By: Bryant M. Spivey
County Extension Director – Johnston County Center
There is no doubt that for many, many years Flue-Cured Tobacco has reigned supreme as the most important cash crop in Johnston County and many of the counties throughout North Carolina. The crop has been the most important factor in how our farm economy was structured. Tobacco has truly been a staple and backbone of both our local and statewide economy. Nowhere is this more apparent than if you think of the story of the Duke family. Washington Duke got his start by peddling some tobacco from his farm. From peddling out of a wagon the business grew into the American Tobacco Company. This company grew quickly and needed dependable electricity so the family built power generation facilities to serve their manufacturing and today Duke Energy provides the electricity to most of the homes in Johnston County and many other locations. How important is electricity to you in your daily life?
This morning I was thinking of the stages in the acceptance of a new reality. Some think of these as the stages of grief and in this case I think it is fitting. The five stages of grief are 1. Denial and Isolation, 2. Anger, 3. Bargaining, 4. Depression, and finally 5. Acceptance. With respect to the position of tobacco in our farm economy, I have finally reached the stage of acceptance. While tobacco is still important and may be for years to come, it is no longer the king of the farm economy. What has happened? The demand for cigarettes is declining every year around the world. Alternatives to smoking tobacco abound in vaping and other devices. There are many places where smoking is just not acceptable anymore. In addition to all of this, tobacco exports to perhaps our most important customer have been cut off by the trade war with China.
According to crop report estimates, tobacco acres in Johnston County for 2019 are down 30% to 6,504 acres. Since Johnston growers were largely producing tobacco for export markets like China, those purchasers have slashed their purchase intentions. Growers have responded by cutting acres. The price of tobacco is also likely to be lower in 2019 than in 2018 and previous years due to decreased demand. Also farmers trying to survive and structure farm operations into viable units have agreed to contracts with new buyers at an even lower price. This will lower the average price and the value per acre even further. It is yet to be known what the attitude of buyers will be toward the 2019 crop but average prices for the crop will likely be less than $1.90 per pound for the first time in a long while.
You may wonder how it could have taken me so long to accept this new reality that tobacco is no longer the most important crop we produce. After all, the tobacco buyout occurred in 2004. Why wasn’t that the sign of the end? At that time, there was still a strong and even growing demand for US flue-cured tobacco. The exit of some growers from the industry also made a place for those that wanted to expand. The buyout made US tobacco more competitive in the marketplace. However, this has all changed and today the tobacco industry is shrinking.
Many who read this will say that I am simply stating the obvious while others may find it to be a practically a betrayal to North Carolina. I am certainly not saying that tobacco production is over for us but farmers are now forced to look for alternatives to tobacco to stabilize the farm.
The obvious first choice has been sweet potatoes. Growers have planted more sweet potatoes this year to offset income losses from tobacco. Sweet potato acres have increased 30% this year in Johnston County to 11,929 acres. In addition, the 2018 crop of sweet potato was lower yielding due to Hurricane Florence. This lower supply has increased the price and today farmers are receiving nearly double the price that they received for sweet potatoes last year at this time. Also, at least for now it does not appear that production will outpace demand for the 2019 crop.
A projected value for the 2019 tobacco crop is $4255 per acre for a total value of $27.6 million while the projected value of the sweet potato crop is $4200 per acre for a total value of $50.1 million. While the news is good right now for sweet potato producers it is not good for tobacco growers. The trouble is in most cases, these are the same people. In addition, the two crops work much better together than either one does alone from a labor and crop rotation standpoint.
The acreage of other crops in the county for 2019 will be similar to past years and prices will fluctuate with commodity markets. Dry weather and heat has been tough on the corn crop negatively impacting yields. The same has been true for some of our cotton also. It is just too soon to know about soybeans right now.
While tobacco production is down, the production of another crop, Hemp is off and running. The NC General Assembly has been recently debating the future of smokable hemp while more than 15 farmers are actually cultivating industrial hemp now in Johnston County. We probably have less than 200 acres of industrial hemp and it is all being produced for CBD oil production. There is a great deal of hope being placed on this new crop and hopefully it will produce meaningful income to support our farms in 2019 and beyond but this remains to be seen.