Flue-Cured Purchase Intentions: The U.S. Department of Agriculture announced that U.S. cigarette manufacturers plan to purchase 327 million pounds (farm-sales-weight) of flue-cured tobacco from the 1999 crop. Major domestic cigarette manufacturers are required by law to report annually to USDA their intended purchases of flue-cured tobacco from the U.S. auction markets and producers. These data along with the average level of exports for the preceding three years and the amount of flue-cured tobacco needed to attain reserve stock levels are used to determine the annual flue-cured tobacco marketing quota.
Provisions of the 1999-Crop Flue-Cured Tobacco Program: The U.S. Department of Agriculture announced that the national marketing quota for the 1999 crop of flue-cured tobacco is 666.2 million pounds, down from the 1998 quota of 807.6 million pounds. The national marketing quota was based on the following:
|Purchase intentions by domestic cigarette manufacturers:||327.0 Million Pounds|
|Unmanufactured exports (3 year average):||355.2 Million Pounds|
|Reserve stock adjustment:||-35.4 Million Pounds|
|Secretarys discretionary adjustment:||19.4 Million Pounds|
|1999 Flue-Cured Quota:||666.2 Million Pounds|
The price support level for the 1998 flue-cured crop is $1.632 per pound, up 0.4 cent from 1998. The national acreage allotment for the 1999 crop is 319,061 acres, down from the 1998 allotment of 386,782 acres. The effective quota is expected to be about 667 million pounds, down 19 percent. Importers of flue-cured tobacco will be responsible for the full $1.62 per pound marketing assessments for imported tobacco. The amount of the no-net-cost assessments will be announced at a later date.
Price Support Grade Loan Rates for Dark Air-Cured and Fire-Cured Tobaccos: The U.S. Department of Agriculture issued price support grade loan rates for the 1998-crop Kentucky and Tennessee dark air-cured tobacco, types 35 and 36, and fire-cured tobacco, types 22 and 23. These grade loan rates reflect the average support level of $1.45 per pound for dark air-cured tobacco and $1.68 per pound for fire-cured tobacco. Grade loan rates for dark air-cured tobacco will range from .50 cents to $2.24 per pound. Grade loan rates for fire-cured will range from .51 cents to $2.36 per pound. Producers are eligible for price support advances only when tobacco is consigned by the producer and only if produced on a farm that is in compliance with the tobacco marketing quota and price support programs. These associations are authorized to deduct one cent per pound to apply against overhead costs and may be authorized to make other deductions for assessments if required by law.
1997/98 U.S. Burley Auction Update: The third week of the Burley tobacco auctions saw lower prices, and a decline in the quality of marketings. Volume of sales was down, and loan receipts made only slight advances. Through the 15th sale day of the 1998/1999 U.S. burley and dark tobacco auction season, total gross sales of U.S. burley tobacco (type 31) reached 182,747 tons, up nearly 6 percent from the same period last year. So far this year about 4 percent of sales have gone under loan. Sales of Virginia fire-cured (type 21), one sucker (type 35), and Virginia sun-cured (type 37) are reported to be slightly lower so far this year. Sales of greenriver (type 36) tobacco reported stronger prices and heavier to moderate volume of sales after the second week of sales. Sales of eastern district fire-cured (type 22) and western district fire-cured (type 23) are schedule to begin in January 1999.
United States Tobacco Auction Update
Burley and Dark-Type Tobaccos
December 19, 1997
|Tobacco Type||Sale Days||Quantity
|Average Value/ Kilograms||Loan
Percent of Sales
Source: Daily Market News Summary No. 80