Tobacco YEARBOOK -- SUMMARY December 17, 2003 December 2003, ERS-TBS-2003 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 text of the Tobacco Yearbook will be available electronically about 1 week following this summary release. ----------------------------------------------------------------- Flue-Cured Sales Slip 12 Percent in 2003 After 56 sales days, the 2003 flue-cured marketing season drew to a close on November 6th. Wet conditions from Florida to Virginia delayed transplanting and created extremely wet growing conditions, making fieldwork difficult through the spring. Producers’ sales totaled 505.6 million pounds, about 91.5 percent of the effective quota for 2003. Carryover tobacco amounted to 55.3 million pounds. The overall price was 185.2 cents per pound. Last season, 571.3 million pounds sold for an average of $182.6 per hundredweight. Auction sales accounted for 16 percent of total sales. Thirty-eight warehouses held sales--with 14 of these acting as marketing centers for the Flue-Cured Stabilization Corporation. Auction sales totaled 95.6 million pounds and averaged $179.4 per hundredweight, a $3.72 increase over last season. Stabilization took 68.1 million pounds of tobacco sold at auction under loan this season or 71 percent of total auction sales. Thirty-seven contract centers purchased tobacco in 24 markets. Contract sales of 412.0 million pounds averaged 186.5 per hundredweight, up $2.09 from last season. The 2003-04 burley tobacco marketing season began Monday, November 10th as contract centers began accepting deliveries. Auction sales opened November 17th. Through the third week of sales, volume at auctions had lightened while contract centers faced moderate to heavy volume. Grade averages through the third week were higher than last season at $198.6 per hundredweight. Auctions accounted for 24 percent of sales and averaged $196.98 per hundredweight. Through the fourth week, 52 percent or 17.9 million pounds of leaf sold at auction went under loan, compared with 33 percent for the same period last season. Contract volume reached 92.5 million pounds averaging $199.1 per hundredweight. As of October 1st, the burley crop is estimated at 303.3 million pounds, slightly higher than last season’s sales of 300.1 million pounds. Sales are expected to end on February 26, 2004. As of October 1, total tobacco acreage for the 2003 marketing year was estimated to have declined 4 percent from 2002 to 413,010 acres. Yields slipped, reaching 2,044 pounds per acre for all types of tobacco, compared with 2,055 in 2002. Wet weather reduced yields in many tobacco growing areas. Production of all types is estimated at 844.3 million pounds, about 36 million pounds below last season. Based on October 1 estimates, 93 percent of U.S. leaf were types used for cigarettes, unchanged from last season. Cigar leaf, also used for other products such as chewing and smoking tobacco, accounted for 2 percent of production. Other types, mostly dark air- and fire-cured leaf, accounted for 5 percent of production. The 2004/05 flue-cured marketing quota was announced on December 15, 2003. The basic quota has been set at 457.6 million pounds, 10 percent below 2003. The effective quota is expected to be close to 500 million pounds. During the 2003 season, producers marketed about 30 million pounds less than they were allowed. The 2004 burley marketing quota is to be announced by February 1, 2004, and acreage allotments for other types of tobacco under quotas are to be announced by March 1, 2004. Unmanufactured tobacco exports were down 3 percent during the January-September period, compared with 17 percent last year. Shipments were 235 million pounds compared with 244 million pounds during the same period in 2002. Value declined 8 percent due to lower volume, ending at $542 million. Flue-cured shipments fell 14 percent (similar to last year’s decline) and burley increased 9 percent. Maryland, fire-cured, and cigar wrapper all declined in volume. Overall calendar year exports are projected down about 3 percent by year-end. Higher U.S. leaf prices continue to erode foreign demand for U.S. leaf. Total 2003 exports will probably be near 330 million pounds, compared with last year's 338 million pounds. Unmanufactured tobacco imports (consumption) for January- September 2003 declined slightly after last year’s increase of 23 percent, reaching 452 million pounds. General imports slid 5 percent after gaining 8 percent during the same period last year. Stocks of imported cigarette leaf were 9 percent lower on October 1, 2003, compared with a year earlier at 756 million pounds. U.S. cigarette output in 2002 (the last year for which complete data are available) was 532 billion cigarettes, down 5 percent from 2001. For 2003, expected output is 505 million pieces, a 5- percent drop. Domestic consumption in 2003 is expected to slip 1 percent to 410 billion cigarettes. During the first 9 months of 2003, 93.6 billion cigarettes were exported, slightly fewer than the same period last year. Year-end shipments are expected to reach 120 billion pieces, less than half the 244 billion-piece peak of 1996. During January-September, cigarette imports advanced to 17.5 billion pieces compared with 15.0 billion during the 9-month period last year.