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Fewer raise tobacco after federal buyout

CHARLESTON, W.Va. -- Matt Coyner is a rare breed among farmers.

As droves of longtime growers leave the tobacco business, Coyner, 29, is trying to break in.

He raised a half-acre of the crop on his Teays Valley farm last year, producing 500 pounds of tobacco. He took it to an auction in Danville, Ky. and sold it all for $1.81 per pound.

"I was surprised, the market was holding itself up," he said.

He plans to raise five and a half acres this year and predicts he'll get at least 2,000 pounds of tobacco from it.

There were 544 tobacco farms in West Virginia in 2002, according to a 2004 U.S. Department of Agriculture report.

The state Department of Agriculture doesn't track the number of tobacco growers. But Roger Quarles, president of the Kentucky-based Burley Tobacco Growers Co-Operative Association, says there aren't many left.

"If I said 20, I might be exaggerating," he said. "It never was a huge thing, but it was something."

Quarles said many tobacco farmers left the business after the federal government's 2004 buyout of tobacco quotas.

For years, the federal government regulated tobacco growers by issuing allotments. Farmers were allowed to grow a certain acreage of tobacco on their lands, depending on the size of their fields.

Growers had to purchase allotments from other landowners if they wished to increase their production or lease land from other farmers.

The government eventually changed the system from an acreage-based allotment to a per-pound quota, where farmers were allowed to produce a specific amount of tobacco each year.

All that went away when Congress passed a $10.1 billion buyout for tobacco growers. The buyout gave farmers a dollar for every pound of tobacco in their quota, with the payments spread over a 10-year period.

Then in 2005, the government lifted all quota restrictions on tobacco growers. That drove tobacco prices down as supply overtook demand.

According to a North Carolina State University article from that year, tobacco prices fell from $1.85 to $2 per pound before the buyout to $1.30 to $1.50 in November 2005.

U.S. tobacco production has decreased dramatically since then.

In 2002, the U.S. produced 428,631 acres of tobacco, according to USDA data. In 2011, the most recent data available, farmers raised 336,050 acres of tobacco.

 

A new crop

Many farmers have left the tobacco industry for other crops. Ray Ferguson now grows asparagus on his Lincoln County farm.

His father-in-law, Joe Ware, started the farm about 40 years ago. When Ferguson married into the family 25 years ago, Ware was raising 10 acres of tobacco. By the time the farm stopped growing tobacco, it was down to five acres.

"Everything was different back then," he said. "Back then, I could make $750, $1,000 on just half an acre if you had good tobacco."

The family got out of the tobacco business a few years before the buyout. Ware Farms' tobacco sold for $2.20 per pound that last year.

Ferguson now sells his asparagus for $2.75 per pound.

"It's been good to me. It's as good as tobacco ever was to me," he said.

Ware Farms is now the state's largest asparagus grower and produces 6,000 pounds of asparagus yearly.

Ferguson was inspired to grow the vegetable while preparing to grill steaks one day. He decided he wanted some asparagus to go with his meat, and went to pick some from a small patch in his wife's grandfather's garden.

To his dismay, someone had already picked the asparagus patch clean. Ferguson headed to the local grocery store to purchase a pound or two. He became even more dismayed.

"They were asking $3 a pound for it and I said, 'No way.' "

Ferguson didn't get any asparagus to go with his steak that day, but he did get an idea. He did a little research about asparagus and discovered there weren't any local farms growing the crop.

"It's a market I had to discover for my own self," he said.

That first year, he planted half an acre of asparagus. He's increased his operation every year since then and plans to plant asparagus on the two remaining acres of his 10-acre property this year.

 

"I give up, I quit"

Longtime tobacco farmer Virgil Edwards, 73, of Coal Mountain, now drives a truck for his son, delivering supplies to a natural gas drilling operation in Virginia. He also has a small beef operation with 11 head of cattle.

Edwards didn't grow any tobacco last year. It was the second time in over a half century his farm didn't grown tobacco. He isn't sure he'll plant any this year, either.

"I'm teeter-tottering. I might grow an acre; I might not," he said.

His Putnam County farm, which has been in the family since 1889, was once a booming operation.

He started raising tobacco at his father's side in the late 1940s. His dad was allotted nine-tenths of an acre. When Edwards eventually took over the farm, he bought an adjoining farm's allotment to increase his production.

By the time the quotas were ended, Edwards was growing 2,600 pounds of tobacco on about 15 acres of land.

He also ran a substantial greenhouse operation. In 1997, Edwards and his son grew 2 million tobacco plants in their greenhouse and sold them to farms in Virginia, Kentucky, Ohio and West Virginia

But when tobacco prices dropped after the buyout, Edwards was forced out of the business.

Immediately after the buyout, Edwards had a contract with Philip Morris guaranteeing him $1.70 a pound for his crop.

The cigarette manufacturer ended that agreement three years ago when it shut down its Mt. Sterling, Ky. plant. So Edwards took his crop to auction that year. He got $1.25 per pound for his tobacco.

"I had a great crop. When I came home, I said, 'I give up, I quit.'

"I always said once the tobacco allotment (ended), tobacco in West Virginia would go away. And, by and large, it has," Edwards said. "It basically has died in West Virginia."

Edwards said he figures he can get $1.80 per pound if he raises tobacco this year. Production costs will be minimal, too, since he already has the barns and equipment he needs.

"At least that'll pay the taxes and insurance," he said.

 

"There's a future"

Coyner, who is working on a physics degree at Marshall University, said he has "not a clue" how things will turn out this year. But he's hopeful.

He started his seeds in a greenhouse in March. He'll start putting them in the fields in late May.

The plants take about three months to fully mature. Once they're finished growing, Coyner will cut them and hang them on outdoor curing structures to dry. That process takes about a month.

"If the market is halfway decent, I could get $1.50 per pound. That's $20,000. I expect it to be better than that," he said.

Although he acknowledges the tobacco industry is still in turmoil after the 2004 buyout, Coyner is betting the market will stabilize in the next few years.

"I think there's a future to it. I don't think it's going to be like it used to be, like in the golden years of my grandfather. But at some point, the market has to stabilize," he said.

Contact writer Zack Harold at 304-348-7939 or zack.harold@gmail.com. Follow him at www.twitter.com/ZackHarold.


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