U.S. tobacco leaf situation and outlook - burley and flue-cured tobacco transplanting schedule ahead of normal by June 1991; amendment to Tobacco Inspection Act of 1935 requires growers to pay for USDA grading service; tobacco supply expected to decline; USDA amends regulations on reporting tobacco stocks, effective July 1, 1991 - U.S. Dept. of Agriculture, Economic Research Service report

Situation and Outlook Report: Tobacco, June, 1991

Although behind last year's early schedule, flue-cured tobacco transplanting was ahead of normal because of favorable weather for growing plants and fieldwork. Plant supplies were adequate in most areas. Burley transplanting was also a little ahead of normal. By June 1, transplanting of flue-cured was virtually complete. About two-thirds of the burley had been transplanted, and, compared with the average of the last 5 years, it was a few days ahead of normal.

Auctions for the 1991 flue-cured crop are expected to begin between mid- and late July, although auction scheduling depends on the recommendations of the Flue-Cured Tobacco Advisory Committee (scheduled to meet June 25) and the availability of sufficient marketable volume. Last year's auctions opened July 17, 8 days earlier than the previous year.

The 1981 amendment to the Tobacco Inspection Act of 1935 requires growers to pay for the USDA grading service. The National Advisory Committee for Tobacco Inspection Services has recommended raising the fee 3 cents to 70 cents per 100 pounds this marketing season. The fees, paid by the seller at auction, are collected by USDA from warehouse operators.

Despite an expected crop about the same as last year, the smaller carryover will likely lower the supply. Price supports will increase 4 cents to $1.528 a pound for flue-cured, and 2.6 cents to $1.584 a pound for burley. Price supports for flue-cured and burley are calculated based on the level for the preceding year, adjusted by changes in a 5-year moving average of prices (two-thirds weight) and the changes in a cost-of-production index (one-third weight) as mandated in the Omnibus Budget Reconciliation Act of 1985.

For Virginia fire-cured (type 21), Kentucky-Tennessee fire-cured (types 22-23), Kentucky-Tennessee dark air-cured (types 35-36), Virginia sun-cured (type 37), and Wisconsin binder and Ohio filler (types 42-44 and 54-55), price supports in 1991 will increase about 5-1/2 percent. The increase is based on the change in the average parity index of the 3 previous years compared with 1959.

Under the Omnibus Budget Reconciliation Act of 1990, the marketing assessment has been set at 1.528 cents per pound for flue-cured and 1.584 cents for burley (divided equally for growers and purchasers). For other types, the marketing assessment ranges from 1.014 cents per pound for Wisconsin binder to 1.367 cents for Kentucky-Tennessee dark fire-cured tobacco. In 1991, the no-net-cost assessment totals .472 of a cent per pound for flue-cured and .416 of a cent for burley, shared equally between growers and purchasers. The no-net-cost assessments for other types were set as follows: Kentucky-Tennessee fire-cured (types 22-23), 1.3165 cents per pound; Kentucky-Tennessee dark air-cured (types 35-36), 0.831 cent per pound; and Virginia fire-cured (type 21) and sun-cured (type 37), 12 cents per pound. Wisconsin binder (types 54-55) assessments were suspended for 1991.

USDA's Agricultural Statistics Board will publish separate estimates of acreage, yield, and production by State of each type and class of tobacco in the August, September, October, and November Crop Production reports. Acreage, yield, and production estimates will be published for flue-cured in July and for burley in December. In addition, acreage estimates will be published by State for each type and class of tobacco in late June.

USDA Amends Regulations on Reporting

Tobacco Stocks

The U.S. Department of Agriculture is amending sections of its regulations implementing the Federal Tobacco Statistics Act as applied to imported tobacco effective July 1. Also, the quarterly report form will be revised. The Act requires quarterly collection and publication of amounts and kinds of tobacco on hand in the United States and Puerto Rico.

The change relative to imported tobacco will:

* Identify cigar leaf by utilization rather than by country of

origin. Foreign leaf will be designated as wrapper, filler,

and binder as domestic leaf is currently identified. This

permits direct comparisons of foreign and domestic cigar

leaf stocks. * Add "fire-cured" and "dark air-cured" designations. Foreign

stocks of these kinds had not been broken out before

the change. This breakout is needed so that procedures in

effect for inspection of imported tobacco can be adequately

followed.

The quarterly report form will be amended to provide for the collection of data on stocks of stems and additional data on stocks of sheet tobacco as follows:

* Quarterly reports by holders of tobacco stocks will include

the pounds of tobacco in leaf form and pounds of

stems owned on the first day of the applicable quarter;

with all stocks reported by types of tobacco and whether

stemmed or unstemmed.

* Holders of tobacco in sheet form will report the pounds of

tobacco sheet owned on the first day of the applicable

quarter segregated as to whether for cigar wrapper, cigar

binder, for cigarettes, or for other products.