LOUISVILLE COURIER-JOURNALDecember 3, 2006Tobacco transition By Gregory A. Hall As tobacco growers look toward their third season without federal price supports, a still-young market is being dogged by something that has nothing to do with the government buyout -- a labor shortage. Burley growers at a Philip Morris USA receiving station in Lebanon, Ky., share that outlook. Despite being pleased with the prices, they said recently that they may cut production because, in the wake of the national push for immigration and border control, it has been difficult to find laborers to harvest their tobacco. Kentucky farmers rely heavily on migrant labor, primarily from Mexico, and growers and experts have complained that the existing guest-worker program is inefficient. "I don't have help other than that," said Teresa Luttrell, a Casey County grower. "It's just who you can pick up. … Farmers like me can't offer somebody full-time work." Because of the uncertain labor outlook, Luttrell, of Dunnville, said she'll either grow the same amount of tobacco next year or a little less. "I won't increase any," she said. University of Kentucky tobacco economist Will Snell cited labor as the major impediment that could keep the state's burley growers from taking advantage of solid demand even as fewer farmers raise tobacco. Congress needs to develop a less cumbersome, "farmer friendly" guest-worker program, Snell said. If that can be solved, burley tobacco growers have opportunities, he said. "I think there is reason out there, given the international market, for optimism for tobacco," Snell said. "But we all know what the wild-card issue is. It's not the (tobacco) companies. It's not South America. It's not what's happening with the health issue. The wild-card issue … is labor." Estimates have placed Kentucky's 2006 tobacco acreage at 73,000, up 3,000 acres from last year. The 2005 crop -- the first without federal price supports since the Depression -- was Kentucky's smallest since 1927. "There's no doubt we're moving toward a more concentrated industry in tobacco," Snell said last week at the Kentucky Farm Bureau conference in Louisville. Several burley auction houses remain in Kentucky for farmers who choose not to raise all of their tobacco on contract. With the drop in the number of growers, Philip Morris is offering incentives for remaining growers to meet their contracted production amounts or exceed last year's pounds. Luttrell, who grows on contract with the company, cut back from about 80,000 pounds in the last year of price supports to 52,000 last year. She grew 62,500 pounds this year, to take advantage of the Philip Morris incentive program that offers a capped per-pound bonus if a grower exceeds the previous year's total. While still relying on burley belt states, Philip Morris is also buying from nontraditional tobacco states like Pennsylvania, Illinois, Indiana and Wisconsin, company spokesman Bill Phelps said. The company believes the potential exists for increased burley growth, he said. "As the market has evolved, we have started looking to more nontraditional areas to talk to growers to see if they're interested in growing burley tobacco because there's a lot of potential for that," Phelps said. "…American tobacco is the backbone of our cigarette blends. If you take a Marlboro cigarette, that's predominantly American tobacco. So about 80 percent of the tobacco that we buy is grown in the United States." Marion County grower Mike Lawson said the just-concluded growing season "was an excellent crop year." But, like Luttrell, he and his father reported having problems finding labor and dealing with increased costs, such as for fertilizer. Because of that, they're looking to cut back, Mike Lawson said. Lawson and his father grew more this year -- 22,000 pounds, compared to 18,000 pounds last year -- also to take advantage of the incentive. "The prices ain't bad," he said.
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