Leaf Trends and Leaf Trends and Quality Expectations Quality Expectations
U.S. Tobacco Forum U.S. Tobacco Forum Myrtle Beach, S.C., July 17, 2009Myrtle Beach, S.C., July 17, 2009
Worldwide Leaf ProductionWorldwide Leaf Production(x-PRC)(x-PRC)
Worldwide Cigarette ProductionWorldwide Cigarette Production(x-PRC)(x-PRC)
+ 0.3%
Chinese Cigarette ProductionChinese Cigarette Production
+ 4.5%
Worldwide TrendsWorldwide Trends
Total Leaf Production and Cigarette production remained very stable with the exception of China
Greater variations in leaf production have occurred within different regions over the past 10 years
Future Production dependant on demandThere has been major cigarette
manufacturer consolidation throughout the last 5 years.
U.S. Quality ExpectationsU.S. Quality Expectations
Leaf QualityLeaf QualityExpectationsExpectations
Contract Company specific requirementsNTRM FREE!!Tobacco moisture
Pesticide Residues
Company RequirementsCompany Requirements
Number of harvestsCrop Throw RequirementsQuality ExpectationsColor line that is in highest demandOverall adherence to all contract
stipulations
NTRMNTRM
NTRMNTRM
Zero Tolerance– Synthetic– Non-Synthetic– Organic
Corporate NTRM Elimination Policy
NTRM On-Farm InspectionNTRM On-Farm Inspection
100% Farm InspectionGrower educationFarm Rating System
Tobacco MoistureTobacco Moisture
All companies require adherence to moisture levels
Some companies offer incentives for tobacco delivered in a certain moisture range
Rejection of the tobacco due to higher than acceptable moisture levels
Pesticide ResiduesPesticide Residues
Pesticide ResiduesPesticide Residues
Increased emphasis from all customers Applications of only approved pesticides at
labeled rates Follow all post harvest interval requirements Avoid application/drift of non-labeled
pesticides
Pesticide ResiduesPesticide Residues
Hidden problemCostly to detectMuch more extensive testing is being
required by more and more manufacturersRejections by manufactures and leaf
dealers
ConcernsConcerns
SCHIP EffectsSCHIP Effects
$0.61 per pack tax increase on cigarettes32% increase on cigars
– The cap on the tax changed from $48.75 per 1000 pieces to $402.60 per 1000 pieces
$23.68 per pound increase on roll your own tobacco
ConcernsConcerns
Input CostsAging grower populationLack of younger people beginning to grow
tobaccoAging Infrastructure
ConcernsConcerns
Increases on state cigarette taxesIncreases in state wide and city smoking
bans– NC and VA
QuestionsQuestions