budget in any sense and should not be
construed as representing the average cost of production. It does,
however, give you something by which you can check your own costs
and see where you may be doing better than this budget or where you
may find room for improvement.
Table 1-1. Flue-Cured Tobacco, U.S.
|
Year |
Basic
Quota |
Effective
Quota |
Producer
Sales |
Total
Supply |
Domestic
Use |
Exports |
Total
Disappearance |
Average
Market
Price |
Price
Support
Rate |
Stabilization Receipts |
Acres
Harvested |
Yield |
U.S.
Cigarette
Output |
|
|
--------------------------------------------------
(Mil. lb) -------------------------------------------------- |
($/lb) |
($/lb) |
(Mil. lb) |
(% crop) |
(1,000) |
(lb/a) |
(billions) |
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000 |
877
878
892
892
803
934
874
974
814
668
543 |
936
891
899
890
798
925
944
1,020
820
671
561 |
920
882
901
892
807
854
897
985
815
654
563 |
2,228
2,098
2,125
2,087
2,102
2,041
2,063
2,068
1,888
1,786 |
609
471
509
433
569
531
555
543
492
435 |
403
403
420
359
345
345
391
334
342
263 |
1,012
875
929
792
915
875
946
877
834
699 |
1.67
1.72
1.73
1.68
1.70
1.79
1.84
1.72
1.75
1.74
1.79 |
1.488
1.528
1.56
1.577
1.583
1.597
1.60
1.62
1.63
1.63
1.64 |
74
50
81
204
98
12
0
160
82
136
27 |
8
6
9
23
12
1
0
16
10
21
5 |
417
403
401
400
360
386
422
454
367
304
254 |
2,253
2,265
2,257
2,217
2,420
1,933
2,151
2,144
2,117
2,162
2,462 |
685
706
684
713
669
746
755
733
713
637
580 |
|
Source: Various tables in Tobacco Situation and Outlook
Report, September 2000, USDA, Economic Research Service. Most
of the data for 2000 are estimates.
Table 1-2. Flue-Cured Tobacco Revenue and Cost
Estimates (per acre) for 40 Acres of Production
|
Category |
Units |
Price |
Quantity |
Value |
Your
Value |
|
Receipts
|
|
Operating Inputs:
Lime Applied
FC Tobacco Seed
Custom Fumigation
12-6-6, Bagged, P.B.
16-0-0, Bagged, P.B.
Blue Mold Cntl.,P.B.
Insecticide, P.B.
Fld. Blue Mold
Nematicide/Insect.
Herbicide, Preplant
8-8-24, Bagged
16-0-0, Bagged
Insecticide
Contact, Suckers
Systemic, Suckers
Loc. Systemic, Suckers
Cover Crop
Curing Fuel
Electricity
Crop Insurance
Building Insurance
Selling Charges
Market Assessment
Tractor Fuel and Lube
Tractor Repair Cost
Mach. Fuel and Lube
Mach. Repair Cost
Equip. Repair Cost
Total Operating Cost
|
Tons
Oz
Sq yd
Cwt
Cwt
Gal
Lb
Gal
Acre
Gal
Ton
Ton
Lb
Gal
Gal
Gal
Acre
Gal
Acre
$
Acre
$
Lb
Acre
Acre
Acre
Acre
Acre |
30.00
58.76
30.60
10.13
11.82
153.82
11.02
153.82
89.91
29.92
277.20
257.25
11.02
11.55
13.60
51.97
12.62
0.99
51.38
0.033
83.20
0.03
0.01
|
0.405
0.15
0.80
0.40
0.04
0.004
0.016
0.375
1.00
0.187
0.25
0.088
2.00
4.50
1.50
0.50
1.2
258.00
1
2898.00
1
3910.00
2300.00 |
$12.15
8.81
24.48
4.05
0.47
0.62
0.18
57.68
89.91
5.61
71.90
20.69
22.04
51.98
20.40
25.99
15.14
256.11
51.38
95.63
83.20
117.30
23.00
20.12
18.06
129.64
70.63
55.05
$1352.22 |
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________
________ |
|
Returns to Land, Labor, Capital, Machinery,
Quota, Overhead, and Management |
$2557.58 |
________ |
|
Capital Costs
Annual Oper. Cap.
Tractor Investment
Machinery Investment
Equipment Investment
Total Interest Charge
|
|
0.09
0.10
0.10
0.10 |
455.74
212.63
550.81
1160.44 |
41.02
21.26
55.08
116.04
$ 233.40 |
________
________
________
________
________ |
|
Returns to Land, Labor, Machinery, Quota,
Overhead, and Management |
$2324.18 |
________ |
|
Ownership Cost (Depreciation, Taxes, Insurance)
Tractor
Machinery
Barns and Equipment
Total Ownership Cost
|
$
$
$ |
|
|
16.68
86.25
150.59
$ 253.52 |
________
________
________
________ |
|
Returns to Land, Labor, Quota, Overhead,
and Management |
$2070.66 |
________ |
|
Labor Cost:
Machinery Labor
Other Labor
Total Labor Cost
|
Hr
Hr |
$ 6.75
5.50 |
23.42
121.07 |
158.08
665.88
$ 823.96 |
________
________
________ |
|
Returns to Land, Quota, Overhead, and
Management |
$1246.70 |
________ |
|
Prepared by G.F. Peedin and D. Smith,
Crop Science Extension Specialists, and A. B. Brown, Extension
Economist, November, 1996. |
|