TOBACCO YEARBOOK March 06, 2002 December 2001, ERS-TBS-251 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- TOBACCO YEARBOOK is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. This release contains only the text of the TOBACCO YEARBOOK -- tables and graphics are not included. Printed copies of this YEARBOOK are available from the USDA order desk. Call, toll-free, 1-800-999-6779 and ask for stock # SUB-TBS-4031, $21. ERS-NASS accepts MasterCard and Visa. --------------------------------------------------------------------------- Contents Summary Tobacco Products U.S. Exports and Imports U.S. Tobacco Leaf Situation and Outlook Flue-Cured Burley Southern Maryland Fire-Cured Dark Air-Cured Cigar Tobacco Situation Coordinator Thomas Capehart Voice (202) 694-5311 Fax (202) 694-5820 E-mail: thomasc@ers.usda.gov Tobacco Briefing Room: www.ers.usda.gov/briefing/tobacco Editor Martha R. Evans Graphics, Table Design, & Layout Wynnice Pointer-Napper The Tobacco Situation and Outlook is being replaced by an electronic newsletter titled Tobacco Outlook. The first issue will be released in April 2002. The Outlook will continue to be supplemented by a printed Yearbook (December). Summary Ending a season in which the dominance of auction markets gave way to contract sales, flue-cured tobacco markets closed on November 8, after 59 days. The magnitude of contract sales in 2001 has turned the market upside down. Auction sales reached 114.2 million pounds and were dwarfed by contract sales of 440.5 million pounds. During the 2000 season, only 50 million pounds of contract flue-cured leaf were sold compared with auction sales of 514 million pounds. Final sales of 554.7 million pounds were 3 percent below 2000s 574.7 million pounds. The overall 2001 price averaged 185.8 cents per pound, compared with 179.3 cents in 2000. Contract prices exceeded those at auction by 4.3 cents per pound. Throughout all tobacco production belts, 45 contract centers processed non-auction sales in addition to 66 auction warehouses holding sales. All belts had favorable growing conditions that produced better quality than last season. Total volume slipped due to lower effective quota. Sales were within 1 million pounds of the effective quota. November 1 estimates indicate 247,500 acres of tobacco were harvested, compared with 250,000 acres in 2000 and 303,800 in 1999. As with flue-cured, this burley season ushered in a new era in tobacco marketing. Burley contract centers began accepting deliveries on October 29, and auction sales began on November 13. Through December 10, contract sales have accounted for 63 percent of gross sales. The average price is 4 cents higher for contracted tobacco than that sold at auction at 199.07 cents per pound. As of November 1, total tobacco acreage for the 2001 marketing year was estimated to have declined 4 percent from 2001 to 451,240 acres. Yields improved again, reaching 2,355 pounds per acre for all types of tobacco, compared with 2,229 in 2000. Overall weather conditions were excellent in most tobacco-growing areas. Better yields boosted production in 2001 despite lower acreage. Production of all types is estimated at 1,063 million pounds, about 10 million pounds higher than last season. Based on November 1 estimates, 94 percent of U.S. leaf were types used for cigarettes, up slightly from last season. Cigar leaf, also used for other products such as chewing and smoking tobacco, accounted for 1 percent of production. Other types, mostly dark air- and fire-cured leaf, accounted for 5 percent of production. The 2002/03 flue-cured marketing quota will be announced by December 15, 2001. The burley marketing quota is to be announced by February 1, 2002, and acreage allotments for other types of tobacco participating in the program are to be announced by March 1, 2002. For the 2002 crop season, flue-cured production is likely to rise about 25 million pounds, while burley production may advance slightly. Lower carryover will increase the flue-cured and burley effective quotas. January-September 2001 tobacco leaf exports slipped 5 percent from the same period last year. Shipments were 294 million pounds compared with 308 million pounds last year, continuing the decline seen in previous years. Flue-cured volume slipped 15 percent while burley advanced 8 percent. Compared with 2000, the value of unmanufactured tobacco exports declined 5 percent during the 9-month period. Year- end exports are expected to slip once again during 2001 but not as much as the previous year. Exports will probably end near 395 million pounds, compared with last years 402 million pounds. Unmanufactured tobacco imports (for consumption, duty paid) from January to September 2001 slipped 3 percent from the previous year. However, general imports (arrivals held in warehouses) advanced 22 percent during the same period. Imports for consumption of Oriental and flue-cured leaf advanced. Burley slipped, cigar wrapper volume held steady, and other cigar types changed little. Stem imports for consumption declined 20 million pounds, driving down the overall total. U.S. cigarette output in 2001 is expected to change little from the previous year, slipping to about 590 billion cigarettes. Domestic consumption is expected to fall about 2 percent to 425 billion cigarettes. For the first 9 months of 2001, cigarette exports fell 8 percent behind the same period last year. Year-end shipments are expected to be within 5 percent of 2000 levels. Cigarette imports for consumption during January-September 2001 were 26 percent ahead of 2000. Year-end imports are likely to reach 14 billion pieces. Tobacco Products U.S. Cigarette Consumption in 2001 Estimated at 425 Billion Pieces Cigarette consumption in 2001 is estimated at 425 billion pieces. Higher prices, offset somewhat by rebates and discounts, are the major factor behind the 1-percent slide. Department of Treasury data are not available for 2001. Estimates of output and taxable removals are subject to revision. Cigarette Prices Increase The Bureau of Labor Statistics cigarette consumer price index shows retail prices of cigarettes 9 percent higher in October compared with a year earlier. Last years increase was 6 percent. Retail prices for 2001 will likely be about 10 percent higher than 2000. Manufacturers have raised wholesale cigarette prices twice in 2001. Manufacturers raised wholesale cigarette prices twice in 2001 so continued declines are expected. Cigarette consumption in 2001 is forecast at 425 billion pieces, or 21.3 billion packs. Continued Increase in Taxes at All Levels Currently, taxes range from 2.5 cents per pack in Virginia to $1.41 in Oregon. This year, Maine raised its cigarette tax from 74 cents per pack to $1.00 per pack, and Rhode Island raised its tax from 71 cents per pack to $1.00. Wisconsins cigarette tax increased from 59 cents per pack to 77 cents. As a result of a voter referendum, Washingtons cigarette tax will increase as of January 1, 2002, from 82 cents per pack to $1.42, making it the highest in the Nation. As of July 2001, 20 States have tax rates of at least 50 cents per pack and six States have rates $1.00 or greater. Virginia and Kentucky remain the lowest cigarette taxing States at 2.5 and 3 cents per pack, respectively. Cigarette Exports Steady After Sharp Declines Cigarette exports peaked in 1996 at 244 billion pieces and were 148 billion pieces in 2000. Since then, declining consumption in some importing countries and movement offshore of U.S. production has reduced U.S. cigarette shipments. Japan, Saudi Arabia, Cyprus, and the European Union are major buyers of U.S. cigarettes. In spite of the price increase, and the restrictions resulting from the Master Settlement Agreement (MSA), the proportion of Americans who smoke remains fairly steady, at about 25 percent. But, smokers are smoking less. Annual per capita consumption has dropped from 2,834 cigarettes per adult over age 18 in 1991 to 2,014 in 2000 (includes smokers and non-smokers). Restrictions on where people can smoke, higher prices, advertising restrictions, and greater awareness of health risks are having a long-term effect on the tobacco industry. Cigar Consumption Edges Downward Large cigar consumption peaked in 2000 at 3.9 billion cigars and has slipped during the past 2 years. Consumption in 2001 is estimated at 3.8 billion cigars, down slightly from 2000. In 2000, 3.9 billion cigars were consumed. Imports of cigars during January-September are ahead 12 percent compared with the previous year. Year-end imports are expected to be around 500 million cigars. Exports through September reached 78 million cigars compared with 85 million during the same period in 2000. Other Tobacco Products Output of chewing tobacco during January-September 2001 was 36.0 million pounds. The decline of 4 percent was the same as the last year. January-September output fell for all classes of chewing tobacco, firm, moist, twist, and leaf. Estimated output for calendar 2001 is 47.3 million pounds. Taxable removals (domestic invoices) of chewing tobacco through September were 35.4 compared with 36.7 million pounds during the same period last year. Total taxable removals for 2001 are projected at 46.7 million pounds. As with other smokeless and smoking tobaccos, taxable removals are very close to actual consumption. After peaking in 1999, smoking tobacco continued to slide as it did in 2000. January-September output slipped for all types of smoking tobacco. Through September, 11.8 million pounds of smoking tobacco were manufactured compared with 10.2 million pounds the previous year. All types of smoking tobacco showed losses. According to the Agricultural Marketing Service, taxable removals of smoking tobacco have advanced during the 9-month period, rising 17 percent to 10.8 million pounds. Both granulated and cut smoking tobacco saw gains. In 1999 both had increased compared with 1998 as higher cigarette prices encouraged some consumers to roll their own cigarettes. This years increase may indicate a pent-up demand for roll-your-own smoking tobacco. Snuff has been a consistent growth segment for the smokeless tobacco industry. However, output during the first 3 quarters of 2001 slid 1 percent, the first decline in more than a decade. The 9-month total reached 52.5 million pounds. If this trend continues, year-end output will be about 69.0 million pounds, compared with 69.5 million pounds during 2000. Taxable removals for January-September were steady compared with a year earlier--totaling 52.1 million pounds. Year-end taxable removals may not change much from 2000s 68.6 million pounds. U.S. Exports and Imports Leaf Exports May Decline Slightly This Year Unmanufactured tobacco exports were down 5 percent through September 2001. Shipments were 294 million pounds compared with 308 million pounds during the same period in 2000. Value declined 5 percent also, due to little change in unit values. Flue-cured shipments fell 15 percent, enough to overwhelm gains in burley and stem shipments. Calendar year exports are projected down slightly for the entire year. Higher prices for U.S. leaf continue to erode foreign demand. Total 2001 exports will probably be near 395 million pounds, compared with last years 402 million pounds. January-September exports of flue-cured totaled 116 million pounds or 39 percent of total leaf shipments, compared with 44 percent last year. Shipments were down 20 million pounds. Burley shipments, the second most important leaf export, gained 8 percent in volume, after losing 20 percent last year. The 6-million- pound gain brought year-to-date exports to 81 million pounds, compared with 75 million pounds during the same period last year. After a significant decline last year, Maryland leaf exports shifted downward by a lesser amount, slipping 4 percent to 2.5 million pounds during January-September 2001. Shipments of Kentucky-Tennessee dark fired advanced once again. Stems, Connecticut wrapper, cigar binder, fire- and sun-cured leaf all slipped. Shipments of other tobacco advanced. Among major markets, volume to the European Union (EU) advanced by 11 percent during the January-September period, accounting for 57 percent of export volume. Overall, Germany was the largest purchaser, taking twice as much as the next largest buyer, Belgium, which was followed by Japan, the Netherlands, Malaysia, Turkey, Denmark, France, and Spain. These countries accounted for 66 percent of U.S. leaf exports. Shipments to Japan were down sharply. There have been no exports under USDA-financed programs since 1993. Imports for Consumption Slip 3 Percent Unmanufactured tobacco imports (consumption) for January- September 2001 are down compared with the same period in 2000, at 372 million pounds. Cigarette and cigar leaf and scrap advanced but were offset by much lower stem imports. Imports of Oriental leaf during the period were 108 million pounds, up from last years very low levels. Both unstemmed and stemmed flue-cured increased compared with last year while burley leaf imports slipped. Cigar filler advanced, while wrapper was steady. Imports of stems declined 39 percent to 40 million pounds compared with 66 million pounds last year. In contrast to imports for consumption, general imports of unmanufactured tobacco gained 22 percent during January- September 2001, reaching 407 million pounds, compared with 334 million pounds last year. In January-September 2000, general imports trailed imports for consumption by 50 million pounds while this year (January-September 2001) they were ahead by 35 million pounds. General imports of Oriental leaf surged by 60 percent and flue-cured, both unstemmed and stemmed, gained 20 percent. Burley leaf imports advanced 17 percent. General imports of stems advanced 10 percent to 56 million pounds. Cigar wrapper held steady while filler gained slightly. October 1, 2001, U.S. stocks of imported cigarette leaf fell 71 million pounds or 8 percent below October 1, 2000. Total cigarette stocks of foreign-grown leaf were 766 million pounds, compared with 837 million pounds at the same time last year and 930 million pounds a year earlier. Oriental leaf again accounted for the largest part of the decline, followed by flue-cured and burley. Cigar leaf stocks fell by 6 percent. Most imported cigar leaf stocks are filler tobacco. Cigar stocks fell from 104 million pounds on October 1, 2000, to 98 million pounds on October 1, 2001. Tariff-Rate Quota The tariff-rate quota (TRQ) for 2001-02 on cigarette tobacco leaf imports (excluding Oriental) was 14.8 percent filled as of December 5, 2001. The tobacco TRQ year begins on September 13 and runs through September 12 the following year. The total quantity allowed under the TRQ is 332 million pounds. During the 2000-01 TRQ year, 52.7 percent of the quota, or 175 million pounds were imported under the quota. U.S. Tobacco Leaf Situation and Outlook 1/----- ----- 1/ All quantities in this section are in farm-sales weight unless otherwise noted. Years refer to marketing years; for instance, the 2000 crop year is July 2000-June 2001 for flue-cured and cigar wrapper (type 61) and October 2000- September 2001 for all other types, unless otherwise noted. ----- Based on November 1 estimates, tobacco acreage for the 2001 marketing year declined 4 percent to 451,240 acres from 2000 after a 24-percent drop the previous year. Yields improved, reaching 2,355 pounds per acre for all types of tobacco, compared with the 2,229 pound yield of 2000. This season, weather was even better than last years favorable growing and curing conditions. Production in 2001 is estimated at 1.063 million pounds, about 10 million pounds over last season. Ninety-four percent of U.S. leaf produced was used for cigarettes. Cigar leaf, also used for other products such as chewing and smoking tobacco, accounted for 1 percent of production. Other types, mostly dark air- and fire-cured leaf, accounted for 5 percent of production. Marketing Quota and Allotments in 2002 The five domestic cigarette manufacturers (those with more than 1 percent of U.S. production and sales) are required to submit a statement of flue-cured and burley purchase intentions to the Secretary of Agriculture 15 days before the national quota announcement deadline. The flue-cured quota is announced by December 15th. Purchase intentions for flue-cured tobacco submitted by manufacturers on December 1st totaled 310.0 million pounds, 4 percent above last year. This is about the same gain as the previous year. Burley purchase intentions are due by January 15, 2002. Marketing quotas for flue-cured and burley in 2001 are set by totaling (1) intended purchases by domestic cigarette manufacturers from the 2001 crop; (2) average exports for the 1999/2000, 2000/01, and 2001/02 marketing years; and (3) an adjustment to maintain loan stocks at the lower of either 15 percent of the basic quota, or 100 million pounds of flue-cured or 50 million pounds of burley. The Secretary of Agriculture may adjust this three-part total by up to 3 percent, up or down. Legislation passed in 2000 and 2001 excludes 1999 loan stocks from the quota calculations by forgiving CCC loans for this tobacco. The national marketing quota for the 2002 flue-cured crop is 582 million pounds, up from the 2001 quota of 548.9 million pounds and is based on the following: (1) purchase intentions by domestic cigarette manufacturers of 310 million pounds (2) unmanufactured exports (3-year average) of 249.9 million pounds, and (3) a reserve stock adjustment of 22.1 million pounds. The Secretary of Agriculture made no discretionary adjustment. The effective quota is expected to be about 545.3 million pounds, or 6 percent over 2001. The national average flue-cured yield goal remains unchanged at 2,088 pounds per acre. The price support level for the 2002 crop is $1.656 per pound, down .4 cent per pound from 2001. The national acreage allotment for the 2002 crop is 278,736 acres, up 6 percent from the 2001 allotment of 262,253 acres. For each farm, the 2002 basic quota will increase approximately 6 percent from 2001. By February 1, 2002, the U.S. Department of Agriculture (USDA) will announce the 2002 burley poundage quota, and by March 1, USDA will announce the 2002 acreage allotments for other kinds of tobacco under the quota program. Price Supports in 2002 The 2002 price supports for flue-cured and burley (set at the same time quotas are announced) are the preceding years support adjusted by changes in the 5-year moving average of prices, excluding the highest and lowest years (two-thirds weight) and changes in a cost-of-production index (one-third weight). Costs include variable expenditures, but exclude costs of land, quota, risk, overhead, management, marketing contributions, and other items not directly related to tobacco production. The Secretary of Agriculture has discretionary authority to adjust the price support between 65 and 100 percent of the calculated increase or decrease. The 5-year moving average of prices and changes in a cost-of-production index increased the price support for flue-cured. The 2001 flue- cured and burley supports were raised by 100 percent of the formula increase. During 2000, flue-cured costs increased by above the normal level mostly due to higher costs for curing fuel. Fuel costs declined during 2001, resulting in lower price supports. For supported types other than flue-cured and burley, maximum increases in supports will continue to be based on changes in the average parity index during the 3 previous years compared with 1959. Loan associations can request reduced support if market conditions warrant. Cross County Flue-Cured Sales Approved in Georgia and Florida Preliminary results of a U.S. Department of Agriculture referendum show that a majority of Florida and Georgia tobacco producers have approved the sale of flue-cured tobacco quota across county lines within these two States. The referendum, which was held October 15-19, 2001, applies to 2002 and subsequent crop-year tobacco. Producers in Florida approved the referendum by 77 percent and Georgia producers by 81 percent. CCC Announces Changes in Flue-Cured Tobacco Price Support Differentials The U.S. Department of Agricultures Commodity Credit Corporation (CCC) recently published its final rule in the Federal Register announcing changes to the flue-cured tobacco price support differentials effective for the 2002 crop. CCC has determined that the price support loan differentials for flue-cured tobacco cured in barns with direct heat, beginning with the 2002 and subsequent crops, should be adjusted to provide a price support loan rate that is one-half the normal price support rate for tobacco cured in barns with an indirect heat source. With the new differentials, farmers with barns with direct heat sources may still sell their tobacco for the highest obtainable price. However, the lower price support value will reflect the expected lower market value for the tobacco. U.S. Industry Buys 351.4 Million Pounds of 2000 Flue-Cured Tobacco U.S. cigarette manufacturers purchased 351.4 million pounds of farm-sales weight flue-cured tobacco from July 1, 2000, through June 30, 2001, compared with 357.9 million pounds in the 1999-2000 marketing year. Manufacturers purchase intentions for the 2000 crop were 297 million pounds. Actual purchases were 118 percent of intended purchases. The Agricultural Adjustment Act of 1938 requires each major domestic cigarette manufacturer to purchase an amount equal to at least 90 percent of its stated purchase intentions to avoid the assessment of a penalty. In past years, purchases have declined due to lower cigarette produc-tion and increased use of imported tobacco leaf. Manufacturers purchase intentions for flue-cured tobacco in 2002/03 are 310.0 million pounds. Flue-Cured After the first season dominated by contracting, flue-cured tobacco markets closed on November 8 having held 59 sales days. Auction sales of 114.2 million pounds were dwarfed by contract sales of 440.5 million pounds. Total sales of 554.7 million pounds were 3 percent below 2001s 574.7 million pounds. The overall price averaged 185.8 cents per pound, 179.0 in 2000. The contract price exceeded auctions by 4.3 cents per pound. Throughout all belts, 45 contract centers operated to facilitate processing non-auction sales. There were 66 auction warehouses operating. In 1940, there were 373 auction warehouses operating. About 80 percent of the crop was direct marketed through 45 contract centers in 29 markets. Total gross flue-cured volume was down 70.3 million pounds, and value declined $92 million. Two marketing centers were operated by the Flue-Cured Stabilization Corporation, in Georgia and North Carolina. All belts had favorable growing conditions resulting in better quality and higher yields than last year. Lower effective quotas caused the decline in volume. Total sales were within 1 million pounds of the effective quota. This season, 247,500 acres of tobacco were harvested, compared with 250,000 acres in 2000 and 303,800 in 1999. Disappearance Rises in 2000/01 Flue-cured disappearance advanced in 2000/01 from 699 million pounds the previous season to 717 million pounds. Exports fell 24 million pounds while domestic use gained 42 million pounds. Export demand has been lower due to large global supplies of flue-cured and lower global consumption of tobacco products. Domestic use advanced because U.S. cigarette manufacturers substituted domestic flue-cured for foreign-grown leaf. Supplies for 2001 are lower as marketings and beginning stocks both declined. Final producer sales of 545 million pounds are 20 million pounds lower than the previous season, much less than the previous seasons drop of 90 million pounds. Not including CCC forgiveness stocks, beginning stocks on July 1, 2001, were 153 million pounds lower than July 1, 2000. Burley The 2001-2002 burley tobacco marketing season began Monday October 29, 2001, as contract centers began accepting deliveries. Burley auction sales opened November 13. Grade averages were higher on opening day although quality of offerings slipped compared with last year. Through December 19th, gross sales totaled 258.5 million pounds, 89 million pounds more than the previous season. Auctions accounted for 90.5 million pounds of sales and contract sales accounted for 168.0 million pounds. Contract sales comprised 65 percent of total sales. Prices were higher than last season, and offerings were of higher quality. Before Christmas, the average price was about 6.2 cents a pound greater than last season. Pre-holiday auction sales continue through December 13 and markets reopen on January 7th. Final auctions are planned for February 2. Contract center sales will operate through December 19th before breaking for the Christmas holiday. Prior to the holiday break, about 71 percent of expected production was sold. Leaf quality during the 2001 marketing season has been excellent. Price supports for the 2001 crop averaged $1.826 per pound, up 2.1 cents per pound from the 2000/01 season. Loan rates by grade range from $.85 to $2.06 per pound. Through December 13th, loan receipts totaled 6.2 million pounds compared with 13.0 million pounds last season. Disappearance Declines During 2000/01 During the marketing year beginning October 1, 2000, and ending September 30, 2001, disappearance of burley leaf advanced 19 million pounds from the previous season. Domestic use increased to 289 million pounds, 4 percent above 1999/2000. Exports of 142 million pounds were only 3 million pounds above the previous season. Disappearance increased as manufacturers and leaf dealers found a ready market after the poor 1999 crop created shortages of high- quality leaf. Carryover on October 1, 2001, is 121 million pounds lower than the previous season. Expected marketings of about 360 million pounds will result in supplies of 1,050 million pounds, about the same as the previous year. Carryover does not include 1999 loan forgiveness tobacco. This seasons effective farm poundage quota was 6 million pounds above 2000/01. Growers planted 11,000 fewer acres, and yields were 9 percent higher than a year earlier. Disappearance exceeded marketings in 2000 by 120 million pounds. Ending stocks were 690 million pounds, also 120 million pounds below the previous season. Manufacturers holdings increased 71 million while loan stocks fell by nearly 200 million to 124 million. The 2001/02 supply is about 2.53 times the expected disappearance, slightly less than the previous year, but closer to traditional levels. Use in 2001 is expected to decline slightly to end somewhere between use in 1999 and 2000. USDA To Announce 2002 Quota By February 1 USDA must announce the 2002 burley quota by February 1, 2002. The three components of the quota, manufacturers purchase intentions, previous 3 years exports, and reserve stock adjustment can be further adjusted up or down 3 percent at the discretion of the Secretary of Agriculture. Because this years marketings are expected to fall short of the effective quota, next years effective quota will likely be above the basic quota. Southern Maryland During the year ending September 30, 2001, disappearance of Maryland tobacco was 17.4 million pounds, within a million pounds of a year earlier. Domestic use slipped but exports rose slightly. Production in 2001 is 70 percent below 2000 at a mere 4.1 million pounds. Many growers in Maryland are participating in the buyout, and producers in Pennsylvania are switching to low-nicotine tobacco grown under contract. Supplies in 2001 have plummeted 13 million pounds, or 47 percent, mostly due to lower production. Acreage in 2001 declined by 5,800 acres. The buyout continues in Maryland and will have a significant impact on production in 2002. Flue-Cured Auctions for Virginia fire-cured (type 21) opened December 3rd. Prices during the first week of sales were 159 cents per pound, 9 cents below last season. The November 1 production estimate is 2.3 million pounds, 8 percent below 2000. Acreage reached 1,300 acres, the same as last season. Disappearance in 2000 (October 2000-September 2001) was 1.8 million pounds, 100,000 pounds below 1999. Supplies in 2001 are estimated at 6.5 million ponds, compared with 6.0 million pounds in 2000. Production slipped but manufacturers stocks were higher, boosting supply. Auctions for Kentucky-Tennessee fire-cured (type 22-23) opened in mid-January. Production in 2001 is estimated at 38.2 million pounds compared with 49.1 million pounds in 2000. Lower beginning stocks and production resulted in an estimated 5 million pound decline in supply for 2001. Loan stocks on October 1, 2001, were 4 million pounds. There were no loan stocks at the beginning of the 2000 season. Estimated supplies in 2001 represent 3.1 years use. Disappearance Surges Disappearance of fire-cured types reached 43.1 million pounds during the October 1, 2000-September 30, 2001, marketing year, about 8.7 million pounds over 1999-2000. Exports and domestic use increased. Domestic use rose as snuff output continued to rise and exports of fire-cured advanced. Dark Air-Cured November 1st estimates indicate 4,920 acres of dark air- cured (types 35-36) tobacco will be harvested in the 2001/02 season (October 2001-September 2002), 600 acres less than 2000. Yields are expected lower. Production is expected to be 12.9 million pounds, compared with 15.4 million pounds in 2000. Markets for type 36, Green River tobacco, opened on November 26, and, while grade bid averages were lower, average bids were up due to better quality. Through December 6, sales of type 35 reached 1.1 million pounds averaging $1.90 per pound. Loan receipts were slightly over 15 percent of net (producer) sales. Markets for type 35 One Sucker tobacco opened the last week of November. After the first week of sales, grade prices were mixed. Quality was not as good as last season. Prices during opening days averaged $1.64 per pound, compared with $1.71 last season. Through December 6, gross sales totaled 1 million pounds and the average price was $1.62 per pound. Loan receipts were slightly over 14 percent of net sales. For the 2000/01 marketing year that ended September 2001, disappearance of dark air-cured tobacco totaled 9.8 million pounds, compared with 9 million pounds in 1999. Exports slid but domestic disappearance advanced. Export demand has strengthened in recent years because of the low nitrosomine characteristics of dark air-cured tobacco. November 1 estimates set 2001/02 production at 12.9 million pounds, 3 million pounds below the previous season. Combined with offsetting higher beginning stocks, supplies in 2001 are expected to be 45.6 million pounds, compared with 42.5 million pounds in 2000. Cigar Tobacco Cigar Tobacco Disappearance Slips U.S. cigar tobacco disappearance during the 2000 marketing year (July-June for cigar wrapper leaf and October-September for other cigar types) was nearly halved. Total disappearance for all types fell to 10.7 million pounds from 22.1 million pounds in 1999. Supplies in 2000 were 36 million pounds compared with 47 million pounds in 1999, the result of very low production. Domestic use was 8 million pounds and exports reached 2.6 million pounds. For 2001, production is expected to recover by 3 million pounds to end at 13.2 million pounds, according to November 1 crop estimates. But estimated supply for 2001 is 38.5 million pounds, nearly a half-million pounds over 2000, due to higher production. Disappearance of Pennsylvania filler reached only 2.5 million pounds in 2000. Production slipped nearly 1 million pounds in 2000, and beginning stocks were nearly 2 million pounds lower. Although yields rose, lower planted acreage resulted in the drop. Production has been dropping since 1988. Lower carryin in 2000, combined with reduced production will result in diminished supplies of 14.5 million pounds, 2.8 million pounds below 1999. Many growers of Pennsylvania filler tobacco often grow Maryland type 32 instead. In 2001, growers have also grown low-nicotine tobacco under contract. For the 2000 marketing year, ending September 30, 2001, binder leaf disappearance dropped to 6.7 million pounds from 1999s 9.3 million pounds. Domestic use declined while exports, about 20 percent of disappearance, slipped. Total binder use was the lowest on record. Wisconsin binder use increased. Low supplies of Connecticut binder resulting from the poor 1999 crop, caused use to plummet to 1.5 million pounds. Cigar binder production fell to 3.3 million pounds in 2000, 52 percent below the 7.0 million pounds produced in 1999. Connecticut binder production slid by 3.1 million pounds due to blue mold disease that decimated yields by 90 percent. Wisconsin binder production fell as well, as acreage and yields for both Southern and Northern Wisconsin binder dropped. As of November 1, binder production for 2001 is estimated at 7.1 million pounds. Acreage has increased from 1,860 to 3,620 acres, and higher yields are expected. Cigar wrapper leaf supplies in 2000 (season ending June 30, 2001) were less than usual disappearance due to lower beginning stocks and a 50-percent decline in production. Exports outpaced domestic disappearance, totaling 1.3 million pounds out of a total disappearance of 1.5 million pounds. Supplies in 2000 were slashed by the lowest production since 1994. Blue mold reduced wrapper production in 2000 to 1.8 million pounds. Low production combined with very low beginning stocks of 777,000 pounds resulted in a supply of 2.6 million pounds, 2.3 million pounds below 1999 and the lowest in the post-war era. For 2001, November 1 crop estimates put wrapper leaf production at 2.0 million pounds. Acreage is expected to increase from 1,250 to 1,300 acres. With beginning stocks at 1.1 million pounds, supplies of cigar wrapper leaf should be 3.1 million pounds, 500,000 pounds over 2000. END_OF_FILE