· Ml fi £2 6» TOBACCO 5 THAT ON C igarettes take about four fifths of the tobacco used in the...
51
Transcript of · Ml fi £2 6» TOBACCO 5 THAT ON C igarettes take about four fifths of the tobacco used in the...
H s torio,arc h ived document
Do not as s ume content ref lects current
s c ient if ic knowledge , polic ies ,orpract ices .
Ml fi £2 6»
TOBACCO5 THAT ON
C igarettes take about fourfifths of the tobacco used in theUnited S ta tes. Output of 579 b i llion cigarettes i n calendar year196 8 was a record. Even thoughth e amoun t of tobacco used forcigarettes also increased slightlylas t year, i t was 2 percent belowth e 1 96 3 hi gh . S ince the midi 9so’ s the average quanti ty oftobacco used to make a cigare ttehas decli ned 2 percent a year.
T his year bo th cigarette output an d the amount of tobacco usedor cigare ttes may be below lastyear.
IN TH IS ISSUE
OU TLOOK
Tobacco P roducts - P er Cap i ta
F ore i gn Trade
L eaf S i tuat i on and Out look
Tobac co U s ed for C i garettes
“
Enli sted.
by
ECCllllNlC RESEARCH SERVICE
0 0 0 0 00
0 0
ILS. BEPI RI I ENI OF AG I ICHH IIRE
TOBACCOOUTIETS
R e c e n t Tre nd s In Ma n u fa c tu red P ro du c t s a nd Ex p o rt s
II. . I.C IG AR ETTES
M B
EMO
MIL. l B.
SMOKINGP R ODU CTION P R ODU CTION
MIL. I B.
C HEWING SNU FF
P R OD U CTION P R OD U CTION
1960'
6 5‘
6 6’
6 7'
6 8'
6 9 19 60’
6 5'
6 6’
6 7'
6 8’
6 9
A NN UA L Q UA R TER LY,A N N UA L Q UA R TER LY,
SEA SONA L LY AD J U STED SEA SON A L LY AD J U STED ,
AT A N N U A L R ATEs AT A N N U A L R ATES
LAST QUA R TER SHOWN ESTIMA TED .
U . S. DEPA R TMENT OF A G R ICULTU R E NEG . ER S 2 2 9 6 9 ( 9 ) ECONOMIC R ESEA R C H SER V IC E
T S 129 SEP TEMBER 19 69
TH E TOBACCO S ITUATION
App rove d by t he Out look and S i tuat i on Board , Sep tembe r 2 4, 19 69
CONTENT S
Summary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
T obacco P roductsC igare t tesC igars
C hewing tobacco ands nuf f
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
F ore i gn T rade 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
U . S exports and
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
F oreign productionand s ale s
O O O O O O O O O O O O O O O O O O O O O
O O O O O O O Q O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O O O .
O O O O O O O O O O Q O O O O O O O O O O
O O O O O O O O O O O O O O O O O .
O O O O O O O O O O O O O O O O
O O Q O O O O O O O O O O O O O O O O O
SUMMAR Y“
D espite a larger tobacco crop this year ,
a smaller carryover is reducing the prospectivesupply by around 3 percent from last
season . T h e supply, an estim ated bil lionpounds
,is down f or the fifth s traight year , but
sti ll ample .
T his year’ s tobacco crop, es timat ed at
billion pounds , is up 7 percen t from 1 96 8 ,
main ly because of a 5 percen t increase i n acreage
. T h e acreage increase refl ects upward adjus tments f or flue-cured tobacco farms tha tmarketed less than their marketing quotas las tyear
. Beginning carryover for this season(July 1 for flue- cured and cigar wrapper types;October 1 f or others ) is about 7 percent belowa year earlier.
Disappearance in th e marketingyear may tota l near the approximately billion pounds of las t year . D omesti c use of U S .
tobacco may be about the same or s light ly lower than i n Lit tle change is expectedin cigare t te output , and the downtrend in tobaccous e per cigarette is likely to continue .
U . S . cigarette outp ut this fiscal year maynearly equal th e 57 3 billion cigaret tes producedin Th e smoking-age population i s i ncreasing
,and consumer incomes are at record
levels .
But increa s ing c i garette prices and thesmoking-health pub li city are reducing cigare t teuse per person
,and possibly limiting th e number
of smokers Based on tax able withdrawals andshipments to overseas forces
,consum ption per
person 1 8 and older in calendar year 1 96 9 i s
averaging 2 -3 percen t below th e cigare tt e s of las t year .
T otal consumption of cigars and smokingtobacco in probab ly will do well tohold th e previous year’ s leveL Use of chewingtobacco may be steady and snuff will likely decline further .
Leaf exports this fiscal year may be nearlas t season’ s 57 1 million pounds (6 35 million ,farm- sales weight) . However , many non- tradit i onal foreign suppliers have been increasingproduction ; and this together with higher pricesof U S . tobacco is l i kely to preclude any sign i f i c ant gain in U S . export s .
Among major flue-cured expor ters , C anadarepor t s i t s 1 96 9 crop about th e same as la s tyear while Indi a’ s is larger. Although some200- 300 million pounds of old- crop S tocks have
The s ummary of t h i s report along Wl th a t able
on s up p ly and d i s ap pe aranc e was re leas e d on Sep tem
be r 2 4, 19 69 .
T obacco Leaf S ituation and Ou t lookQuo tas
,allo tments and price
suppor tF lue-curedBurleyMarylandF ire-curedD ark air-curedC igar tobacco
T obacco Used f or C igare t tesS tatis t ical SummaryLis t of T ables
TS 12 9
accumulated in R hodesia,the U N . sanctions
s till keep most of these stocks out of worldtrade .
T h e United K ingdom ,th e major U . S . export
destination,decreased i t s takings in
But i t i s sti ll too early to t ell if the U . K. willrebuild i t s lowered stocks from U . S . suppli esthis season. U . S . shipments to European C ommonMarket count re s rebounded in the pas t 1 2 months ,but o ther countries are actively competing f orthis market.
World tobacco export s (excluding S inoSoviet countries ) steadi ed in calendar year 1 96 8at bi llion pounds. T rade in 1 96 9 likely willnot be much different. Manufacturers are usingmore local product ion and further economizingon leaf us e as world cigarette output gains.
T h e trend toward increased imports ofcigare t t e tobacco into the United S tates cou ldcont inue in Th e trend was interruptedin as imports f or consumption totaled1 6 1 million pounds (leaf and scrap ), 1 1 millionbelow the previous year. U . S . manufacturerss tocks of imported cigarette types of tobaccolast July 1 reached a new record for that da te
,
about 2 percent above a year earlier. Las t year,U . S . manufacturers used about 45 percentforeign- grown cigar filler and scrap in cigars.They may use more impo rts in l 96 9/70becaus eof smaller domestic suppli es and higher prices.
Based on th e increase in the pari ty indexunder the formula required by law
,1 970price
support levels f or eligib le tobacco s will increaseabout 3 percent over 1 96 9.
U. S . flue-cured and burley tobacco suppliesfor are down from a year earlier. T h e
supply of flue- cured tobacco -the leadi ng kindfor cigare t tes and exports-u -is es t imated atmillion pounds
,down 3 percent. T h e 1 96 9 flue
TOBACCO
C IGA R ETTES
C igarette P roducti on andUse _a_ Litt le Lower
Ou tput and consumption of cigare t tes incalendar year 1 96 9 likely will be a li ttle below196 8 . There are more people of smokin g age, andconsumer incomes are at record levels. Butretail prices are higher , and smoking-healthpub licity is con t i nuing at a high leveL A lso ,
SEP TEMBER 1969
cured crop is currently indicated at million pounds , up 1 1 percent. But the carryoverinto the current season was down 9 percent.Even if exports can steady
,to ta l di sappearance
could dr0p a littl e in l ine wi th the domestic downtrend. But it s till will exceed production s o thecarryover of flue-cured tobacco next J uly 1 willli kely be reduced further.
Dur i ng the marketing year,ex
port s oi flue-cured (over four-fifths of tOtal U .S .
tobacco exports ) fell 2 percent belowdomest ic us e also declined slightly
.
C ombinati ons of reduced carryover andgenerally steady 196 9 production will result insmaller supplies of f i ree c ured,Maryland
,cigar filler
,cigar binder
,and cigar wrap
per. Dark air- cured supplies are about the sameas for the year just ended.
P R O D U CT S
C igare t te consumpt ion by U . S . smokers inthe first half of 196 9 was 2 6 7 billion
,down 1
About 65 percent of the 1 96 9 flue-cured tobacco crop had been marketed by S eptember 19and gross sales were 2 percen t above the comparab le period of 1 96 8 . T hrough that date, priceswere at record levels
,averaging 8 percent above
a year earlier. Farmers placed 42 milli on poundsof the 1 96 9 crop under Government loan. T hiswas 6 percent of marketings
,a smaller p ro
portion than in the similar period of 1 96 8. F or
las t season as a who le,1 3 percent of marketi ngs
went under loan.
T h e indicated supply of U . S . burleytobacco - the second leadi n g cigarette tobaccois 1 percent below a year earli er and 8 percentbelow the record. T h e crop is about thesam e size as last year. C arryover fromis estim at ed down 1 percent. During 1 96 8/6 9 (October-S ep tember ) estimated di sappearance exceeded production. D omestic us e p ro
bab ly fell 3 percent below the 546 million poundsof a year earl ier. Exports probably held near thehigh level of recent years.
overseas shipments are a litt le lower. Apparently the number of U S . smokers (or cigarette us e ,
per smoker ) is declining again this year. A s aresult
,to tal consumption by U . S . smokers is
likely to be down some 1 percent th i s year.P er capita use is declin ing some 2-3 percent.With prospects for these factors to conti nuein 1 970, cigarette output and consumption may dowell to match the 196 9 tOtal .
TS- 1 2 9 SEP TEMBER 1 96 9
Tabl e l .- C i garet t es : Out put , removal s , and cons ump t i on , 1 960- 69
R emoval s Tot al
Tax- exe t U . S .
Year Out p ut z P uer t o Ove r s eas c ons umpTaxab l e
Tot al Expor t s R i c o f orce s t i onOO
0O Bi l l i ons
1 96 1+
1 965 56 2 A
1 966
1 96 71 96 81 969 fl/
l 7 .Al s o i ncl ud es Vi rg i n I s l ands , G uam, Amer i can Samoa ,wake , and Cant on and End er
bury I sl ands . 2 / Al s o i ncl ud es s h i p s t ores and smal l t ax- exemp t cat egor i es . 3/ Taxab l e removal s pl us overs eas f orces . h/ Sub j ect t o re vi s i on . 5/ Es t i mat ed .
Comp i l ed f rom report s of I nt ernal R eve nue Servi ce and Bureau o f Cens us .
0
Tab l e 2 .- Ci gare t t e s and al l t obac co p roduct s : Consump t i on p e r cap i t a ,
1 8 y ears and d y er ( i nc l ud i ng ove rs eas f orce s ) , 1 96M
Al l t obacco f—f—gM — z
Al l t obaccoYear Ci gare t t e s‘g/ product s l / Number 2 P ounds p roduc t s
1 960 9 . 6 lT 1031 961 1T, 2 66 1 051 96 2 1031 963 1014i 96 h h , 1 95 981 965 1001 966 h , 2 87 971 967 u, 2 80 991 8 LT, 1 86 921 969 2/ 89
1 7 Unst emme d p rocess i ng-F we i gh t equ i val ent o f t h e t obacco ..g7 Es t i mat ed .
T S 129
T able 3 .- C i gare tt e e xp ort s f rom th e Un i te d State s
t o lead i ng de s t i nat i ons , July 19 68 June 1969 ,
January July
Othe r countr i e s
T ot al
percent from a year earlier . Bo th U . S . cons umption (taxable removals ) and shipments to overseas forces were lower. In the second ha lf of196 9, consumpti on will likely to tal near the 2 74b illi on a year earlier . R e tail prices likely willcontinue above a year earlier, wi th gai ns vover
1 96 8 probab ly smaller than earlier this year.
C igarette ou tpu t this year is esti mated 1-2percent below the record 579 billion in 1 96 8
(t ab le Exports,toge ther with shipments to
P uerto R ico and U . S . possessions, are expectedto tota l a little below last year.
C onsumpt ion per person (1 8 and older ) thisyear is estimated 2 percent below 1 96 8
when cigarettes (209 packs ) were used.
T his would be about the same rate of declineas last year when consumpt ion fell percent(table
In the first 7 mon ths of 1 969, bo th exportsand shipment s to P uer to R ico and U . S . po s
sessions held about the same as a year earlier,despite the winter dock str i ke. Among leadingdes ti nations
,larger shipmen t s went to Hong
Kong,P anama and C anary I s lands . S izab le de
clines occurred in shipments to NetherlandsAnti lles
,Kuwait
,P araguay
,West Germany,
I taly,and France “
(tab le U . S . cigaretteswere shipped to about 1 20 foreign countriesand territories during 1 96 8 .
SEP TEMBER 1969
C igaret te P rices 3351T axes Increasing
R eta il cigarette prices have conti nuedto increase due to higher wholesale prices andhigher S tate and local taxes. Further increasesin tobacco tax rates are li kely next year.
Manufacturers increased wholesale cigarette prices in May 1 96 9 and by J une retailcigarette prices (filter t i p , king size ) were 4percent above a year earlier, and 2 p ercen t aboveD ecember 196 8.
A sizab le rise is expected inthe BLS cigarette price i ndex by the end of theyear
,reflecti ng S ta te tax hikes.
S ince the start of . this year 17 S ta teshave increased cigarette tax rates . This compares with 8 S tates in all of 1 96 8. Th e weightedaverage S ta te cigarette tax was cents perpack in mid- 196 9 -up from cents a yearearlier .
Indus g y Offers End
C igarett e C ommercials
F T C Asks 193; Anti-cigaretteM
In mid- 196 9 the F ederal T rade Commiss ion and the Department of Health
,Edu
cation,and Welfare submitted annual reports
and recommend at ions toCongre s s as required bythe F ederal C igarett e Labeling and Advert isingAct of 1 965.
With a 2 - cent per pack tax effective October 1 in North C aro lina all S tates now tax cigare tte s . In C onnecticut th e curren t 16 -cent ratedoub le the ra te th at applied unti l J uly -is thehighes t S tate tax in the country. A subs tantialnumber of ci ty and local governments also tax
cigarettes. S tate and local taxes in New YorkC i ty add up to 1 8 cents a package, the highestin the country. T h e F ederal cigarette tax hasbeen 8 cents per pack since 1951 .
C igare t te manuf acturers have offered toend broadcast adver t ising of cigarettes by September 1 970
,or earlier
,i f broadcasters are
willing to cancel present cont racts . This propo sal was made in J uly at Senate C ommerceS ubcommittee hearings on cigarette labelingand regulat ion of cigarette advertising. T he
broadcast industry has made alterna tive propos al s . A s a result, Th e F ederal T rade C ommission has indi cated it may delay issuingits propo sed T rade R egulation R ule for re
quiring a health warning in cigarette advert ising.
T S 12 9
T h e 1 96 9 H EW report summarizes smok
i ng-health s tudies that became available afterth e 1 96 8 report. I t does no t recomm end F ederalcon t ro l over adverti sing.
Th e F T C recommended tha t radi o and te levi s i on broadcas ters be required to deVOte sign i f i can t broadcas t time f or anti - smoking p rograms and announcement s, and again recom
mended a complete ban on cigare t te adverti sing on television and radio
,and a strict health
warning label on cigare t te packages.
T h e F T C reiterated i t s 1 96 8 recommendari ons tha t a warning label and a s ta temen t ofthe tar and nico tine content of cigare tte smokeshould be required in all cigare t te adverti singas well as on cigarette packages. F T C recom
mended increased H EW spendi ng f or pub liceduca t ion on health hazards of smoking
,and f or
Na tional Ins ti tutes of Health research to developless hazardous cigarett es .
T he F T C also reported the effectivenessof the sta tement required on cigare t te packagesand descr i bed curren t forms of cigare t te advert i s i ng and promo tion. Th e C ommission felt thewarning s tatement had no t had any significanteffect on cigare t te sales. T h e 1 8 percent i ncrease i n adver ti sing expendi tures s i nce 1965
tended to off se t the effect of the warning label,
accordi ng to F T C .
C igare t te advert ising and p romo t i onal ex
p endi ture s totaled $ 3 1 1 million in 1 96 8,with
about 70percent spent for television . In th e past2 years, 39 percent o f adver ti sing expendi tureswere for 100millimeter cigarettes
.
In Augus t , the F ederal T rade C omm i ssionreported on tar
’ and n i coci ne content of smokefrom 1 1 8 brands of cigare t tes . This was thefifth report since F T C tes ting began in 1 967 .
C IG A R S
T h e decline in cigar consumption from theunusually high peak of 1 96 4 may continue nex tyear. C onsumption this year by U . S . smokersand Armed F orces overseas may to tal 2 - 3 percent below the 8 billion cigars smoked las t y ear(tab le
An estima ted 1 2 1 cigars and cigarillos thisyear are be i ng consumed on the average permale 1 8 and older. T his is 4 p erc ent be low 1 96 8
and 2 percent below th e 1 959- 6 3 average (table
SEP TEMBER 19 69
F ewer cigars are be ing produced this yearin bo th U . S . and P uer to R ican fac tories . C igarsfrom P uer to R ico account f or abou t one - eigh thof U S . consumpti on. D etai ls of taxable removals(domestic consumpti on ) of cigar s
,by revenue
class , through June of this year, show a con
t i nued decline f or the medium-priced cigars
R e ve nue Clas s and
re ta i l pr i c e
A~D (up t o
E (ove r 8 to 154 )F and G (ove r 1551)
T otal removal s
About half of th e lower price group A-D arecigarillo s (averaging less than half the weightof a full-size cigar ) . L as t year’ s cigari llosa les were up sharply. Manufacturers have i ncreased cigarillo adverti sing and promo tion inrecen t years .
Export s of c i gars (le s s than 1 percen t of
ou tput) have been about 10percen t lower s o farthis year than last. D uring the first 7 monthsof 1 96 9
,Japan remained a leading des tination .
Other sizable desti nati ons include the Uni tedKingdom
,R epubli c Of SOuth Africa
,the Bahamas
,
P ortugal, P anama, Bahrein, Iceland, and Kuwait.
L ittle cigars (cigare t te- size, not over 3pounds pe r thousand) have posted sizable gainsin the past 12 months over the previous year .
T axab le removals in 196 9 are likely to exceedby 200 million the . 1 96 8 total of million.
Li t tle cigars sell in the same general pricerange as cigare t tes .
SMOKING TOBAC CO
S ales D eclining Again
P roduction of smoking tobacco for pipesand roll your own cigare t tes this year is exp e c ted to to tal about 7 percent below th e 6 6
million pounds of last year (tab le T h e longterm trend has been downward
,and a fur ther
decrease is expected f or 1 970. Impor t s , mos tlyfrom the Netherlands and the Uni ted Kingdom ,
have increased i n recen t years but this year mayno t quite reach the 1 96 8 to tal of 5 millionpounds . T hey now account for about 8 percen tof U . S . smoking tobacco consumption.
- 7
TS- 1 2 9 SEP TEMBER 1 969
Tabl e Il a - Ci gars and smok i ng t obac co : Out p ut , removal s , an d con sump t i on
Un i t ed St at e s f act or i e sFrom
R emoval s P uert o Imp ort sOut put z
TR i c o
Exp °rt s
Taxabl e :ax
t axabl eexemp
6 ,681T 1 26 11831 141+ 52 61 93 809
7 ,899 1 80 91 1
1 93
1 68
8 ,uh5 1 76 850
2 10
1 83
7 ,a3h 1 92 1 ,1 1 h1 58 987
t obac co 6/
70. h
1 -56h . 8
6h . 1
0 60 0 2 0
7h . 1 71 . h65. h a. h
ou. 36u. 6
63 07 6 2 05
t i e s i n t h i s cat egory s i nce February 1 96 4. 2 / P r i or t o t h e embargo on i mp ort s f rom
Cuba (e f f e c t i ve February t h e ma j or share o f i mp ort ed c i gar s came f rom Cuba .
3/ To t al rm oval s (or sal e s ) f rom U . S . f ac t or i es p l u s t h o s e f rom P uer t o R i co , and i m
p ort s , mi nu s exp ort s . y Sub j ec t t o re vi s i on . 5/ Es t i mat ed . 6/ Af t er December 1 965,t axabl e removal s dat a rep la c ed by dome s t i c sal e s , and t ax- exemp t removal s dat a rep l ace d
by exp ort sal es . P r i or t o Jul y 1 96 2 and af t er De c ember 1 965, i mp ort dat a ar e f rom Cen
su s cl as s i f i cat i on cover i ng ma i nl y smoki ng t obac co ; f rom Jul y 1 96 2 t h rough De c ember
1 965, dat a rep re s ent t axabl e removal s of i mp ort ed smok i ng t obac c o rep ort ed by I nt ernal
R evenue Servi ce .
Comp i l ed f rom rep ort s o f t h e I nt ernal R evenue Servi c e , Bureau of t h e Censu s , and Con
sumer and Marke t i ng Servi c e , USDA.
- 8 ¢
TS- 1 2 9 SEP TEMBER 1 969
Tab l e 5.-Ch ewi ng t obac co , s nuf f , and smal l c igar s : Out p ut f or s pe c i f i ed p e r i ods
Year end i ng June
b not more t han 3 p ound s p er t h ou s and abou t c i garet t e s i z Sub j ect t o
revi s i on . 3/ P rel i mi nary es t i mat es .
Bas i c d at a comp i l ed f rom report s o f t h e I nt ernal R evenue Servi ce and Consumer and
Market i ng Servi ce , USDA .
TS- 1 2 9
Tabl e 6 .- Con sump t i on of c i gars , smok i ng t obac c o and ch ewi ng t obac c o p er mal e ,
and
snuff p e r p e r s on ,1 8 y e ar s and over ,
and i nd exe s f or sp e c i f i ed p e r i od s
Cons ump t i on p er mal e 1 8 y ear s and over
P e r i odLarge c i gar s and
c i gar i l l os 1]P ound s P ound s
1 957
l / Uns t emme d we i gh t equi val ent f or c i gar s and f i n i s h ed - p roduc t we i gh t f or al l ot h e r s .
g/ P re l i mi nary e s t i mat e .
- 10
D omes t ic us e of smoking tobacco th e firs thalf of this year, including impor t s , to taled3 3 million pounds
,5 percen t below a year
earlier . By midyear wholesale prices averaged7 percen t above year-ago levels. F or all ofthis year
,U . S . smoking tobacco consumption
may tOtal around 7 percen t below the 70millionpounds used las t year.
Exports are a small ou t let for U . S . emoking tobacco in packages , and f or J annary-J uly1 96 9
,they were about the same as a year earlier.
Major foreign desti na tions in 1 96 8 were theNe therlands
,Yugoslavia
,C anada
,Ireland
,Wes t
G ermany,and A us tralia .
Bulk Tobacco Exports
Expor ts of smoking tobacco in bu lk havetrended upward f or several years due to th e
growing popularity overseas of American- typeblended cigare t tes . T his year export s may no tgain above the 2 1 million pounds in 1 96 8.
This export catagory consists primar i ly of
specially prepared cigare t te leaf and c ut or
s hredded tobacco.
In the first 7 mon ths of 1 96 9 exports ofsmoking tobacco in bulk were 9. 9million poundscompared with million a year earlier.
Among leading expor t desti nations , increasedexpor t s s o f ar in 1 96 9 have gone to th e D ominicanR epub lic
,about th e same amount to I taly
,and
smaller shipmen t s to P eru and Spain.
CHEWING TOBAC CO AND SNUF F
C hewing T obaccoOutp ut May Gain
P roduction of chewing tobacco in 1 96 9maybe about 2 percent above the 65 million
pounds of 1 96 8 as per capita us e is s teadying.
S crap chewing is acc ounting for th e gain whileplug
,twis t
,and fine-c ut chewing tobacco output
may be down slightly . S crap chewing tobacco usessubs tantia l quanti ties of W isconsin binder andP ennsylvania filler
,while plug chewing uses
mainly dark air-cured and burley.
S in ce 1960,output of chewing tobacco h as
remained fairly s table after prior declines . Increases ln scrap and fine-cut chewing have aboutOffset decreases in plug and twis t.
Most chewing tobacco is consumed domes t i c al ly . Exports , mainly twist and plug, declined alm os t steadily i n the past decade topounds by 1 96 8 . In the firs t 7 months of 1 96 9
,
these export s were only pounds .
Snuff OuQut Lower
P roduct ion of snuff is es tima ted about 2percent less than in 196 8 and almos t one-fourthbelow output a decade ago. Snuff ou tput wasrela tively stab le prior to 1 956
,but has since
trended downward. T h e downtrend is expectedto continue .
Virtually all U . S . snuff ou tput is consumeddomestically
,main ly in the Sou th and Northw e s t
,
and in industries where smoking is hazardousor inconvenient . Snuff i s the principal domesti cout let for th e fire-cured types .
FO R EI G N T R ADE
U . S . E! P OR TS AND IMP OR TS
Leaf Exmrts Heavy ,But T railing Last Year
U . S . expor ts of unmanufactured tobaccoduring January -J uly were 10percent below lastyear’ 8 level and during th e rest of 196 9 they maynot equal those of a year earlier. F or thiscalendar year they may total slightly below th e599 million pounds (6 65 million farm- salesweight) of 1 96 8 , a longtime high. But they will
sti ll be th e second largest since 1 946 and about15 percen t above the 1 96 1-65 average.
Shipments made last fall in anticipa t ion ofla st winter’ 8 dock s tr ike swelled the 196 8 tota l.Much of the reduction s o far this year was dueto the dock str ike. March-J uly exports of 2 48million pounds this year were one-fourth abovethose 5 months of 1 96 8 .
F or J anuary-J uly 1 96 9 a decline in exportsof flue- cured-u -the principal export class
- 1 1
T S 12 9
a ccounted for most of the shortf all in U . S . leaftobacco exports (table There were moreshipments of burley and perique, but most o thertypes were lower. Export s of cigar types wereless than half of las t year’ s.
S iz able gains in takings by We s t G ermany ,
I taly,and South V ietnam failed to offset a
January -J uly declin e in exports to the UnitedKingdom
,the largest importer of U .S . tobacco .
Other declines were made by Japan, the Netherlands
,Ireland
,and T hailand. T his year’ s
export s to the United Kingdom were held downby the U . S . dock strike in th e first quar terbut have made a good recovery since. Lowerpriced tobaccos from several Asian and Africansources
,especially South Africa and South
Korea,made up for most of the decl ine in U . S .
supplies. Some of the European countrie s tha thave taken smaller shipments so far this yearhave been experiencing reduced economic activit y and changes in tax systems; the ir taking
'
will likely rebound next year.
Export s P rospect s 12
For the year ending next June 30,U . S .
leaf tobacco exports will do well to equal the571 million pounds (export weight) ofH indering U . S . exports are sub stanti al comp e ti t i ve supplies overseas -often avai lab le below the level o i U . S . prices - technologica lchanges in foreign manufacturing methods
, th e
conti nued tobacco-health con troversy,and high
er U . S . tobacco prices. F avoring U . S . export sare th e cont inued U .N. sanctions against R hodesian tobacco, the high quality of this year
' sflue-cured crop and the U . S . export paymentprogram . Also, stocks of U . S . tobaccos arestill at rela tively low levels in the UnitedKingdom and West Germany. T hus
,expor t s
will likely hold ab ove the 1 96 2 - 6 6 averageand just short of last year’ s level.
T h e U . S . export payment program wasexpanded effecti ve August 1 8 to includeMaryland, P ennsylvania filler
,shade grown cigar
wrapper, and P erique. T h e payment rate is5 cents per pound based on the unstemmedleaf packed weight or unstemmed packed weightequivalent.
In the export quanti ty was 1
percent above the level of and thevalue at $507 million was 3 percent higher.
Th e farm- sales weight of 6 35 million poundswas percen t higher.
SEP TEMBER 1969
T h e proposed EEC C ommon AgriculturalP olicy for tobacco is sti ll in the developments tage and alterna tives are being considered.
Discussions have been scheduled to consideragain the U K . membership. T h e impact ofthese changes on U . S . tobacco trade is s ti ll to bedetermin ed.
Government P rogramT obacco Exwrt s
U . S . tobacco exports under Governmentfinanced programs (T itle I P ublic Law 480)in to taled 37 million pounds- o valued at$ 32 million (tab le
T obacco exported for foreign currenciesunder T itle I , declined 3 milli on pounds in
as there were no sales to P akis tan.
Mos t of the expor t s for foreign currencies wentto South Vietnam and C hina (T aiwan ) .
Sales for long- term dollar credit (T it leI ) tota led million pounds sub stantially abovethe preceding year
,re f lect i ng a shift in program
emphasis from sales for foreign currencies . Th eP hilippines and C olombia received about halfof these exports .
Expor t s to West Germany rebounded afterthe decline when Germany imposed avalue-added tax . Several des tinations in South- Ieast A sia took larger shipments. United Kingdom -long the principal U . S . leaf export marke t -decreased takings about one-f i fth after 2years of gains . United Kingdom’ s currencydevalua tion in 196 7 increased i t s import cost s.I t also imposed higher tobacco duties last year.
As long as the economic sancti ons carriedon again st R hodesia by Great Bri ta in and theUni ted Nat ions continue
,U . S . tobacco export s
probably will be higher than they o therwise wouldbe . Th e high quality of U .S . leaf is a favorablefactor in foreign trade but many countr ies areproducing more tobacco locally
,or importing
more of their requirements from other lowcost p roduc d on areas such as the Far East
,
the Balkan countries,and certa i n areas of
Africa . Economic activity abroad is rela tivelyhigh and world cigarette consumpti on continuesto increase. But techno logical changes in manuf ac tur i ng and the increasing trend toward filtercigarettes mean tha t leaf requirement doesno t increase proportionately with cigarette consumption. Also , the EEC and United Kingdompreferential arrangements hamper the expor t sof countries outside these groups .
,
Ts- 1 2 9 SEP TEMBER 1 969
Tab l e 7 .- Uni t e d S t at e s exp ort s o f unmanu fac t ure d t obac c o by t y p e s an d
t o p r i nc i p al i mp ort i ng c oun t r i e s f or s p e c i fi e d p e r i od s
P er c ent
Fl ue- cure d
Bur l ey
Mary l andF i re and s un- c ure d
Gre en R i ve r
On e Sucker
Bl ack Fat ,e t c .
C i gar wr ap p e r
Ci gar b i n de r
C i gar f i l l e r
P er i que
St ems , t r i mmi ngs , and s c rap
Tot al 56 h . 7 90
Count ry o f d e s t i nat i on
Tot al 56u. 7 90
3] Sub j e c t t o rev i s i on .
2] Mal ay s i a and S i ngap ore .
Comp i l e d f rom p ub l i c at i ons and re c ord s o f t h e Bur e au o f t h e Cens us .
- l 3
TS- l 2 9
s al e s
Tab l e 8 .- Tobac c o exp or t s und er Government p rograms ,
and export s f or dol l ar s , f i s cal y ears , 1 955-69
Exp or t s under s p e c i f i ed Gove rnmen t p rograms
s al e s
Quan t i t y ( exp ort we i gh t )
Mi l l i on p ound s
wU'I
U'I
O
GD
H
&f~0\
val ue
Mi l l i on d ol l ar s
F0
47
“)
0
\0\
N0
h9 . 6
1 1 6A
SEP TEMBER 1 96 9
3MS .O
uu3 . 9
31 5. 9
Tot al
306 A
379 05
3h0. 1
3h2 . 9
i nc e 1 96 3 , mos t l y over s eas sup p l y t ransac t i ons , e s s ent i al l y e qui val ent t o d ol l ar sal e s .
l i mi nary . 3] Dat a not ava i l ab l e .
s al e s ( c red i t s f or re l at i ve l y s h ort p er i od s ) of (mi l l i on p ound s ) :1 967 , 1 96 8 , 1 969 ,
Tot al unmanuf ac t ur ed t obac c o exp ort s i nc l ud e CCC cred i t
1 96 11 , 1 96 5, 1 966 0
TS- l 2 9 SEP TEMBER 1 969
Tab l e 9 .- U . S . i mp or t s of unmanuf ac t ure d t obac c o f or c ons ump t i on and general , p r i nc i pal
cat egor i e s , and c ount r i e s o f or i g i n , f i s cal y ear , and J anuary-J ul y l 968
I mp ort s f or c on sump t i on Ge neral i mp ort s (arr i val s )
Cl as s i f i cat i on and
c ount ry of or i g i n
Mi l l i on pgund P erc ent Mi l l i on pound P ercent
97 91l 7 . h 6 2 2 5. h 68
1 h . 5 85 1 2 776 h . 3
Sc rap
Turkey 3 09 103 no 2
Ot h er c oun t r i e s 2 /Tot al c i gare t t e
t obac c o
. h 100 . 7 1 75
1 1 51 1 38680
Tot al c i gar t obac co h7 . 9 101 h0. h 1 1 3
S t ems . 6 1 67 -3 333
Grand t ot al h/ 1 3u. 7 91 2 h6 . 2 96
1 / P re l i mi nary .
2 / Canada , Gree c e , Cy p ru s , Lebanon , I nd i a , Korea .
‘fi/L e s s t han p ound s .
De t a i l may not add t o t o t al due t o round i ng
Comp i l ed f rom publ i cat i ons and re c ord s of t h e Bureau of t h e Census .
- 16
T S 12 9
Bo th th e quanti ty and average value of orien talcigare t t e tobacc o declined ( table 10)
T h e largest decline in import s for c on
sumpti on was in cigare t te leaf from Greece,while o ther principal sources supplied aboutthe same quant it ies. Th e increase in vo lumeof low-value scrap also reduced the c om
b i ned value.
Impor t s of cigar scrap increased but
sti ll rema i ned below the rela tively high levelof Most of the gain wasfrom the P hilippines , a leading s ource.
Oriental leaf arrivals were down fromlas t year. Mos t of the decline was in arrivalsfrom Greece. F lue-cured, burley leaf, andorienta l scrap ga i ned further.
F OR E IGN P R ODUC T ION AND SALES
World producti on of cigare t tes gained 4percen t las t year over 196 7 , as popula t ionand incomes rose. A further gain is expectedthis year
,but in terna tional trade in tobacco
is more steady because of rising local producti on in many areas and because of manuf ac tur i ng changes to economize on leaf use .
F lue-cured tobacco is the leading kindentering international trade. World tobaccotrade is sti ll being affected by sanct ions agains tR hodesian tobacco. T o fill the R hodesiandeficit, many foreign suppliers are increasingproduction and actively competi ng for a largershare of world markets. Even though mos tforeign-grown tobacco cannot match the quali tyof U . S . leaf, many coun tries can produce it andexport it for about half the level of U. 8 . prices .In tradi ng areas such as the Briti sh C ommonwealth and the EEC
,manufacturers have been
trying to develop supplies from within th e du typreference areas because of lower duties thannon-preferen t ia l tobaccos such as from theUnited S tates.
F lue-curedP roduction Gains
Harvest of foreign flue-cured tobaccosduring the first half of l96 9 -mainly in theSouthern Hemisphere -is es timated up 4 percentfrom the 955million pounds in 196 8 . Increasedplanti ngs and higher yields resulted in a largerharvest in Indi a
,despite some flood damage.
The Indi an Government is S ponsoring aprogram
_to increase output of export tobacco ,
SEP TEMBER 19 69
and to shift production into lighter so il areas.S ub sidies for barns
,wells
,seedlings
,and chem
i c al s are involved. Indian flue-cured tobaccoexport s averaged 44 cents per pound las tyear. This year surplus tobacco is be i ng offeredat much lower prices .
Th e 196 9 R hodesian flue-cured c r0p wasso ld a t secret aucti ons this sprin g with aguaranteed average grower return equivalentto 2 9 U . S . cents per pound. F or the 1970
flue-cured crop, th e producti on goal of 13 2
million pounds and the price guarantee arethe same as for 196 9.
Th e 196 9 flue- cured crop in C anada maytotal about the same as last year. In On tario,where most of the cr0p is grown , the marketingboard expects the cr0p to reach the targetof 200million pounds .
196 9 Oug h t Higher i_h_Greece an d T urkey
Oriental tobacco -also a light cigarettetobacco -ranks second in i n ternati onal trade.
‘
Greece and T urkey are the principal produc ers and exporters . T hese crops are normal ly lavailable for export 2 years after production .
T his year' s Oriental crops in both Greeceand turkey may be larger than las t year whenwea ther was unfavorab le .
196 9 T rade 2 1Ma or Exmrters
C anada exported 2 4 million pounds of
flue-cured tobacco in J anuary-May 1 96 9-m
nearly 3 million les s than a year earlier.
About 9 1 percent was shipped to the Uni ted
- 17
In Z ambia,production decl i ned a litt le
this year,and was considerably short o f pro
ducti on goals:
This year’ s smaller flue-curedcr0p averaged cen ts per pound
,cents
above last year. Th e 1970 flue- cured outputgoal of 25-30million pounds may not be reachedbecause of labor problem s and Bri ti sh buyersmay no t maintain their historic share of p urchases .
In G reece the 5-year plan f or tobaccogives production targe t s and several measuresfor improved producti on, marketi ng and exportpromotion. Th e 1974 producti on targe t s are2 30 million pounds f or orien tal leaf and 31
million f or burley. In T urkey,the tobacco
monopo ly is discouraging production of lesssaleab le tobacco from irrigated bottom lands .
Ts- 1 2 9 SEP TEMBER 1 969
Tab l e 10.- U . S . i mp or t s o f unmanuf act ur ed t obacco : Quant i t y
and average val ue , by k i nds ,
Quant i t y Val ue p e r p oundChange Changef rom f rom
Imp ort s _ f or consumpt i on
Ci garet t el eafScrap (or i ent al ) 1 /
Ci gar
l ea fScrapTot a l 2 /
G e neral i mport s
C i gare t t eOr i ent al l ea fF l ue—cured
and bur l ey l ea fScrap (or i ent a l ) 1 /
Ci gar
WrapperF i l l er 38 . hScrapTot al 2 /
ll /Turkey , Canada , G reece , Cyprus , Lebanon , I nd i a and Korea ..2 /I ncl ude s s t ems .
Tab l e 1 1 .- U . S . t obacco al l ot ment s , by k i nd s of t obacco , 1 969
Average s i z eAl l otment sof al l ot ment
Acre s
F l ue- cur ed ( l lBur l ey (31 )va . f i re- cured ( 2 1 )Ky .
- Tenn . f i re- cured (2 2 - 2 3 )Dark a i r- cured (35- 36 )Va . sun - mi red (37 )Ci gar b i nder (51 - 52 )C i gar f i l l er and b i nder(h2 - uh , 53
- 55)
Tot al 93h ,892
‘1 7Ty pe number i n parent he s e s . 2 F l ue- cured i s acreage- poundage wi t h . bas e quot a o f
mi l l i on p ound s and a nat i onal average y i el d goal of p ound s p e r acre .
T S 129
K ingdom . Other des tina tions included o therC ommonwealth countrie s , Uni ted S ta tes , D enmark
,and the Netherlands .
India’ s flue- cured export s of 1 2 millionpounds in January-March 1 96 9 were down 1 million from a year earlier
,reflecting th e smaller
1 96 8 crop Mos t of th e January-March export swen t to the Uni ted Kingdom ,
and were 8 percen tbelow a year earlier. Also receiving less thisyear were Egypt
,R us sia
,and Hungary.
In T urkey,unmanufactured tobacco exports
in January-April 196 9 were 65million pounds -8
million les s than a year earlier. This was mainlybecause of smaller consignment s to the Uni tedS tates . Shipment s to EEC countries and Eas ternEurope increased.
In Greece,unmanufac tured tobacco export s
in J anuary-J une 196 9 (from the large 196 7
crop and prior cr0ps ) a t 7 1 million poundswere 1 1 million more than a year earlier.
Most marke t s except the Uni ted S tates tookmore than in 1 96 8 . Average value of exportswas lower than las t year.
Br i tish T obacco S itua tion
T h e United Kingdom is th e single larges ttaker of U . S . tobacco
,accounting for about one
fourth of all U . S . exports of unmanufacturedtobacco . United Kingdom tobacco imports consistpr i ncipally of flue- cured
,used f or cigare t t e
manufacture for home consumption and exports.
T h e United Kingdom’ s trade has beenaffected for several years by increasing to
bacco duti es . Th e propor tion of leaf imports
SE P TEMBER 19 69
TOBACCO LEAF S IT UAT ION AND O U T LOOK 1 !
G rowth in U . S . leaf sales in th e 1960' s
has trailed the expansion in worldwide cigarettesales . U . S . manufacturers now us e less tobaccoleaf per cigaret te than a decade ago because anincreasing share is filter tipped
,and manufac
turers us e mos t of the s tem s and more reconsti tuted sheet tobacco and imported scrap andleaf. Manufacturers in foreign countries havealso been economizing in the use of leaf tobacco
,
_1/ All quantities in this section are statedin farm s ales weight equivalent unless o therwise no t ed .
and they are also buy i ngmore tobacco f rom otherareas at prices considerably below th e U . S .
prices .
in uns tripped form continues to decline . Manuf ac turers have in troduced cheaper t ipped brandsof cigare t tes with smaller tobacco con tent. T h efilter tip proporti on reached 7 1 pe rcen t of outputin 196 8 . As a result
,domesti c tobacco us e has
been about s ta tic f or several years,even though
cigare t te sales s t ill ga in. United Kingdom cigare t te expor t s , which la st year reached theirhighes t level since 1956
,rose further in the
firs t 7 months of 196 9,to 8 percent above a
year earlier .
S ince las t April,the duty on unmanu
f ac tured tobacco impor ted in to the United Kingdom from non-C ommonwealth sources is equivalent to a pound. C ommonwealth source swhich include the major flue-cured producersand exporters , India and C anada
,receive a
preferentia l rate equivalen t to $ 1 1 . 9 l -a
margin of preference equal to 1 8 cents apound.
United K ingdom manufacturers’ use (grossclearances from bond) declined 1 percent inth e firs t half of 196 9 and the U . S . share i hcreased slightly to 51 percent of fluecured clearances . With the U . S . dock s trikeof las t winter affecting shipments, da ta on
s tocks and import s (arrivals ) are distor ted.
But,by the end of J une , United Kingdom
s tocks of U . S . tobacco represented l year' ssupply compared with 1 year’ s supply ayear earlier. So some rebuilding of U . S . S tocksappears likely in But to offset lo ssof R hodesia supplies
,arrivals from non- tra
d i t i onal sources will continue to gain . T hesesouces include T anzania
,Malawi , P akis tan ,
South Africa,South Korea , and T hailand.
Many overseas users prefer the taste,
flavor, and aroma of U S . tobacco , but our higherwages and other production cos t s mean higherU . S . prices . Many o ther exporting coun trieshave lower wage rates and no production controls .Also tariff s as well as non- tariff barriers of
other governments limit U . S . tobacco export s .U . S . production declined from billion poundsin 1 950-54 to billion in 1 965-6 8 . So due to
TS- 1 2 9 SEP TEMBER 1 969
Tab l e 1 2 .-Un i t ed Ki ngd om t obacco : Import s ,
s t ocks ,
c l earance s , and exp or t s 1 96 “ 69
J ul y- June
I t em
Mi l l i on p pund s
I mp or t s ,by s our ce G ro s s cl earances
Un i t ed St at es 1 52 1 3& Ful l dut y rat e l/ : 1 61 1 69Commonwea l t h 1 1 8 1 30 1 32 Commonweal t hOt her 20 23 35 rat e g/ 1 58 1 37
Tot al 28& 305 301 Tot al 301 307 306
Exp ort s , manuf ac F l ue- cur edt ur ed Un i t ed St at es 1 2 8
Canada M7 M3R e- exp or t s , unmanu r ° I ndi a 38 82 MMf a c t ur ed R hode s i a 63 3M 1 6
Zamb i a andMal a 2 8 10
S t ocks , J une 30 Ot her 10 1 2 2 2
F l ue- cur ed 386 381 364
Tot al 2 85 2 88 2 82
Tot al &2 3 &2 o &1 3 : :Ne t cl earances 2 36 2 39 2 3 6
1/ Equi val ent t o p er p ound . g/ Equi val ent t o p er p ound .
Comp i l ed f rom of f i c i al Uni t ed Ki ngdom sour ces .
T S 129
reduced U . S . tobacco output and increasedforeign production
,the U . S . S hare of world leaf
output fell from 2 9 percent in the early 1950’ sto 19 percen t in th e pa s t 4 years.
Demand f or high qua li ty tobacco is Shownby th e i ncreased sales of cigarette brands c ontaining high proportions of U . S . tobacco. But
sales of brands containing lower priced leafcontinue to rise faster and the U . S . Share of
world output will probably decline further in theyears ahead.
1 2 10Marketing QuotasgmA llotments
By D ecember 1,USD A will announce the
1 970flue- cured marketing qu0ta on an acreagepoundage basis
,the nati onal average yield goal,
and the matching nati onal acreage allotment.F lue-cured growers in a 1 96 7 referendumapproved acreage-poundage quotas for 1 96 8-70cr0ps . Adjustment s in individual farm quo tasand mat ching acreage allo tments will reflectthe overmarke t i ngs and undermarke t i ngs forthe previous year. T his year’ s cr0p is belowthe quo ta so next year’ s effective quota willagain be ab ove the basic quota.
By next F ebruary 1,the 1970 market ing
quotas and acreage al lonn ent s will be announcedf or burley and certain other kinds of tobacco.Shortly after th e announcemen t , growers offire-cured ( typ es 2 1-2 3 ) and dark air-cured(types 35-36 ) will vote in referendums on whetherthey favor conti nuing acreage allotmen t quo tason their next 3 crops. If at least two-thirdsof the farmers voting approve
,the marketing
quo tas continue in eff ect.0 P roducers of burley,
Virginia s un-cured, cigar binder , andOh i of i llertyp es approved marketi n g quotas applicable tothe 1 970 crop ln' previous referendums .
F or P uerto R ico cigar filler, the C ommonwealth Government of P uerto R ico has set quotasfor many years .
Maryland and P ennsylvania tobacco growers di sapproved marke ting quotas in th e las treferendums ( 196 8 ) so Government price supporti s no t availab le for 1 96 8-70 crops.grown cigar wrapper ( types 6 1-6 2 ) i s not covered by marketi n g quo ta legi sla tion.
1 970 P rice Supmrt Levels
T h e overall price support for eligi ble1 970 tobacco crops will be about 3 percentabove the 1 96 9 price support levels -some 19
Shade
SEP TEMBER 19 69
percent above the 1 959 level. T his es timate isbased on the trend in th e parity index. Asrequired by th e Agricultural Ac t of 1 949, theprice support adjus tmen t f or 1 970will be basedon the average of the parity index in 1967
,
1 96 8,and 1 96 9 compared with 1 959.
F L UE- CUR ED
1 96 9 Auction Season
F lue-cured tobacco sold at auction marketsthis season th rough S eptember 1 9 averaged73 cents per pound
,5 cen t s ab ove the S imilar
period la s t season. About 6 5 percent of the 1 96 9cr0p had been marketed
,and marketings were
2 percent above las t year. Most grade averagesare higher and overall quali ty is bet ter.
T his year’ s cr0p apparent ly produce d alarger proport ion of bright thin tobacco which hasa low nico t in e cont ent and is desired by cigarettemanufacturers . So despite th e larger crop, th equanti ty of tobacco going under Government loanis smaller than las t year.
T h e 196 9 season go t underway on July 2 3with sa les in bo th type 14 and type 1 3 marke ts .
With the larger crop this year,the final sale
could come la ter than last year’ s closing.
T h e overall level of price support for the1 969 crop is cents per pound
,percent
above 1 96 8 . T his year with price suppor t again
Before 1960, price support levels f ormajortobaccos were s e t at 90p erc en t of parity price s .
T h e 1 960 amendmm t to the 1 949 law s e t 1 960
crop support prices at the 1959 level and providedf or the parity index ad jus trnent begi nn i ng in 1 96 1 .As a result of theadjus tment f ac tor,_mej ncreas ein the support level has
‘
averaged percentannually for 196 1 through 1 96 9; the percen tincrease in 1 96 9 was the largest since the 7percent increase f or flue-cured and burleytobacco in 1958. T his amendm ent dampened therate of increase in price suppor t s compared withthe rises tha t would have occurred under theo ld formula.
F lue-cured tobacco (types 1 1- 14 ) makes up60 percen t of U . S . product ion and about fourfifths of U . S . tobacco exports. I t account s f orha lf of the tobacco used in U . S . cigare t tes. Inthe United Kingdom cigarettes are made withvirtually 100 percent flue-cured tobacco
,but
o ther foreign cigarettes are made of severalkinds of tobacco .
138 - 1 2 9
Tabl e 1 3 .- F1 ue - cure d t obac c o au c t i on marke t s :
SEP TEMBER 1 969
G ro s s sal e s , average p r i c e ,
sal e s dat e s , t hr ough Sep t . 1 9 ,1 96 9 , comp arabl e 1 968 p er i o d
St at e
Mi l l i on p ound s
Os .- Fl a 1 6 1; 1 56
A1 1 Be l t s 1/
y Comp ut e d f rom unround ed da t a .
availab le on unti ed tobacco of all grades for theentire season in types 1 1- 1 3 markets , vir tuallyall farmers sell their crop in this form . Onlya small quan tity is sold a s tied tobacco.
F or all Belts combined,loan receipts
through September 1 9 were 42 million poundsabout 6 percent of marketi ngs ; in the comparab leperiod of the 1 96 8 seas on
,9 percen t went under
loan. F or th e enti re 1 96 8 season the loan takewas 1 3 percent .
Under the acreage-poundage program ,
flue-cured growers who comply with theiracreage allo tments receive price support onmarketings up to 1 10 pe rcent of their farmpoundage quotas . T obacco marketed i n excessof 1 10 percen t of a farm
’ s poundage qu0ta issub ject to paym ent of a penalty s e t by law at75 percent of the average market price for theimmediately preced i ng marketi ng year. (The
applicab le rate of penalty in the 1 96 9 marketingyear is 50 cents per pound. )
Any marketing above a farm’ s poundagequota is deducted from the following year’ s quotafor the farm ,
F arms having undermarke ti ngs
in 1 96 9 will have their 1 970quota s increased toenab le them to make up for their 1 96 9 under
dat e dat e
Cen t s
Jul y 2 3
marke t ings . For flue-cured as a whole thisyear , un dermarke t ings will exce ed overmarke t i ngs .
Despite a f rac d onal gain i n cigaret te output
,domestic disappearance declined last year
fo llowing the downtrend of recent years. Usedur i ng is likely to be near th e pastseason’ s leveL But a decli ne in cigare tteou tput could reduce th i s year’ s total a little.
With the win ter dock s trike slowing S hipments
,flue- cured exports las t season were 2
percent below a year earlier. Bu t o ther than .
the past 2 years, they were the largest sinceMain factors were the U .N. sanctions
agains t tobacco from R hodesia (formerly thelarges t exporter of flue-cured tobacco after theUnited S tates ), . the export payment program,
- 2 2
1 96 846 9 D i s appgarance Lower
During the year ended las t J une 30,di sappearance of flue-cured tobacco wasmillion pounds
,2 percen t below the previous
year ( tab le Both domesti c disappearance andexports declined. Th e total was also2 percent below th e average for the 1 958-67
crop years , alth ough last year' s exports were
above the 10-year average.
T S 12 9
and the high quality of recent crops . Exportsthis year are expected to continue well aboveth e years before 1 96 6
,and may equal
Th e United Kingdom reduced its takingslast season but U K buyers may take more ofthe high quali ty 196 9 crop. Wes t Germany’ stakings rebounded as manufacturers replenisheds tocks of U S tobacco . Aus tralia’ s gain intakings from the United S ta tes resulted from a »Shortfall in i t s crop las t year.
Th e preportion of U . S . flue- cured tobaccoexported in stemmed form has risen sub s tanti ally since 1 960as transportati on, s torage, andmanufacturing procedures are shifting. This isparti cularly true of th e flue- cured go ing to th e
United Kingdom .
1 96 9 170Sup p lies Lower
F lue-cured carryover las t J uly 1 to ta ledmillion pounds. This was 202 milli on
pounds below a year earlier, and 455 milli onlower than 1 965’ s record high.
Estima ted flue-cured tobacco acreage forharvest this year is 9 percent above 196 8. Thisreflects adju s tmen t s for the sub stantial undermarketing in the 1 96 8 season. Overall peracre yields average above la st season
,bu t f or
type 1 4 are below last year and abou t th e samef or type 1 3 . T h e G eorgia-F lorida area sufferedfrom heavy rains in mid season . T h e September1 forecast f or U . S . flue-cured production was
million pounds-4 2 percent above 1 96 8 .
U S . flue cure d tobac co exp ort s to p r i nc i p al c ountr i e s
gexport we i gh t )
Year ended June 30
Bas ed on unrounded data.
SEP TEMBER 19 69
U .S . f lue cured tobac co exp ort s :s temme d form of tot al
(uns t emme d equ i valent bas i s )
P e ree nt s ge
De s t i nat i on
U n i te d Other All
Ki ngdom count r i e s c ount r i e s
19 60
19 6 2
19 64
19 6 6
196 8
19 69
BUR LEY
Burley tobacco (type 3 1 ) is desired for i t sflavor and aroma for cigarette blend s ;and cigare t tes account for nearly 90p erc en t of domesticconsumpti on of burley. About 10 percen tof th e cr0p is exported.
Although domestic us e i s below the 1 96 4/65 peak
,manufacturers have increased the
burley proportion in their cigarette blends .
Nonetheless,changes in cigarette manufacturing
techniques as well as the leveling of cigare t tesales are lim it ing domesti c burley us e .
T he supply -production plus carryoveri s about 3 percent below the billion poundsin and 15 percent less than the recordhigh for T his year’ s supply ist imes last year’ s use compared with th e desiredra ti o of based on legisla tive formula. Butwith a reduced supply thi s year
,and with dom
e s tio use and expor t s about like last season,
carryover next July 1 will likely total belowth e J uly 1
,196 9
,leveL
By S eptember 1,Government loan S tocks
o f 1 96 3- 6 8 flue-cured tobacco -a component ofth e carryover and supply estimates aboveto taled 707 million pounds . Th e F lue- cured ~T obacco C oopera tive S tabili zation C orporation - the growers’ organization handling Gove rnmen t loans for price support - so ld 2 1 milli onpounds of old-cr0p tobacco to the trade in J ulyand August
,about half as much as in the same
period a year earli er. S tab ilization sold 156million pounds in the year ended las t J une
,about
doub le th e previous year’ S to tal. T his season’ ssales will probably not gain because manuf ac turers are replacing their usings from auc
t ion purchases.
SEP TEMBER 1 96 9TS—1 2 9
Tab l e 1 5.- Bur l e y t obac c o , t y p e 31 : Dome s t i c s up p l i e s , d i sap p e aranc e , s ea s on
average p r i c e , and p r i c e s up p ort op erat i ons f or s p e c i f i e d p er i od s
D i s ap p earanc e 11 /
Year P roduc t i on Sup p l yTot al Dome s t i c Exp or t s
Mi l . 1 b . Mi l . l b . Mi l . l b .
P l ac ed under Gove rnment l oan R ema i ni ng i n
s t ocks on
Quan t i t y Augus t 31 , 1 969
.Sj 3h8 . 9
y Year b eg i nn i ng Oc t ober 1 .
g/ Sub j e c t t o revi s i on .
jfif Through 1 959 - 90 p erc ent o f par i t y p r i c e ; 1 960 s e t at 1 959 l eve l ; from 1 96 1 on,ad j us t e d t o re fl e c t
r e l at i ve change b et we en 1 959 p ar i t y i nd ex and ave rage o f p ar i t y i nd ex f or 3 mos t re c ent cal endar y e ars .
.g/ Ac t ual l oan s t ocks on a p acked~we i gh t bas i s ave rage about 1 1 p erc ent l e s s t han t h e s e farm- s al e s
we i gh t fi gures2 / About 9 mi mi on p ound s of t h e s e h ol d i ng s have been s ol d .
P re l i mi nary es t i mat e s .
- 25
TS 12 9
Growing popularity of American- typeblended cigare t tes abroad has increased worlddemand f or burley . However
,mos t of this
marke t i s supplied by foreign producers oftena t prices that are less than ha lf the U . S . levels .J apan
,I ta ly
,S outh Korea
,Mexico
,and Greece
are among the countries tha t have increasedexports . These areas plus Malawi
,Z ambia
,
and Bulgaria are planning further increases.
196 8 16 9 Disap p earance Smaller
D omes t ic us e of burley tobacco f or th e
year now ending probably will to tal about 3pe rcent below the 546 million pounds used i n
( tab le Export s are equaling the 53million pounds of las t year . Based on theseprospec ts tota l disappearance would be some2 percent below the 599 million pounds in
leaving a carryover on October 1,
1 96 9,about 1 percent below th e mil
lion pounds of a year earlier.
Based on J uly 1 s tocks , disappearance f orth e first 9 months of the marketing year was42 5 million pounds
,17 million smaller than in
the same period of a year earlier . T h e declinewas in domes t ic us e ; export s were larger. Domm e s t i c use to taled 3 87 million pounds , 2 1 millionpounds below and 8 million poundsbelow 1 96 2 -6 6 average for the period. T h e i h
d i c ated disappearance of burley would implydomestic manufacturers are not main tainingtheir use in l i ne with cigare t te output. Amongthe secondary outlets for burley
,producti on
of smoking tobacco and plug chewing tobaccoare declin ing .
F or the firs t 10 mon ths this marketingyear
,burley exports to taled 45 million pounds ,
one-fourth above those of a year earlier. Ex
ports to West Germany, th e leading des t ination,were sharply above the low level a y ear earlier.
Larger exports than a year ago weremade to the Netherlands
,Belgium
,Swit zerland,
Thailand,and the P hilippines . Among the Other
leadi ng U . S . export de st i na ti ons , P ort ugal ,Sweden
,D enmark
,and Hong Kong have been
taking less . Foreign burley production didnot gain las t year for the firs t time in severalyears
,bu t the record-high U . S . auct ion prices
for the 196 8 burley will make it harder for U . S .
burley to compete i n Greece hassignificantly increased exports especially to theEEC where Greek supplies enter duty-free .
T h e Greek price is well below ours and theirquality is reportedly improving .
SEP TEMBER 19 69
l 9o9 z7o Supp lies S light lySmaller ; L oan Holdi ngs Up
T h e S eptember estimate of the 1 96 9 burleycrop is 56 6 million pounds -fractionally above1 96 8 . Acreage for harvest and average yieldper acre are about the same as las t year.
Th e total burley s upply (indicatedcarryover plus the new crop ) is about 1 percentbelow the million pounds in and5 percent below 3 years earlier . T h e prospectivesupply equals about times probab le di s app earanc e or about the same ratio as inbut down from the peak of 3 inT h e desirable ratio (based on legislative formula)is 2 . 8.
By August 3 1,1 96 9 , Governmen t loan
s tocks were 349 million pounds , compared with3 2 6 million a year earlier. This increase wasdue to smaller sales from C C C loan s tocks.L oan placement s from the 1 96 8 crop were alit tle below those in 1 967 .
Auc t ion sales usually begin in late November . T h e 196 8 crop so ld for a record average of cents per pound
,with 10percen t of
the cr0p placed under loan. T h e price supportlevel f or 1 96 9 burley is cen t s per pound,about 4 percent above 1 968 .
MA R YLAND
T h e chief outlet for Maryland tobacco(type 32 ) i s in th e manufacture of cigarettes.Some is also used as cigar filler dependingupon availabili ty and prices of certain grades.About one- third of th e cr0p is exported. D i s
appearance S ince 1950 has varied irregularlybe tween 3 1 million and 40 million poundsannually but f or the marketi ng year now endingmay reach a new high.
196 8 16 9 Use Gains
T o tal di sappearance of Maryland tobaccoduring the first 9 months of the marketingyear that began October 1
,196 8
,was 2 9
million pounds -about 7 million above a yearearlier. Export s were down in but
domesti c use was up considerab ly. U . S . manuf ac turers are apparen t ly using moreMarylandtobacco in cigarette blends. Disappearance i sexpected to total about 7 million pounds abovethe 36 m i llion pounds of the previous year.(table
SEP TEMBER 1 96 9TS—l 2 9
Tabl e 1 6 .-Mary l and t obac c o , t y p e 32 : Dome s t i c sup p l i e s , d i s ap p e aranc e , s eas on
averag e p r i c e s , and p r i ce sup p ort ope rat i ons f or s p e c i f i ed p er i od s
D i s ap p e aranc e ‘g/
Year P roduc t i on Sup p l yTot al Dome s t i c Exp ort s
Mi l . Q); Mi l . pp, Mi l . Mi l . 1 h . Mi l . lg ,
Mi l . 1 b .
‘1/ F or marke t i ng quot a purp o s e s , t h e carry ove r and t ot al s up p l y of Mary l and t obac c o are cal cul at ed as
of January 1 fal l i ng wi t h i n t h e marke t i ng y ear- oc t ober 1 t hrough Se p t ember 30. 2 / Year beg i nni ng Oc t
ober 1 .‘3/ sub j e c t t o revi s i on ,
.3/ Through l 959- 90 p er c ent of p ar i t y p r i c e ; 1 960 s e t at 1 959 l eve l ;from 1 961 on
,ad j us t ed t o re fl e c t re l at i ve chang e b e t ween 1 959 par i t y i ndex and average o f par i t y i ndex
f or 3 mo s t re c ent cal endar y e ar s . l oan s t ocks on a packed~we i gh t bas i s ave rag e about 2 p e r c ent
l e s s t han t h e s e farm- s al e s we i gh t f i gure s . 6/Marke t i ng quot a not i n e ffe c t s i nc e ove r one - t h i rd of
growers vot i ng d i s ap p roved ..Z/Auc t i on marke t ave rage .
*P re l i mi nary e s t i mat e s .**Sal e s .
T S 129
Exports of Maryland tobacco for themarketing year just ending may be 3 millionbelow th e milli on pounds in and1
'
million below the average for th e precedi ng5 years . In the firs t 10months of the marketingyear
,exports were 19 percent be low t the same
period a year earlier. P rices for th e 196 8 cr0paveraged 12 percent higher
,
than for the 196 7crop. Exports to Switzerland, th e prin cipaloutlet, were down 42 percent. Belgium andSpain also cut their takings but shipmentsto We s t G ermany and P ortugal increased.
196 9170Supplies Lower
By next J anuary l -the ’ date specif i edfor marketing quota calcula tions -carryoverprobab ly will fall furth er from this year’ S82 million pounds because disappearance isexceeding th e 196 8 production. Th e Septemberestimate of the 196 9 Maryland crop is 32
million pounds,about 2 percen t above 196 8
sales . For the fourth year , acreage allotmentsare no t in effect, since growers di sapproveda marketing quota for the 196 9 cr0p. With thereduced carryover
,supply will be 10
percen t less than in
Auction sales of the 1 96 8Maryland tobaccocr0p began Apri l 7 and ended J une 2 7, with arecord average price to growers. Overall quali tyof offerings was higher than last year, and pricesfor most grades advanced.
F IR E-CUR ED
Fire-cured, tobacco is used mainly formaking snuff
,and secondly for roll and plug
chewing tobacco,cigars
,and s moking tobacco.
S ince production of mos t of these productshas declined
,th e us e of fire-cured tobacco has
also fa llen. Exports -accounti ng for about ha lfof the to ta l di sappearance -have held up betterover the past decade than domesti c use becauseof s teadier demand overseas for products usingfire-cured tobacco and its unavailabili ty fromother suppliers.
196 8 16 9 D isappearanceec ines
Disappearance of fire-cured tobacco (typ es2 1- 2 3 ) during the first 9 months of the marketi n gyear that began October 1
,196 8
,was 36
million pounds,about 1 million below a year
earlier . Exports were down subs tant ia lly butdomestic use gained. In additi on, a ‘fire lossof 5 million pounds in type 2 2 ‘ in April 196 9
SEP TEMBER 1969
is f urther reducin g the carryover. In October196 8-June 196 9, snuff output was 3 percent lessthan a year earlier.
Based on th e indicati ons through J unedomestic use of V irgi nia fire-cured tobacco inthe year i s to taling a little below theprevious year’ s level but domestic u se of themuch larger-volume Kentucky-T ennessee t ypesmay gain about 2 million pounds (excludi ng fireloss ) .
Virg i nia fire-cured export s in October1 96 8-July 196 9 of million pounds weresharply below the million a year earlier.
Exports to Norway,the leading destination
,were
cut in ha lf due to inventory adjustments. Otherdecreases were recorded for Sweden
,United
Kingdom,and West Germany.
Supplies Lower
C ombine d supplies of the fire-cured typ esfor -u -estimated carryover and production-w are 7 percent below the 130million poundsof a year earli er and 16 percent below 2 yearsearlier. C arryover a year hence will show a
F or the year endi ng this September disappearance is down abou t 5 percent from last '
season’ s 52 million pounds. T his still meansabout 9 million pounds more have been usedthan were produced las t year. C arryoverstocks thi s October 1 are probably about 1 2percent below the 90million pounds of last year(table
Exports of fire-cured tobacco in the seasonnow ending may to tal a four th belowTh e decli ne is occurrin g in bo th the V irginiaand Kentucky-T ennessee types . Exports ofmillion pounds of Kentucky-T ennessee typesduring October 196 8J u1y 1 96 9 were 2 3 percentbelow a year earlier. T h e Netherlands -firstranking out let -cut takings 40 percent. T ax
changes have reduced the overall level of Dutchimports i n 196 9. But 2 o ther leading out lets,France and Belgium , have taken more types2 2 -2 3 tobacco .
T h e September es t imate of fire-cured produc tion was 40. 1 million pounds , 4 percent largerthan las t year. This would s ti ll be about 4
million pounds below the esti mated use duringthe current marketi ng year (excludi ng fire loss ) .Acreage for harvest is larger. Average yieldper acre is in di cated to be about the same asl ast year.
SEP TEMBER 1 96 9
Tab l e 1 7 .- F i re -
cur ed t obac co , Kent u cky- Tenne s s e e t y p e s 2 2 - 2 3 , and Vi rg i n i a f i re -
c ure d
taqxe 2 l : .Ac reage , y i e l d , p roduc t i on , c arry ove r , s up p l y , d i s ap p earanc e ,
s eas on average p r i c e , and p r i c e s up port op erat i ons , 1 965- 69
Beg i nn i ng s t ocks , Oc t ob e r 1
P rod uc t i onMa nufact ure r s Und e r
Tot alsu p p l y
and o t h e r l oan
D i s ap p earanc e Ave rage G ove rnment l oan
p r i c eP er c ent age o f
Tot al Dome s t i c Expo rt s 2 p e r pound Quant i t yc rop
1/ Bas ed on Se p t ember 1 crop p ro s p e c t s and e s t i mat e d u t i l i z at i on . g/ I nc l ude s mi l l i on p ound s f i rel os s , Apr i l 1 969 .
P re l i mi nary e s t i mat e s .
T S- 12 9
fur ther decline from the curren t level. By August3 1
,stocks under loan were sub s tan t ially under
a year earlier .
T h e average support level f or 1 96 9 firecured is cents per pound
,an increase of 4
percent over 1 96 8 levels . Las t season’ s averagepr ice wa s a record cen t s - 1 2 percent ab ovethe preceding year.
In Malawi,the chief fire- cured exporter
besides th e United S ta tes,1 96 9 s ales at
million pounds were down about a four th from1 96 8.
Auction prices this season averaged 30cen t s per pound, sub s tantially above la s t year.
Ma lawi has a new program of limiting product ionand improving quality.
DA R K AIR -C UR ED
D ark air- cured tobacco ( types 35- 37 ) ismainly used in manufac ture of plug
,twist
,fine
c ut chewing tobacco,and snuff
,and also to some
ex ten t f or smoking tobacco and cigars. P roduction and us e have declined abou t half in the pas t2 decades . T h e decline has been proportionatelygreater for expor ts than domestic us e . Export snow account f or about one-fifth of annual di sappearance . In most recent years
,over half
of the dark air-cured expor t s have been in theform of B lack F at , a s em i p roc e s s ed productin tended especially f or sale abroad .
Disappearance of dark air-cured tobaccoduring th e first 9 months of th e currentmarke ting year was 14 million pounds
,about
million pounds below a year earlier. Expor t sdeclined while domesti c us e steadied.
F or th e year ending September 30,1 96 9
,
to tal d i s ap p earnace is expected to be 3 percentbelow the 1 9 million pounds of las t year.
T his wou ld mean a carryover about the same asth e 6 2 million pounds la st October 1 (table
Domestic us e of dark air-cured probablywas about unchanged from a year earlier . InOctober 196 8-J une 1 96 9, the manufacture of plug,twis t
,and fine-cut c h ewng tobacco was sligh t ly
le ss .
Exports of dark air and s un-cured tobaccoin probably to taled a li t t le below the
million pounds of a year earlier. T his i ne ludes an allowance for B lack F at.
SEP TEMBER 19 69
F i re cure d and dark a i r cured tobac c o loan s tocks ,Augus t 3 1 , 19 6 7- 69
End of Augp s t
Vi rgi n i a
t ype 2 1
Ky .- T enn
t ype s 2 2- 2 3
Ky .- T enn
t ype s 35 36
Vi rgi n i a,
t ype 3 7
S upplies C ontinue Large
With little change in 1 96 9 cr0ps and carryovers
,to tal supplies are es ti mated about
th e same as las t year’ s 8 1 million pounds !
about 4 times annual us e .
Th e average suppor t level for the 196 9
dark air- cured crop is cents per pound, 4percent above 196 8. Last season the cr0p averaged a record- high cents per pound - l 6
percent above 196 7. S ales vo lume was largerand most grade prices were higher and quali tyimproved.
Export s of Black F at were millionpounds in October 1 96 8-J uly 1 96 9
,million
below a year earlier. Exports to major des tinations in Africa dropped sharply. Exports of Qp_e_Sucker leaf were above a year earlier primarilyBecause South V ietnam took million poundsversus none in th e like period of
Belgium,which took million pounds las t
season,
c ut its takings sharply. Export s of
Green R iver leaf in October 1 96 8-J uly 1 96 9
held near a year earlier even though the UnitedKingdom and Aus tralia
,the leading destinations
,
c ut takings slightly .
Th e S eptember es t ima te of this year’ scrop is m illion pounds-~about th e same aslast year and 2 m i llion above 1 96 7’ s recordlow . Acreage for harvest of dark air- cured(types 35- 36 ) is es timated to be a little higherthan las t year’ s level; average yield per acreis indicated to be down slightly after las t year' 8gain . Th e 1 96 9 t ype 37 acreage is the same aslas t year
,and th e indica ted yield may be up
moderately.
T S 12 9
L oan receipts of million pounds las tseason -4 percent of sale S -were sharply belowthe 1 96 7 s eason and the lowest since 1 958.Mi d1 96 9 loan holdi ngs were th e leas t S ince 1 96 2 .
C IG A R TOBAC CO
C igar leaf tobacco s (types 4 1 - 6 2 ) areclassified according to usage in cigar manuf ac
ture -filler,binder
,and wrapper . A secondary
outle t is in S crap chewing tobacco . In the pas tsevera l years recons tituted tobacco sheet hasreplaced na tural leaf in bo th cigars and cigare t te s . In addi t ion the trend toward slimmercigars is reducing leaf requiremen t s.
U . S . and P uerto R ico cigar leaf product ionhas been declining since the early 1 960’ s whileimports of filler leaf and scrap have risen.
L as t year use of imported filler exceeded us e ofdomestic filler for the firs t ti me on record.Th e P hilippines ranks firs t among foreignsuppliers . About 1 10million pounds of domes t icleaf are used annually while about 75 millionpounds are imported.
F or the firs t 9 mon ths of themarketing year
,t0ta1 di sappearance of U . S .
cigar filler tobacco (types 41-46 ) was 46million pounds
,down 2 million from a year
earlier. Th e decline was in P uerto R ican filler ;P ennsylvania and Ohio types were about thesame . In th e same period cigar tobacco importsgained .
During October 1 96 8-J uly 1 96 9,filler ex
por ts - a relatively small par t of to tal d i s app earanc e -were million pounds
,million
above a year earlier. C anada and F ranceaccounted f or mos t of th e shipments.
Th e filler disappearance may beS lightly below the 65 million pounds of a yearearlier. D i sappearance of P ennsylvania andOhio types will likely be about the same as
and P uerto R ican lower (table
D uring October 196 8-June 1 96 9, US . manuf ac turers used 59 million pounds of foreign cigartobacco (imports f or consumption ) , or 5 millionmore than a year earlier. T his increase issupplementing reduced U .S . supplies . I ncreased
SE P TEMBER 19 69
impor t s from the P hilippines , a major s upplier
,account for the gain. With domestic
supplies declin ing further in manuf ac
turers may draw even more heavily on foreignleaf .
F oreign grown cigar leaf S tocks in theUni ted S tates on J uly 1 tota led 93million pounds,down 5 million from a year earlier. P hilippinetobacco gained in this period
,but D ominican
R epublic tobacco declined.
C i gar tobac co i mport s for cons ump t i on,Oc tobe r- June ,
C ountry
P h i l i p p i ne s
D om i n i can
R epubl i c
Braz fl
C olombi a
T otal
C igar B inderD isappearance Gains
T h e disappearance of C onnec ticutValley b inder tobacco is es timated about 2 million pounds below the 8 million pounds of theprevious season . Bo th exports and domesti c us eare declining .
C arryover for Oc tober 1,196 9
,
i s expected to drop to a new low -some 3 million pounds under th e l 1 million of a year earlier.
During the first 10months of the currentmarketing year
,export s of C onnecticut Valley
binder were million pounds compared wi th2 . 1 million a year earlier. Spain, which accounted f or two- thirds of the export s las t year ,
C igar binder disappearance for October1 96 8-J une 1 96 9 was 2 4 million pounds , about5 million above a year earlier. For C onnect icutV alley binder (types 51 domesti c us e andexports fell while Wisconsin binder (types54-55) gained. Th e major outle t for Wisconsintobacco is scrap chewing tobacco. P roductionof scrap chew ing tobacco gained in the pastyear .
T S 129
F ore i gn~grown c i gar leaf s t ocks ,
J uly 1 , 196 7- 69
C ountry [U l lfl
°f196 7 196 8 19 69
or i
has not taken any s o far this year. Expor t s toWes t Germany and C anary Is lands are downconsiderab ly .
Th e di s appearance of Wisconsintobacco will gain s ome 4 million pounds abovethe 17 million pounds in This wouldleave s tocks at a record low -some 7 millionpounds below the 49 million pounds of October1,1 96 8.
Durin g the first 10months of the curren tmarket ing year
,exports of W isconsin tobacco
were pounds compared with ayear earlier . S izab le shipments went to Spainand the C anary I s lands in contras t to none in
Les s was shipped to the Ne therlands;none went to C anada or West Germany s o farthis year.
C igar Wrapper D isappearance S teadies
D isappearance of shade- grown cigar wrapper ( types 6 1 - 6 2 ) ln the year ended J une 30was
million pounds,about the same as a year
earlier. Domes tic us e was higher but expor t swere down . T h e 1 96 8 crop was a lit tle largerthan the previous year and prices averaged 4percen t higher. C arryover S tocks last July 1
were 1 million below a year earlier.In comparing the 2 wrapper types
,Georgia
F lor ida wrapper disappearance gained whileC onnecti cut Valley wrapper decl i ned. Th e 196 8crop prices averaged one- third higher in theC onnecticut Valley than in Georgia- F lorida.
F or both C onnecti cu t Valley and G eorgiaF lorida cigar wrapper , th e 4 leading des tina tionseach decreased their takings in Wes t
SEP TEMBER 19 69
G ermany,
th e leading des tina t ion, accoun tedfor mos t o f the decline , but C anada , Uni tedK ingdom
,and C anary I slands also took less.
D es ti nations tha t increased takings of GeorgiaF lorida wrapper were Belgium ,
Swi t zerland,and Sou th V ie tnam .
U . S . a_n_c1 P uer to R icanSuppl ies 9 D ecline
Supplies of U . S . and P uerto R ican cigartobacco will decline from continuingth e pos twar trend. October 1
,1 96 9
,carryover
is down and prospecti ve production is lower.C igar filler and binder supplies are down s ub
s tanti al ly , and wrapper s upplies are also lower.
September 196 8-Augus t 196 9 sales fromGovernment loan S tocks were higher than aearlier , but loan receipt s were also higher.
By Augus t 31, Government loan s tocks of cigartobacco were below las t year’
3 to ta l.
Ohio filler acreage is es tima ted to be thelowes t on record
,some 7 percen t below 1 96 8 .
Yields may also be lower . As of S ep tember l, thecrop was expected to be about 3 . 2 million pounds ,or about 14 percent below last year . Th e crop ,plus the lower carryover, will provide a to talsupply f or about 3 million pounds belowla s t year and th e smalles t on record.
C i gar t obac co loan s tocks ,
Augus t 3 1 , 19 6 7- 69
Oh i o (42 - 44 ) .2
P uert o R i can (46 )C onn. Valle y (51)C onn. Valle y (52 )Sout he rn Wi s . (54 ) .7
Nort h ern WI S . (55)
T otal
F iller : P ennsylvania filler acreage isdown an es timated 5 percen t from 196 8 . Asof S eptember 1
,th e cr0p was indica ted at
million pounds -about the same as in196 8
,which was the smalles t crop s ince the
1930’ s . T h e new cr0p plus the reduced carry
over will provide a supply about 3 percentbelow the 146 million pounds of the pas t seasonand th e least in 12 years .
Ts- 1 2 9 SEP TEMBER 1 969
Tabl e l 9 .- Ci gar t obac c o , t y p e s h1 -6 2 : Dome s t i c s up p l i e s , d i sap p earanc e ,
and s eas on average p r i ce s , f or 1 965- 69
Di sap p earanc e Ave rage
Beg i nni ng Tot alP roduc t i on
s t ocks‘l / s up p l y
Tot al Dome s t i c Export s
Th ous and
951
l , h1 9
8&. h
*l 9o. 2
See foot not e s at end of t abl e .
n a4 !
TS- l 29 SEP I‘M ER 1 96 9
Tabl e l 9 .—Ci gar t obac c o , t y pe s lt1 -6 2 : Dane s t i c s up p l i e s , d i sapp earanc e ,
and sea s on ave rage p r i c e s , f or l 965- 69- Cont .
Sup p l y
Th ous and
1 7 .
&2 l . 5
*l l l . 0*2 9h . 3
1/ Oc t ober 1 f or t y pe s 111 - 55; Jul y 1 f or t y p e s 61-6 2 .
2/ Sub j e c t t o revi s i on .
3/ P uert o R i can p lant i ng oc cur s l at e i n cal endar y ear ; p roj e c t ed f or 1 96 9 .
y Excl ud e s payme nt by P uert o R i can Governme nt .
P re l i mi nary e s t i mat e s .
35
T S- 12 9
Th e carryover of P uerto R ican filler onOc tober 1 is es timated about 7 millionpounds below a year earl i er and probably anew low . P uerto R ico filler is plan ted la te inth e year and harves ted in the early months ofth e fo llowing year . T h e P uerto R ican Governmentha s announced a quo ta of 2 2 million poundsabout 3 t imes th e ex tremely small harves t ear ly
“
this year. Acreage has been declining since1 964, s o product ion has been considerably belowth e announced qu0ta for the pas t several seasons.But despite the large quo tas th e 1970 harves tcould approximate the “previous year’ s sincerainy weather c ut this year' s yields sharply.
T h e s upply seems likely to fall some7 million pounds to an0ther record low .
B inder : C igar binder acreage in th e C onnect icut Valley is estima ted abou t 6 percentlarger than last year . T his -year’ s acreage allo tment was increased 50 percent. As of September 1
,production was indica ted a t 3 million
pounds,slightly above last year . But carryovers
of bOth Broadleaf and Havana S eed are probab ly .
at new lows . For bo th t yp es , supplies will belowest on record
,to taling some 3 million pounds
below
Acreage of Southern Wisconsin binder ises t ima ted about the same as las t year while
SEP TEMBER 19 69
Northern Wisconsin binder is down. As ofSeptember 1
, Wisconsin production is indica tedat 1 3 million pounds
,of f 8 percent from last
year and th e lowest S ince 1 934 . Most of thedecline is in type 55. C arryover is es tima tedabout 7 million pounds below a year ago. So
supply of both types may be down some 8million in t0ta1 from
TOBACCO USED F OR C IG AR ETTES
C igarette manufacturers used an es tima tedmill i on pounds o f tobacco (unstemmed
processing weigh t ) in cigaret tes in 196 8 . T hiswas 1 percent more than the year before. Im
ported tobacco us e -a bOth leaf and scrap- ! gainedwhile domestic tobacco us e declined fracti onally(table Use of bOth domestic and impo rtedtobacco in 196 9 will probab ly be under th e 1 96 8level due to lower cigare t te output.
F lue-cured tobacco account s f or abouthalf th e tobacco used in cigarettes, wi th burley,Maryland
,and impor ted tobaccos accounti ng f or
the rest. S ince the early 1950’ s the proportionsof bur ley and imported tobacco have increasedwhile flue- cured and Maryland have declined.
Manufac turers used an es timatedpounds of tobacco (uns temmed weight) per
cigarettes produced i n 196 8,fractionally
more than a year earlier. However, sinceth e mid-1950s the quant ity has declined alm os ts teadily (table C hanges in dimension andcomposi t ion of cigare t tes account f or the downtrend.
Wrapper : Indica ted acreage of C onnecticutValley wrapper this year is 25 percen t below196 8 . T h e labor force has declined and producti on cos t s are up . As of S eptember 1
,producti on
was indicated at 9 million pounds - l millionbelow las t year’ s level. C arryover on J uly1 at 12 million pounds was the lowest since1957 . T h e supply of Conne c t i c ut Val ley wrapper,at 2 1 million pounds is about 2 million below
and the smalles t S ince 1956 .
Acreage of Georgia-F lorida wrapper ises tima ted to be down 2 percent to a i 4-year low .
As of S eptember 1,production was an indicated
million pounds,about 3 percen t below las t
year. C arryover on J uly 1,at million
pounds,was down lm i ll i on from a y ear earlier.
T h e supply,at 17 million pounds
,is about 1
million below and about the average ofthe past 5 years .
Major factors are: ( l ) the shift to filtert ips ; (2 ) length ened cigarette fi lters; (3 ) lncreased use of sheet tobacco ;
' and (4 ) reduct ionin cigarette circumferences. Mos t f i l ter brands ,unt il the introducti on of 100millimeter length s;had a shorter tobacco column than mos t non
filter brands . S limmer cigare t tes and longfilters are o ther marke ti ng developments. Useof processed s tem s (midribs of leaves ) andrecons t ituted tobacco shee t made from s temsand small fragment s of leaf are technologicaldevelopments that ex tend th e filling quanti tyof a given amount of leaf.
II‘ab l e 20.
—Ee t i m t ed’
l eaf used f or c i gare t t e s by ki nd s o f t obac co f or s p e c i fi ed pe ri od .
Farm- sal e s we i gh t Un t am ed - p roc e s s i ng we i gh t
P erc ent age Di s t ri but i on
- 37
M EIR 1 96 9
SEP TEMBER 1 969TS- l 2 9
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TS- l 2 9 SEP TEMBER 1 969
Tabl e 2 3 .—Cas h re ce i p t s from t abac co as p e rce nt age of cas h re ce i p t s from c rop s
and al l farm commod i t i e s , by St at e s , 1 967 and 1 968
St at eTobac co as
d ol l ar s P erc ent P e rc ent d ol l ars P ercent P er cent
Nort h Carol i na
We s t Vi rg i ni a
Uni t e d St at e s g/
De t ai l may not ad d t o t ot al due t o round i ng .
Tabl e 2 h .—Tot al exp end i t ure s f or t obac co p roduc t s , 1 950
—68
Year Total Ci gare t t e s C i gar s Ot he r _1/ Year Tot al Ci gare t t e s Ci gar s Ot h er yMi l l i on dol l ar s Mi l l i on d ol l ars
Tabl e 2 S .—Fede ral , St at e , and l ocal t ax revenue s from t obac co p rodu c t s f or s p e c i fi ed pe r i od s
Mi l l i on dol l ar s - e
Comp i l ed from re port s o f t h e I nt ernal R e ve nue Se rvi c e and t h e Bureau of Cens us .
- 40
92 3
1 ,2 8h
1 ,5u1
Ts r l 2 9
STATlSI ICAL SUMMAR Y
Average pri c e at auc t i ons
F l ue-cured
Barl ey
pe r l b
pe r
per l b .
per l b .
per l b s
per l b .
pe r i h .
Ky .- 'renn . fi re - cured
Kan-Tenn . dark ai r-cured
Vi rgi n i a s un- cured
support pr i c e yF l ue-cure d
Bur l eyMary l andVi rg i ni a t i re -cured
Ky . t i re - cured
Km- Tenn . dark a i r- cured
Vi rg i n i a s un- cured
Conne c t i cut Val l e yc i gar b i nd er
wi s . b i nd e r and Oh i o fi l l erP uert o R i can t i l l er
0.
0.
0.
0.
b.
0.
P ar i t y i nd ex g/ 1 910—1 he 100
1 957
Bi l . dol
I nd us t r i al p roduc t i on i nd ex 3/
P er s onal i ncome y
Taxabl e removal sC i gare t t e s
C i gars and c i gari l l os
Ac cm l at ed f rom J an . 1
C i gare t t e s
Ci gars and c i gar i l l os
Invoi c ed t o dome s t i c cus t omersAc cumul at ed t ron Jan . 1
$ 0ki ng t obac coCh ewi ng t obac c oSnuff
Ci gare t t e s
Ci gars and c i gari l l os
Ac cuml at ed t ron Jan . 1
Ci gare t t e s
Ci gars and c i gar i l l os
I nvo i ced f or exp ort
Ac cm ul ated fra t Jan . 1
Sucki ng t obac coChewi ng t obac co
whol e sal e p ri ce i ndexes 2/Ci garet t e s (reg . nonf i l t er )Ci gars
Smoki ng t obac coP l ug chewi ng t obac coSnuf f
Cons 'mer pr i ce i ndu c e (urban)Ci gare t t e s (reg . nonf i l t er )Ci gare t t e s (fi l t er t i p
Ci gar s (donost i c reg . s i z e
3 1 957Mar .
1 957
I l port s of t obac coC i gare t t e l eaf
Ci gar t obac co 1/Acct-uls t ed f rom Jan . 1
Q
Q
Q
Q
Q
Q
Cl os ed- l - o - s - e —a z C - 1 - o
- l - o - s —e- d :
- l - o - s - e - d : C — l - o
- l - o - s - e - a z C - l - o
- l - o ~ s - e - d : C - l - o
- l - o - s - e —d : c - l - o
u3 .u M4 was
- 43
S
e
0
0
0
C - l - o - B - e - d
(1
8m l%9
SEP TEMBER
smnsn canSUMMAR Y—CONTINUED
Exp ort s of l eaf t obac co(farm- sal e s we i gh t )F l ue- cured
Burl eyMary l andVi rg i ni a fi re sun- cured
Ky .- Tenn . fi re- cure d
Ky .-Tenn . dark ai r- cured
Bl ack FatCi gar wrap p e r
Connec t i cut b i nd erWi s cons i n b i nd er
Ac cumul at ed from beg i nn i ngof market i ngF l ue- cured
Burl ey
Vi rg i n i a fi re sun—cur edKy .
- Tenn . fi re- curedKy .
- Tenn . dark a i r- cure d
Bl acx Fat
C i gar wrap p er
Conne ct i cut b i nd erWi s c ons i n b i nd erC i gar fi l l er
Exp ort s of manufact ure d t obaccoi n bul kAc cumul at ed from Jan . 1
St ocks of t obac co - l s t of
quart er .2 /Dome s t i c t y p e s
(farm- s al e s we i gh t )F l ue- cure d
Burl ey
Mary l andF i re~ cured
Dark ai r and s un- cure d
Ci gar fi l l erCi gar b i nderC i gar wrap pe r
Und er G overnment l oan l g/ **l ,1 83
Fore i gn t y p e s (farm- sal e s we i gh t )Ci gare t t e and smoki ngCi gar
Tobac co out l e t s
Seas onal l y ad j us t ed dat a ,annual rat e s , f or chart s , p . 2
Ci gare t t e s
Produc t i on
Taxabl e removal sC i gar p roduc t i on
Smoki ng p roduc t i onCh ewi ng p roduc t i on
Scrap
Mi l . l b .
Snuff p roduct i on
Export s of l eaf81 2 765 100
Fl ue- cure d Mi l . l b . 7 886 655 z“
1 09l and l 9 crop s re sp e c t i ve l y . 2 Pri ce s pa i d by farmer s i nc l ud i ng i nt eres t , t axe s and wage rat e s . as
dus t ed ..5/ Seas onal l y ad j us t ed , annual rat e . 2] Exc i s e t ax excl ud ed .
‘é/ Federal and ap p l i cabl e s t at e and l ocal t axes i h‘
cl ud ed .'1/ Farm- s al e s we i gh t equi val ent . Jul y 1 f or fl ue - cured and c i gar wrap p er and Oc t ober 1 f or ot h er s . 32/ Hol d i ngs
o f manuf ac t urers and deal er s i ncl ud i ng grower coop e rat i ve s ..i g/ R ep ort e d by grower coop erat i ve s . l i / He i gh t of t obac co l eaf
not i ncl ud i ng s t ems add ed .‘l g/ Dat a f or mo s t re cent quart e r are p re l i mi nary e s t i mat e s .
*Le s s t han pound s .
quant i t y , ap p roxi mat e l y'
l os mi l l i on p ound s had . been s ol d . De t ai l may not add t o t ot al due t o round i ng .
O 44
TS- 1 2 9
L I ST OF TABLES
T i t l eTab l e
1 C i garet t e s : Out put , removal s , and consumpt i on , 1 960—6 9
2 C i garet t e s and al l t obacco product s : Cons umpt i on p er cap i t a , 1 8 year s and
over ( i ncl ud i ng over s eas f orce s ) , and i ndexe s , 1 960- 69
3 C i garet t e expor t s f rom t h e Un i t ed St a t e s t o l ead i ng de s t i nat i ons , Jul y 1 96 8
J une l %9 , J anm rb lfl -y l%8/69
h C i gar s and smok i ng t obacco : Out put , removal s , and cons umpt i on , 1 96 2 - 6 9
5 Chew i ng t obacco ,s nuf f and smal l c i gar s : Out put by cat egory f or Spec i f i ed
p er i od s
6 Cons umpt i on of c i gar s , smok i ng t obacco and chewi ng t obacco p e r mal e , and
s nuf f p e r p e r s on , 1 8 y ear s and over , 1 92 5- 69
7 un i t ed St at e s expor t s o f unmanuf act ured t obacco by t yp e s and t o pr i nc i pali mp or t i ng c ount r i e s f or S pe c i f i ed per i od-S 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
8 Tobacco expor t s under G overnment programs , and exp or t s f or dol l ar s , f i s caly ear s , 1 955
- 69 e o 0 0 0 0 0 e o e e o e e o o e e 0 0 0 0 0 o o o o s e e 0 0 0 0 0 0 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 0 0 0 0 0 0
9 U . S . i mpor t s o f unmanuf act ured t obacco , f rom pr i nc i pal cat egor i e s and
count r i e s of or i g i n , 1 969 f i s cal year ,and J anuary
e J ul y
10 U . S . i mpor t s o f unmanuf act ured t obacco : Quant i t y and val ue , by k i nd s ,l %8 69
l l U . S . t obacco al l ot ment s , by ki nds o f t obacco , 1 969
1 2 Uni t ed K i ngdom t obacco : I mpor t s , s t ocks , cl earance s , and expor t s,1 966 - 69
1 3 F l ue- cur ed t obacco auct i on market s : G ro s s s al e s,average pr i ce , s al e s
dat e s , t hr ough Sept ember 1 9 , 1 969 , comparab l e 1 968 per i od
l n F l ue- cur ed t obacco , t y pe s 1 1 - 1 h : Domest i c suppl i e s , d i s appearance s , s eas onaverage pr i ce , and pr i ce s uppor t operat i ons f or s pec i f i ed p er i od s
1 5 Bur l ey t obacco , t y pe 31 : Domest i c s up pl i e s , d i sappearances , s eas on averagepr i ce , and pr i ce s uppor t operat i ons f or s pec i f i ed pe r i od s
1 6 Mary l and t obacco , t ype 32 : Dome s t i c s uppl i e s , d i s appearances , sea s on average , p r i c e , and pr i ce s uppor t operat i ons f or s pec i f i ed per i od s
1 7 F i re—cured t obacco , Kent ucky-Tenne s s ee t ype s 2 2 - 2 3 , and Vi rg i n i a f i re- curedt y p e 2 1 : Acreage , yi el d , product i on , carryover , s uppl y , d i s appearance ,s eas on average p r i ce , and pr i ce s uppor t operat i ons , 1 965
- 6 9
1 8 Dark a i r- cur ed t obacco , t ype s 35—36 , and s un- cured t obacco , t y pe 37 : Acreage , yi el d , product i on , carry over , s uppl y , d i s appearance , s eas on averagepr i ce , and p r i c e suppor t Operat i ons ’
l %5- 69 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
SEP TEMBER 1 969
20
TS- 1 2 9 SEPTEMBER 1
L I ST OF TABLES —Cont i nued
T i t l e
Tab l e
1 9 C i gar t obacco , t ypes hl r 6 2 : Acreage , y i el d , product i on , carry over ,s uppl y ,
d i sappearance , and s ea s on average pr i ces , 1 965- 6 9
2 0 Es t i mat ed l eaf used f or c i garet t e s by ki nd s of t obacco f or s pec i f i edp er i od s
2 1 Es t i mat ed l eaf us ed p er c i garet t e s by ki nds of t obacco f or s pec i f i edper i od s
2 2 Tobacco : Acreage and yi el d p er acre i n t h e U.S . by t ype s , f or s pec i f i edp er i od s
2 3 Cas h rece i pt s f rom t obacco and as percent age of cash rece i pt s f rom crop sand al l f arm commod i t i e s , by St at e s , 1 967 and 1 968
2 h Tot al exp end i t ure s f or t obacco product s , 1 950- 68
25 Federal , S t at e and l ocal t ax revenue s f rom t obacco product s , f or s pec i f i edp er i od s
St at i -S t i cal swnm ry
Th e Tobacco S i t uat i on i s publ i shed March ,June , Sept ember and December .
Th e next i ss ue i s schedul ed t o b e ava i labl e IDe c ember 30, 1 969 .
U .S . D ep artment of Agri culture
Was h i n gton , D . C . 202 50
OF F IC IAL BUSINESS3 FEE
Un i ted State s Dep omnsw
CPS- 1 2 9 Tobac co S i t uat i on
at]. S. G OVER NMENT P R INT ING OF F ICE : 1 9 6 9 3914
