TOBACCO OUTLOOK -- SUMMARY                                   April 17, 2007
April 2007, ERS-TBS-262s

               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 report will be 
available electronically about 1 week following this summary release.
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Harvest Intentions for 2007-Crop Tobacco Advance 2 Percent

On March 1, 2007, tobacco growers indicated intentions to harvest 344,170 acres 
during the upcoming 2007/08 season, a 2-percent gain over 2006. Last season, 
harvest intentions were 306,630 acres, and 338,950 acres were actually 
harvested.  Assuming average yields, production is expected to be around 720 
million pounds, about 6 million pounds less than last season.

For the current marketing year, 2006/07, tobacco leaf production is estimated at 
726.7 million pounds, 82 million pounds greater than in 2005 and 155 million 
pounds less than in 2004.  Marketings are expected to be close to production, 
since most sales are through contracts. With beginning stocks of 1.2 billion 
pounds, total estimated supply for 2006 will be about 1.9 billion pounds, 
compared with 2.1 billion in 2005. 

The tobacco balance of trade--the value of manufactured and unmanufactured 
exports less manufactured and unmanufactured imports (arrivals)—reversed its 
downward trend, gaining $163 million to reach $1,145 million.  Both 
unmanufactured and manufactured tobacco exports advanced, while on the import 
side the value of unmanufactured imports slipped and the value of products 
advanced.

Unmanufactured tobacco exports rebounded in calendar 2006, advancing 17 percent.  
At 397.0 million pounds (196,476 metric tons), exports were 58.0 million pounds 
higher than in 2005.  On a farm-sales-weight basis, total calendar 2006 
unmanufactured tobacco exports were 578.7 million pounds, compared with 495.5 
million pounds in 2005.

Imports (consumption, duty-paid) gained 51 million pounds in 2006, rising to 566 
million pounds.  Last year’s imports were revised upward to 515.3 million 
pounds.  Imports are 72 million pounds below the peak in 2003.  Burley import 
volume, as indicated by the general “Not Specifically Provided For” (NSPF) 
category, which contains mostly burley leaf, advanced 38.3 million pounds to 
reach 154.5 million pounds.  

Cigarette consumption slipped just over 1 percent, to 371 billion pieces, in 
2006.  Output for 2006 was 484.0 billion pieces, down 1 percent, and taxable 
removals were 364 billion pieces, up very slightly.  Per capita consumption (18 
years old and older) in 2006 was 1,654 pieces, 2.5 percent below 1,695 pieces in 
2005.

Cigarette exports in 2006 represented 23 percent of total output or 109.9 
billion cigarettes, 3 percent below 2005.  Japan, at 83.7 billion cigarettes, 
was the largest export market for U.S. cigarettes, accounting for 73 percent of 
shipments.  The total value of cigarettes shipped was unchanged at $1.2 billion. 
Unit value was $11 per 1,000 cigarettes, about the same as last year.

The Federal excise tax has been 39 cents per pack of 20 cigarettes since January 
1, 2002.  Fiscal year 2006 (October 2005-September 2006) Federal cigarette 
excise tax collections were $7.7 billion, $145 million less than the previous 
year.  State tax collections on a calendar-year basis increased by $.5 billion 
to $14.0 billion during 2006.  Currently, 20 States have cigarette excise taxes 
of $1.00 per pack or more, and six of these are over $2.00.  Thirty-eight States 
have excise tax rates of 50 cents per pack or more.  The weighted (by packs 
taxed) average State excise tax is 81.6 cents per pack.  

The annual Economic Research Service (ERS) survey of manufacturers indicated 
that filter-tip production comprised 99.2 percent of total output in 2006, the 
same as in 2005.

U.S. large cigar output recovered in 2006 to reach 4,260 million cigars, but 
fell short of 4,407 million cigars in 2004, the highest since 1975.  Taxable 
removals in 2006 reached 4,504 million cigars, 2 percent above 2005.  Small 
cigar output in 2006 was 5,122 million cigars, compared with 4,662 million in 
2005, a 10-percent gain.

Snuff output slipped less than 1 percent in 2006, at 86.0 million pounds.  This 
was the first decline for snuff output in over 10 years.  However, taxable 
removals continued the long-term advance, gaining 2 percent to reach 80.3 
million pounds.  

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