NC tobacco farms grow in size, shrink in number

sgilman@newsobserver.comMay 12, 2014 

  • The top 10

    Top 10 crops in North Carolina in 2012, by acreage

    1. Soybeans: 156,806,805 acres on 7,021 farms

    2. Corn for grain and silage: 849,670 acres on 5,968 farms

    3. Wheat: 753,713 acres on 4,156 farms

    4. Forage: 643,186 acres on 19,562 farms

    5. Cotton: 580,801 acres on 1,432 farms

    6. Tobacco: 167,443 acres on 1,682 farms

    7. Vegetables: 122,516 acres on 3,283 farms

    8. Peanuts: 105,739 acres on 636 farms

    9. Barley: 16,695 acres on 250 farms

    10. Oats: 13,390 acres on 443 farms

    Source: U.S. Department of Agriculture 2012 census of agriculture

— The roar of a tractor creeping down a furrowed field off Louisburg Road in Wake Forest breaks with the occasional “Hey!” from a farmworker and flurry of whistles from his companions that call the operation to a halt.

Workers quickly clear clogged soil from the implement and resume their work: transplanting tiny tobacco plants from a greenhouse to a field farmed by Jackie Thompson.

“We need for it to stop raining right now so we can get those plants in the field,” Thompson said last week. Before they mold in his greenhouse, he is rushing to get his million seedlings into the ground, at 5,500 plants per acre. “It’s sort of a race,” he said.

Fewer farmers are running that race in North Carolina.

Thompson is one of an ever-smaller number of tobacco farmers in the state. Those who are still in the business are planting more tobacco per farm, according to the latest census of agriculture from the U.S. Department of Agriculture.

The changes are largely the result of the end of a Great Depression-era quota and price support system 10 years ago that drove consolidation of the tobacco-growing business.

The 2012 census, the latest of a report that comes out every five years, shows 1,682 tobacco farms in North Carolina, down from nearly 8,000 farms before the quota program was ended. And while the overall amount of land planted in tobacco in the state has stabilized in recent years, at 167,443 in 2012, the size of tobacco farms has more than quadrupled in a decade, to an average of 100 acres.

The quota system kept tobacco prices high by allotting a limited amount of acreage that could be planted each year. It helped make tobacco a lucrative crop grown on a small scale. In 1982, when nearly 29,500 farmers were growing tobacco in North Carolina, the average size of a tobacco farm was just 11 acres.

As farmers with allotments started aging and dying, their share of the quota was often leased to other farmers. Meanwhile, North Carolina’s relatively expensive tobacco began losing ground on the world market to cheaper foreign leaf, leading to pressure to end the quota system.

In 2004, Congress approved the federal Tobacco Transition Payment Program, a 10-year effort also known as the “tobacco buyout,” to ease farmers off the old price guarantee. The federal government arranged with tobacco companies to pay $10.14 billion to tobacco growers and landowners who owned tobacco allotments in 2002.

‘Growing more of it’

Landowners received $7 per pound of tobacco produced on their land that year, and growers received $3 a pound. The money came, piecemeal, every January for 10 years, until this year.

“Some growers took the money and continued to farm. Some chose to take it and diversify into another direction,” Thompson said. “The ones that are staying in it are growing more of it.”

Thompson stayed.

He used the money to build up his operation and become more competitive. In 2004, he was growing about 150 acres of tobacco; now he grows about 250 acres.

But more than that, he stayed because tobacco farming is his “way of life.”

“I’m going to stay in it till my dying day,” he said. “It’s something I’ve always done. It would just be like somebody from Iowa that grew corn. It’s in their blood.”

For Mark Wellons, who farms cotton, soybeans and tobacco near Princeton, staying in tobacco production simply made sense.

“We were already set up in it,” Wellons said. “It’s what we did to make a living.”

Wellons farms about 120 acres of tobacco. He said that is more acres than he farmed since the tobacco buyout, but added that “in the last few years, it’s been level.”

A cash crop

Tobacco is still a major crop in North Carolina, which is the top tobacco-producing state in the nation. It’s still a cash crop for farmers, bringing in more per acre than other crops such as cotton and soybeans. Wellons points out, though, that tobacco is tough on the soil and needs “long rotations,” or up to four years of a different crop in the field.

North Carolina tobacco gets exported all over the world, helping to offset a drop in domestic demand, according to Tommy Bunn, president of the Raleigh-based U.S. Tobacco Cooperative. China in particular, Bunn said, is the biggest single customer for U.S. tobacco.

“China is a large market for U.S. tobacco because of the premium quality, the flavor and aroma and the cleanliness of it,” he said. “It’s well-handled.”

Domestic tobacco is the best in the world, Bunn said, because of the quality of the soil and the know-how of farmers passed down through generations. This premium quality gives U.S. tobacco a niche that is not likely to go away anytime soon, he said.

“The demand is coming from customers that need premium tobacco,” he said.

Domestic demand may be poised to fall again with the rise of the e-cigarette. Thompson said the device, which uses liquid nicotine instead of tobacco, has already caused a drop in tobacco consumption.

“We as farmers in the last 12 months have seen a reduction,” he said.

Bunn said he hasn’t seen an effect yet but admitted, “It does allow people to use the product in areas where you’re not supposed to smoke, and the demand seems to be growing for e-cigarettes.”

Still, farmers such as Thompson aren’t leaving the business.

“Even though there are ups and downs as far as the weather, the economy,” he said, “we have no ideas about the rains, about the heat, about the dry. We don’t know any of that. We just have to have the faith that it’s going to be good enough to give us the return what we invested plus a little.”

Gilman: 919-829-8955

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