TOBACCO YEARBOOK -- SUMMARY December 16, 1997 December 1997, TBS-240 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of TOBACCO will be available 1-2 weeks following this summary release. For information about our products and services, please call the ERS Information Center at (202) 694-5050. ----------------------------------------------------------------------------- U.S. Tobacco Production Up 8.5 Percent in 1997 A larger 1997 U.S. tobacco crop was not enough to offset lower beginning stocks, and total 1997/98 supply is slightly smaller than a year earlier. Total U.S. tobacco production this year is forecast at 1.65 billion pounds, 8.5 percent above 1996 and the highest since 1992. Acreage increased 8.5 percent, and yields fell slightly. Prices for flue-cured leaf at auction were 11.3 cents per pound below the previous season. During the first few weeks of the burley auctions, prices were slightly below last season. The 1997 flue-cured auction sales averaged $1.724 per pound, compared with $1.837 the previous year. Although quality was better, 19 percent of the crop went under loan. Flue-cured marketings exceeded 1 billion pounds for the first time since 1981. Adequate world and domestic supplies, availability of foreign leaf, and reduced domestic use and exports of cigarettes lowered prices and increased loan takings. Burley markets opened November 24. The short crop this year resulted in prices close to last year's record high levels. During the first 3 weeks of burley sales, prices averaged 1.915 per pound, and volume was down 8 percent from last year. Burley support prices were raised 2.3 cents per pound this season. Production in 1998 will decrease because of smaller quotas. U.S. tobacco use during 1997/98 will fall short of marketings and next year's beginning stocks will increase from the 2.1 billion pounds carried into this year. U.S. cigarette consumption in calendar 1997 is projected down about 2.5 percent from last year. Output is expected to fall for the first time since 1993 and is mostly due to lower cigarette exports. Cigar consumption continued its meteoric rise in 1997, and is projected to reach 3.6 billion cigars. Snuff consumption rose, but chewing and pipe tobacco consumption slid in 1997. Exports of unmanufactured tobacco are expected to increase in calendar 1997, reaching 520 to 540 million pounds (declared weight), compared with last year's 485.5 million pounds. Shipments through September are 11 percent above the same period in 1996. On a farm sales weight basis, exports of 680 to 700 million pounds are expected. During January-September 1997, total U.S. imports for consumption (duty paid) reached 518 million pounds, 18 percent above a year earlier. During the same period in 1996, imports gained 54 percent over 1995. Imports continue to gain despite abundant U.S. stocks of foreign leaf, reduced cigarette production, and tight world leaf supplies. Imports of cigarette leaf totaled 377 million pounds for the 9-month period, and cigar leaf totaled 66 million pounds. January-September arrivals of tobacco (general imports) gained 6 percent, reaching 583 million pounds declared weight. The supply of U.S.-grown flue-cured tobacco for 1997/98 (July-June), about 2.1 billion pounds, is up 3 percent because of larger marketings. With marketings above indicated use, ending stocks are expected to rise 4 percent from last year's 1.12 billion pounds. The national (basic) flue-cured quota for 1998 was set at 807.6 million pounds, 17 percent below 1997. The effective quota (reflecting adjustments for net under-quota marketings) is estimated at 813 million pounds, 20 percent lower than 1997. Price supports will average $1.628, 0.7 cent higher. Basic quotas are down because cigarette manufacturers reduced purchase intentions, and stocks are adequate. The effective quota fell by a similar amount because 1997 marketings were close to that season's effective quota. The supply of U.S.-grown burley tobacco for 1997/98 (October-September) is estimated at 1.33 billion pounds, 6 percent below a year earlier. As of December 1, the 1997 crop was estimated at 563.1 million pounds. Because of poor growing conditions and low carryin, the entire crop will likely be sold in 1997/98. By law, the marketing quota for burley must be announced by February 1 and acreage allotments for several other kinds by March 1. Supplies of fire-cured and Maryland leaf are higher, but supplies of dark air-cured and cigar tobacco are down. For more information on the TOBACCO SITUATION AND OUTLOOK, contact Tom Capehart at 202-694-5245. Printed copies of the report will be available in about a week. To order, call 1-800-999-6779 and ask for stock number TBS-240. END_OF_FILE