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U.S. DEVELOPMENTS
Highlights:
U.S. Industry buys 506 Million Pounds of 1997 Flue-Cured Tobacco: The U.S. Department of Agriculture announced that US cigarette manufacturers purchased 506.4 million pounds of farm sales weight flue-cured tobacco from July 1, 1997 through June 30, 1998, compared to 602.7 million pounds in the 1996-1997 marketing year. The manufacturers’ purchase intentions for the 1997 crop were 535.5 million pounds. Actual purchases were 95 percent of intended purchases. The Agricultural Adjustment Act of 1938 requires each major domestic cigarette manufacturer to purchase an amount equal to at least 90 percent of its stated purchase intentions to avoid the assessment of a penalty.
USDA Announces 1998 Assessments for Virginia Sun-Cured and Fire-Cured Tobaccos: The U.S. Department of Agriculture’s Commodity Credit Corporation (CCC) today announced that, to qualify for price support loans, producers of 1998-crop fire-cured (type 21) and Virginia sun-cured (type 37) tobaccos must agree to pay no-net-cost assessments for deposit into no-net-cost accounts on all marketings. No-net-cost assessments are 1.232 cents per pound for fire-cured (type 21) and 1.32 cents per pound for Virginia sun-cured (type 37) 1998-crop tobaccos.
The no-net-cost assessment is in addition to the 1998-crop marketing assessment of 1.536 cents per pound for fire-cured (type 21) and 1.36 cents per pound for Virginia sun-cured (type 37) tobaccos. The marketing assessment will be shared equally between producers and purchasers, with each paying .768 cents per pound for fire-cured (type 21) and .68 cents per pound for Virginia sun-cured (type 37) tobaccos. The no-net-cost assessment, plus the 1998 marketing assessment, means that a total of 2 cents per pound will be collected from producers on each pound of fire-cured (type 21) and Virginia sun-cured (type 37) tobaccos marketed from the 1998-crop. CCC consulted with the Dark Tobacco Sales Cooperative, the producer-owned association through which price support is made available for fire-cured (type 21) and Virginia sun-cured (type 37) tobaccos, before reaching a final determination.
Auctions:
U.S. Flue-Cured Auction Update: Through 36 sale days of the1998 U.S. flue-cured auction season, total flue-cured gross sales reached 253,485 metric tons at an average price of $3.74 per kilogram. This represents a decrease in sales of nearly 6 percent and an increase in the average price of about 2 percent when compared to the same 36-day period of the 1997 U.S. flue-cured auction season. Over 13 percent of sales have gone under loan, approximately the same amount as a year ago.
United States Flue-Cured Auction Update Through 36 Sale Days September 22, 1998 |
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1997 Season |
1998 Season |
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| Gross Sales | Loan Receipts | Gross Sales | Loan Receipts | |||
| Type | Tons |
$/kg |
Percent |
Tons |
$/kg |
Percent |
| TYPE 14 | ||||||
FL |
34,687 |
3.74 |
13.15 |
6,036 |
3.65 |
12.59 |
GA |
35,553 |
3.72 |
5.83 |
29,999 |
3.66 |
8.69 |
| Total | 42,690 |
3.72 |
7.05 |
36,036 |
3.66 |
9.34 |
| TYPE 13 | ||||||
NC |
32,307 |
3.71 |
17.03 |
26,040 |
3.70 |
19.05 |
SC |
38,793 |
3.76 |
12.49 |
31,481 |
3.68 |
21.80 |
| Total | 71,101 |
3.74 |
14.55 |
57,522 |
3.69 |
20.55 |
| TYPE 12 | ||||||
NC |
103,306 |
3.67 |
14.70 |
104,908 |
3.79 |
12.35 |
| TYPE 11 | ||||||
NC |
31,791 |
3.53 |
16.98 |
33,478 |
3.72 |
9.58 |
VA |
19,962 |
3.60 |
12.17 |
21,539 |
3.78 |
8.96 |
| ALL FLUE | 268,851 |
3.68 |
13.53 |
253,485 |
3.74 |
13.13 |
Source: USDA/AMS - Daily Tobacco Market News Comparison Report.
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