Surry Business

Several reports about tobacco production and prices appeared this week. Despite, or because of, the federal tobacco buyout, tobacco production remains big business in Surry County, but prices are falling while production rises.

Richard Davis, writing today in Carolina-Virginia Farmer, says the 47th annual Summary of Agricultural Prices by the National Agricultural Statistics Service shows tobacco prices paid to U.S. growers have fallen each year since 2002.

“Using index numbers as a standard with 1990-2002 equal to 100, tobacco brought an average value of 108 in 2002. That fell to 107 the next year and to 94 for both 2004 and 2005. In 2006 the crop only brought an index value of 91, compare to that 1990-1992 average index of 100,” Davis wrote. “The fall in tobacco prices during this time correlates with the ending of the federal tobacco program, and is largely an expected result.”

Last week, also in Carolina-Virginia Farmer, Davis reported, “The effects of the federal flue-cured tobacco buyout continue to be felt in the Tarheel State. Flue-cured production is forecast at 342 million pounds in 2007, according to the latest Field Crops report from the National Agricultural Statistics Service. That is 6% above the 324 million pounds produced in the state last year.

“When the federal tobacco program buyout was implemented three years ago, one of the expected results was a drop in market prices and a corresponding increase in marketings.

“Flue-cured acres for harvest are expected to be around 163,000 acres in 2007, up 8,000 acres from last year’s 155,000 acres. NASS forecasts yield per acre at 2,100 pounds.”

Surry County growers produced 7.7 million pounds of flue-cured tobacco in 2006. At $1.50 per pound, that amounts to $11,550,000 in cash receipts. Planted acreage increased 9.5% from 2005, to 3,560 acres, but yields dropped slightly to 2,165 pounds per acre.

Surry County’s producers tied with Rockingham County’s for third-highest flue-cured tobacco production in the state, according to the N.C. Department of Agriculture’s latest report, and produced more than growers in Stokes and Yadkin counties combined.

The USDA full report on 2006 agricultural prices is here.

And for a snapshot picture of agriculture in Surry County, go here. Note that the average farm in Surry County has buildings and ground valued at nearly $450,000 and machinery and equipment worth more than $71,000. That adds up to nearly $660 million for the 1,300 farms spread across more than a third of Surry County’s 535 square miles.