Tobacco Profile

Overview

Whether enjoyed in cigars or kreteks, snus or hookahs, cigarettes or beedis, dipped, chewed, or sniffed, tobacco is used by more than 1.1 billion people across the world (WHO). The addictive nicotine found in tobacco provides pleasure to its users by triggering the release of opioids and dopamine in the brain (Smoking).

Researchers are exploring medicinal and nutritional uses for tobacco, which has been identified by economists as one of the top ten crops grown in the United States according to its market value.

Production

The six major classes of tobacco include flue-cured, air-cured, fire-cured, cigar filler, cigar binder and cigar wrapper (Tobacco: Background). Flue-cured tobacco accounted for 58 percent of tobacco production in 2011 and air-cured burley tobacco accounted for 29 percent (NASS). The majority of U.S. tobacco is used for cigarettes. Cigarettes account for about 95 percent of flue-cured tobacco and 90 percent of burley tobacco (Tobacco: Background). Dark air-cured and fire-cured tobaccos are used in snuff and chewing tobacco.

Tobacco production has decreased from more than 2 billion pounds in the 1970s to 629 million pounds in 2016, down 16 percent from 2010. In 2016, tobacco was grown on 319 thousand acres. In 2016, yield per acre averaged 1,967 pounds, down 221 pounds from 2015. (NASS) The total value of tobacco production in 2016 was more than $1.3 billion. (NASS)

Domestic tobacco production begins with tobacco seeds germinated in a greenhouse under strict environmental and disease controls. Established seedlings are then transplanted into the field where they are heavily fertilized and monitored and treated for disease and insect damage as needed.

Raising any type of tobacco is very labor-intensive. The average labor requirement for stalk cut tobacco such as burley is in excess of 200 hours/acre. In addition, each class of tobacco has unique growing and harvesting requirements. Cigar tobaccos are grown under cover to prevent insect damage and improve leaf texture. Flue-cured and cigar tobacco leaves are individually harvested from the bottom of the stalk up as they ripen which requires multiple trips through the field. The entire stalk of both fire-cured and air-cured tobacco is harvested with leaves intact.

All types are then housed in some type of structure because harvested tobacco must undergo a curing process before it is used. Temperature, humidity, and harvesting conditions all affect the crop’s final quality. To maintain peak curing conditions for cigar and air-fired tobaccos, this might require opening and closing doors to the structure in which the tobacco is housed for several weeks.  For fire-cured tobacco, temperature and smoke spread must be tightly controlled to ensure that the result is dark-fired, rather than burnt. Barns housing flue-cured tobaccos, which are cured by forced hot air, must be checked for CO2 levels to control the formation of nitrosamines in the finished leaf. (Reed)

The land-grant institutions in the traditional tobacco-growing states have an extensive history of research into the cultivation of this crop. Publications are available from the following sites: Clemson University, North Carolina State University, University of Kentucky, University of Tennessee and Virginia Tech.

Demand

According to the Centers for Disease Control, an estimated 36.5 million people or 15 percent of all adults in the United States smoke cigarettes, which is down from 42 percent in the 1960s (Tobacco Facts). Some analysts anticipate that smoking will become rare to nonexistent in the United States by 2046 (Tobacco Facts). However, even as tobacco consumption is dropping in wealthy nations, it is increasing in developing nations. In India, tobacco is available in many forms and is used by both children and adults. The Chinese are both the world’s dominant producer and consumer of tobacco.

Marketing

Tobacco marketing methods have shifted away from auction markets to contract markets and many tobacco warehouses have closed as a result. Direct contracting with tobacco growers allows manufacturers to better influence production to meet their needs (Capeheart 2002).

Tobacco companies are not soliciting new growers at this time. However, recent production shortfalls may result in companies seeking new growers or offering higher prices. Currently more than 30 companies or brokers purchase tobacco. Information on tobacco receiving stations may be found at The Center for Tobacco Grower Research at the University of Tennessee.

Price

Adjusted for inflation, the grower price of tobacco has decreased steadily since the 1980s. Since 1997, tobacco prices have remained under $2 per pound. The wholesale price of cigarettes has continued upwards while export price remained constant. In 2011, the national average for tobacco was $1.87 per pound, up $0.085 from the previous year. (NASS).

Exports

The United States has been both the world’s largest importer of tobacco leaf and at the same time the largest exporter of cigarettes (Tobacco Trade). The high dollar value of exports and imports makes tobacco one of the leading U.S. agricultural crops. However, the U.S. share of world tobacco trade has decreased from over 25 percent in the late 1960s to less than 10 percent in 2003.

Imports

The share of foreign tobacco in U.S. cigarettes has steadily increased in the last four decades and continues to rise. U.S. manufacturers blend low-quality import tobacco with domestic leaf to achieve a desirable blend at a lower cost. The steady increase in imports is due mainly to cheaper world market prices for tobacco (Capeheart 2002).

Sources

Breed’s Collection of Tobacco History Sites.

Brown, Blake and Will Snell, U.S. Tobacco Situation and Outlook, 2011.

Global Agricultural Trade System, Foreign Agricultural Service, USDA.

National Agricultural Statistical Service (NASS), USDA.

Philip Morris USA

Reed, T. David,  2008 Flue-cured Tobacco Production Guide.

Smoking Cigarettes Affects Brain Like Heroin; Heroin, Morphine, Nicotine Affect 'Feel-Good' Brain Chemicals in Similar Way, Web MD.

Tobacco Facts.

Tobacco Yearbook Data Tables, ERS, USDA, 2007.

Other Resources

Smoking and Tobacco Use, Centers for Disease Control and Prevention.

State Cigarette Excise Tax Rates & Rankings, Tobacco Free Kids.

Statistical Database-Agriculture, Food and Agricultural Organization (FAO), United Nations.

Links checked September 2017.