Despite Threats On All Sides, Tobacco Growers Hold On

Although they’re being taxed, legislated and harassed out of business, Lancaster County tobacco growers seem to be holding their own. Much of the area’s crop has been sold in recent years to Lancaster Leaf and Philip Morris, both of which have cut back on the amount of tobacco they’ve contracted to buy for the 2009 crop.

However, Bailey’s Tobacco, a Keysville, Va., cigarette manufacturer has picked up the slack by more than doubling it contracts from the 2008 crop. Lancaster County Penn State Extension Agent Jeff Graybill estimates there are currently 7,000 to 8,000 total acres planted in all three types of tobacco the county is known for. Burley and Maryland-type tobaccos are used in cigarettes, and Pennsylvania Type 41 is used for cigars and chewing tobacco.

In spite of its daunting labor requirement, tobacco remains popular with many Lancaster County farmers because with a 2,500-pound-per-acre yield and $1.75 contract price, gross income gets close to $4,500 an acre. And then there’s that word, “contract.” A venture that lets a farmer know in March how much money he’s going to get next February is pretty hard to pass up.

But tobacco isn’t just a crop, it’s a social issue, and that makes the outlook murky for everybody. In spite of the uncertainty, Lancaster Leaf Tobacco is planning to add a 77,500 square-foot warehouse at its headquarters in the county, which would add 25 workers to the payroll. Tom Stephenson, the company’s chief financial officer said the additional tobacco being processed in the new building would be coming from outside Lancaster County.

He voiced concern about the future of his industry, and agreed with many who believe that tobacco taxes are reaching a point where the costs of enforcing tobacco regulations may outweigh any tax revenues coming in. He held up Canada as an example. In 1991, the country boosted taxes to such a level that black market products displaced almost all legal tobacco in some provinces. It was an enforcement nightmare, and the taxes were rolled back in 1993.

“Prohibition in the 1930s here in this country didn’t work, either,” Stephenson said.

Anti-smokers and gung-ho taxers aren’t the only things tobacco growers have to worry about, according to Jeff Graybill. There is also the dreaded blue mold.

Blue mold is a fungus that likes cool wet weather, and seldom has the county seen a cooler and wetter June. “Blue mold was still spreading fast up until last weekend,” said Graybill. “Dryer weather and higher temperatures can help stop the spread, but I’m still recommending spraying every seven to ten days.”

Fungicides used to control blue mold don’t cure it, but they can contain it and keep it from spreading. Blue mold appears as a yellow spot on the tobacco leaf. The spot falls out as the tobacco cures, which lowers yields for growers of cigarette types. For Pennsylvania Type 41 growers, the holes left behind are a serious problem.

“That tobacco is used for cigar wrappers,” explained Graybill, “and you can’t have cigar wrappers with holes.”
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