Trying times for tobacco Buyers may leave as Md. crop shrinks

April 17, 1991|By Ted Shelsby | Ted Shelsby,Sun Staff Correspondent

WAYSON'S CORNER -- Claude McKee scanned the crowd of 200 or more that gathered at the sprawling Triangle Tobacco Warehouse for the opening session of the annual Southern Maryland tobacco auction and said that he had never seen so many people at previous sales.

"I guess they are all wondering what's going to happen," he said earlier this month, just minutes before the first few baskets were sold and farmers got their first indication of how much they were going to be paid for their crop.

In a sea of plaid flannel shirts, blue overalls and colorful baseball caps between the long rows of baskets holding the brownish-gold leaf, Mr. KcKee could see farmers he recognized from throughout the region, a sprinkling of state officials and buyers representing tobacco companies from as far away as Switzerland, Germany and Italy.

But it was the one person missing that had Mr. KcKee -- the head of the University of Maryland's tobacco experimental farm and the man often referred to as "Mr. Tobacco" because of his extensive knowledge of the crop -- and some state officials and tobacco industry people concerned.

There was no one at the auction from the American Tobacco Co. -- maker of Lucky Strike, Pall Mall, Carlton and Tareyton brand cigarettes and a fixture at the market for as long as anyone can remember.

The absence of a buyer that normally trucks off about 7 percent of the farmers' crop each year was seen as an ominous sign for an industry that dates back to the landing of the first settlers in Maryland.

There has been a growing concern by state officials in recent years that Maryland's tobacco harvest may eventually become too small to attract the buyers who compete for the leaf at auction each spring.

The high-side estimate of the crop grown last year and currently being sold at auction is 10 million pounds. This is only about a fourth the size of the crop auctioned in 1982 that fetched farmers $58 million.

Tobacco planting has been on a steady decline since 1982, when farmers harvested 27,000 acres. This year the state estimates that they will plant only 6,900 acres, down from 7,100 acres last year.

James Starkey, senior vice president of Universal Leaf Tobacco Co. in Richmond, Va., is another of those concerned about the size of the state's crop. Universal normally buys between 30 percent and 40 percent of the harvest each year, and Mr. Starkey said the industry would like to see the crop get back to the 16 million- to 18 million-pound range.

Mr. Starkey, who grew up on a tobacco farm not far from here, fears that other customers may follow American's lead and bypass the auction here in future years.

State Agriculture Secretary Wayne A. Cawley Jr. is concerned that a dearth of buyers would lessen competition and push down the price.

He warned that tobacco companies could turn to South America for leaf. The type of leaf grown here -- technically called Maryland Type-32 -- is used in a blend with other tobaccos to gives cigarettes an even burn.

Roger Baker, a spokesman for American Brands Inc., the parent of American Tobacco, said that the company has limited resources in its leaf-buying organization and skipped the Maryland sale this year because the crop was so small. He was noncommittal on whether the company would be back next year.

American was a no-show despite an appeal from Mr. Cawley, who reminded the company in a letter that state farmers had served its needs for many years and that this was a poor time for it to pull out.

The state's top agriculture salesman also fears that if the crop continues to shrink he'll see more of the warehouses where the leaf is sold going out of business. Two of the facilities, which operate on a commission of total sales, have closed in recent years, reducing the total to six.

Mr. Cawley says the state already has a "fallback position" to deal with this possibility. It involves setting up a market at the state-operated farmer's market at Cheltonham, a small town about 7 miles south of here. "I'm not advocating this," he interjected between puffs on his Vantage 100, "but if things get worse it may come to this."

Despite the absence of American Tobacco Co., the price growers are being offered for their crop has jumped about 10 cents a pound, to $1.90, for top-quality leaf. A few baskets have sold for a record $1.91, according to Robert Denning, head of the Maryland Tobacco Authority.

Because the quality of leaf being sold this year is better than normal, the average price has been higher. But it has been declining since the market's opening on April 3. The state Department of Agriculture reported yesterday that the average price of leaf sold on Monday was $185.66 per hundred weight, down from $189 when the market opened.

Mr. KcKee of the University of Maryland believes that the price tobacco companies are willing to pay is the key to tobacco's survival in the state.

Joseph Adams, a 72-year-old farmer from Lower Marlboro who says he's been growing tobacco for more years than he can remember, agrees. He was delighted with the $1.90 a pound he received for the leaf he brought to the opening market and said he would be planting again this year.

Despite growing pressures from anti-smoking forces, Mr. McKee said that he expects tobacco to remain an important crop in Maryland "for the rest of my life."

He will be 61 in June. But things may change. Another generation, he said, might not take their leaf to auction but grow it under contract to a tobacco company the way many Eastern Shore farmers grow chickens for the poultry industry.

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