Profit draught fuels tobacco equipment auction

Farmers are seeing a decline in the demand for cigarettes 'It is hard times'

May 28, 1999|By CHRIS BURRITT | CHRIS BURRITT,COX NEWS SERVICE

BROWN SUMMIT, N.C. -- Roy Cook cranked up the John Deere high-cycle tobacco sprayer, listening closely for any skips in the loud rumbling engine.

The 42-year-old farmer hopes to fetch top dollar for the green-and-yellow rig in the recent farm equipment auction, a first-time event for the Guilford County Farmers Club and a signal of the uncertainty facing tobacco growers.

"I'm just trying to turn it into a little cash," said Cook, the third generation of his family to farm the reddish-brown soil of piedmont North Carolina. "It is hard times."

Across the South's tobacco belt, farmers are suddenly tightening their belts amid declining cigarette consumption, which has crimped demand for the crop. Generation after generation, the golden leaf sustained rural communities from south Georgia through the Carolinas and Virginia. But now farmers, facing sharp cutbacks in the amount of flue-cured leaf the government allows them to grow, are worried about their survival.

"Tobacco has been a sheet of plyboard over a mudhole. You always had a place to put your foot," said E.B. Harris, owner of Warrenton, N.C.-based Goins & Harris, one of the largest auctioneers of tobacco farming equipment. "Now ... if you step the wrong way, you get your foot muddy."

By rough estimates, the number of U.S. flue-cured growers has shrunk from 40,000 in 1975 to 25,000 today. The recent government cutbacks portend further casualties and a hastening liquidation of equipment.

"After this fall's crop, I think there will be an upswing in auctions," said Rick Murray, the auctioneer for today's sale in Brown Summit, just north of Greensboro. Local farmers who grow tobacco, grain and other crops have put up for sale more than 230 pieces of equipment, valued at roughly $2 million.

Even before tobacco is planted in coming weeks, pessimistic farmers are fretting that in December the U.S. Agriculture Department may cut the flue-cured tobacco allotment by another 10 percent for the 2000 crop. That would be on top of a 35 percent reduction for this year's upcoming crop and last year's.

Generally speaking, a 35 percent reduction in allotment equates to that much in lost profits to farmers. That's a hit few growers can sustain without slashing costs.

Some are burdened by debt on equipment and supplies; others are looking to free up cash to get this spring's crop in the ground. A few are simply getting out of farming, and turning to auctions to liquidate their machinery.

For years, auctions have been popular among farmers looking to replace outdated equipment with more automated, efficient models. But until recently, few tobacco growers have felt compelled by financial pressures to sell machinery.

In fact, many farmers are like barnyard pack rats, accumulating tractors and harrows and sprayers they haven't used for years. But their fathers used them and, in some cases, their grandfathers did, attaching worth beyond the monetary value of rusting metal and wood as worn and weatherbeaten as old bones.

"This thing runs deep, deeper than any roots that you've ever seen," said Harris, 49, an auctioneer for 22 years.

It is painful for many farmers to sell, aside from the emotional hurt. The more equipment that winds up in auctions, the less it brings in price. Even worse, most tobacco equipment such as plant setters, harvesters and pre-fabricated curing barns is specialized for that crop alone, diminishing the number of potential buyers.

"The sad thing is, are there going to be any buyers?" said Jerry Keck, 48, a fourth-generation farmer hoping to sell a tractor and other equipment at the auction.

Randy Holtzmann has decided to take a chance that there will be enough buyers. A week from today, the fourth-generation tobacco grower plans to auction all his equipment, including three tractors that have belonged to his family "for as long as I can remember."

At 34, he is quitting tobacco farming on his Norlina, N.C., farm, 125 miles northeast of Brown Summit near the Virginia state line. Holtzmann is not sure how he will earn a living. He has three daughters, ages 5, 7 and 9. His wife, Laura, decorates cakes at a local grocery.

"I'm probably going to miss the planting of the crop," he said. "But I'm not going to miss the headache of worrying about whether it is going to rain, whether I'm going to have decent labor, whether or not it is going to be enough to pay the bills.

Pub Date: 05/28/99

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