Transcript Burley Tobacco Quality Considerations

Leaf Trends and
Quality Expectations
U.S. Tobacco Forum
Myrtle Beach, S.C., July 17, 2009
Worldwide Leaf Production
(x-PRC)
Worldwide Cigarette Production
(x-PRC)
+ 0.3%
Chinese Cigarette Production
+ 4.5%
Worldwide Trends

Total Leaf Production and Cigarette
production remained very stable with the
exception of China
 Greater variations in leaf production have
occurred within different regions over the
past 10 years
 Future Production dependant on demand
 There has been major cigarette
manufacturer consolidation throughout the
last 5 years.
U.S. Quality Expectations
Leaf Quality
Expectations

Contract Company specific requirements
 NTRM FREE!!
 Tobacco moisture
Pesticide
Residues
Company Requirements

Number of harvests
 Crop Throw Requirements
 Quality Expectations
 Color line that is in highest demand
 Overall adherence to all contract
stipulations
NTRM
NTRM

Zero Tolerance
– Synthetic
– Non-Synthetic
– Organic

Corporate NTRM Elimination Policy
NTRM On-Farm Inspection

100% Farm Inspection
 Grower education
 Farm Rating System
Tobacco Moisture

All companies require adherence to
moisture levels
 Some companies offer incentives for
tobacco delivered in a certain moisture
range
 Rejection of the tobacco due to higher than
acceptable moisture levels
Pesticide Residues
Pesticide Residues

Increased emphasis from all customers
 Applications of only approved pesticides at
labeled rates
 Follow all post harvest interval requirements
 Avoid application/drift of non-labeled
pesticides
Pesticide Residues

Hidden problem
 Costly to detect
 Much more extensive testing is being
required by more and more
manufacturers
 Rejections by manufactures and leaf
dealers
Concerns
SCHIP Effects

$0.61 per pack tax increase on cigarettes
 32% increase on cigars
– The cap on the tax changed from $48.75 per
1000 pieces to $402.60 per 1000 pieces

$23.68 per pound increase on roll your own
tobacco
Concerns

Input Costs
 Aging grower population
 Lack of younger people beginning to grow
tobacco
 Aging Infrastructure
Concerns

Increases on state cigarette taxes
 Increases in state wide and city smoking
bans
– NC and VA
Questions