Issue link: http://read.dmtmag.com/i/550331
70 tobaccoasia "Moving to a new system for leaf purchasing in the US will help us achieve important supply chain efficiencies while remaining a major purchaser of US grown tobacco," said Nicolas Denis, vice- president leaf, PMI, in a November 5 statement, though no specific efficiencies were mentioned. PMI has reportedly been having problems moving grades it doesn't need for its own purposes. Now, it can let the two dealers handle this tobacco. It has been suggested that PMI might not feel it has the expertise to deal with the child labor question, which has suddenly become a controver- sial topic. But a representative of PMI told Tobacco ASIA that this is not the case and the company expects to continue dealing with it. He also said that PMI will continue participating in the Good Agricultural Practices program even after it ceases its direct communication with farmers. As a result of this transition, approximately 35 PMI positions at the small PMI leaf operation based in Richmond, VA, will be eliminated. "It is unfortunate that this decision will impact some of our employees and it is our priority to provide them with the best possible support and assistance during this transition," said Denis. "We remain proudly committed to our cur- rent, well-established US grower partners and look forward to working with a new grower base as well as other service providers," said Herbert Weatherford, AOI's regional director for North and Central America. "The broader grower base better positions Alliance One to expand the avail- ability of US and Canadian tobacco to domestic and international markets." The 2014 American crop What appeared to be a burdensome oversupply was clipped right at the end of the season by bad weather in almost every tobacco-growing state. Among burley growers, Jerry Rankin of Dan- ville, KY, said, "Around the first of October we had two weeks when rain fell nearly every day. It was too much and the tobacco in field suffered." It was a common sight to see leaves falling from some stalks. "The first frost hit (November 3) while a lot of tobacco was wilting on the stick," he said. "Very little burley that was produced after the first week of October will be a quality that anyone will want." Larry Thompson of Bagdad, KY, between Louisville and Lexington, said perhaps 10% of the crop in his area was still in the field when the weather turned cold. He doesn't know whether any of it will be usable. He wound up with some over production beyond his two contracts. As of November 20, it looked like he would not average more than US$1.30 a pound on it. "That is a big comedown from US$2 a pound last year," he said. The market for burley was unlikely to improve this season. "The supply-demand balance for U.S. burley has taken an abrupt turn after being a seller's market for several years of tight supply," said Will Snell, a University of Kentucky agricul- TOBACCO PRODUCTION BY STATE, 2014 October estimate, USDA PRODUCTION/LBS SEASON 2013 2014 Georgia 22,400,000 35,000,000 Kentucky 187,240,000 202,340,000 North Carolina 362,660,000 437,820,000 Ohio 4,620,000 4,400,000 Pennsylvania 21,260,000 21,995,000 South Carolina 24,650,000 33,000,000 Tennessee 44,570,000 48,160,000 Virginia 52,613,000 61,118,000 Connecticut / Massachusetts 3,566,000 4,915,000 United States 723,579,000 848,748,000 Marty's son MJ directing traffic in the field