TOBACCO -- SUMMARY                                      April 20, 2000
April 2000, ERS-TBS-246
             Approved by the World Agricultural Outlook Board
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This SUMMARY is published by the Economic Research Service, U.S. Department
of Agriculture, Washington, DC 20036-5831.  The complete text of the report 
will be available electronically about 1 week following this summary
release.
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Cigarette Consumption Continues To Slide

U.S. smokers consumed an estimated 435 billion
cigarettes in 1999, 6.5 percent less than a year
earlier. Price increases, higher State taxes, and
expanding regulations are the main factors in
declining cigarette use. Consumption per person based
on a population 18 years and older declined 7.5
percent. Consumption is expected to decline at a
slower rate in 2000. Taxable removals in 1999 slipped
to about 433 billion pieces. Exports dropped from 201
billion pieces in 1998 to 151 pieces, the lowest since
1974.

Increases in cigar consumption slowed to an estimated
2 percent in 1999, reaching 3.7 billion cigars. Snuff
consumption rose in 1999. Smoking tobacco sales are up
due to increased roll-your-own cigarette consumption.
Use of other tobacco products, mostly chewing tobacco,
is expected to continue declining.

As of March 1, U.S. tobacco growers indicated they
intend to harvest 500,700 acres of tobacco in 2000, 22
percent less than last year. Reacting to an 18-percent
decrease in the 2000 effective quota (similar to last
season), flue-cured growers indicated they would
harvest 253,900 acres, down 16 percent from last
season. Burley growers are planning to harvest 207,700
acres, about 31 percent less than last season.

Assuming average yields, 2000 production could total
1.0 billion pounds (farm-sales weight), about 300
million pounds less than in 1999. Lower production and
smaller beginning stocks anticipated for the 2000/01
marketing year will result in decreased supplies. Off-farm
stocks of U.S.-grown leaf on January 1, 2000,
were 6 percent below a year earlier, while stocks of
foreign-grown leaf were down 8 percent from a year
earlier.

Price supports for the 2000 crop are up 0.8 cent per
pound for flue-cured and 1.6 cents for burley. Price
supports for other kinds under quotas are unchanged.
Before the marketing season begins, the United States
Department of Agriculture (USDA) sets grade loan rates
for the various kinds of tobacco receiving support.

The tobacco balance of trade-the value of manufactured
and unmanufactured exports less imports-fell 20
percent in 1999. The value of U.S. leaf and product
exports fell more than imports. Leaf imports
(arrivals) plunged 8 percent to $721 million from $780
million. Imported products were $403 million, compared
with $428 million in 1998. Exports of unmanufactured
tobacco and tobacco products were down 18 percent at
$5.2 billion in calendar 1999. The total tobacco
balance of trade surplus fell from $5.1 billion to
$4.1 billion.

Total disappearance of U.S.-grown flue-cured tobacco
in the current marketing year (1999/2000) is likely to
be less than last year's 834 million pounds. Both
domestic use and exports are expected to decline.
Disappearance in 1999/2000 will likely exceed
marketings, so carryover stocks at the beginning of
2000/01 will decline. Production in 2000 will likely
fall from 1999's 658 million pounds due to an even
lower effective quota.

Disappearance of U.S.-grown burley tobacco in
1999/2000 is expected to decline from 1998/99's 520
million pounds. Burley auction sales in 1999/2000
totaled 549.7 million pounds, about 40 million less
than last season. Production in 1999 will exceed total
use, and 2000 carryin is expected to increase.

USDA set this season's burley marketing quota at 247
million pounds, 206 million pounds below last season.
The 2000 effective quota, which reflects last year's
over- and under-marketings, totals about 367 million
pounds, 323 million pounds below last year.
The 2000 acreage allotments increased for Kentucky-Tennessee 
firecured and dark air-cured types, declined
for Virginia fire-cured and cigar types, and were
unchanged for Virginia sun-cured tobacco. Producers
who did not plant tobacco in recent years may have had
their individual allotments adjusted downward.

Printed copies of the Tobacco Situation and Outlook
report will be available in about 2 weeks. For more information,
contact Thomas Capehart 202-694-5311. The text of the
report will also be available electronically via the
ERS website at www.ers.usda.gov.

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