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Long-term Contracts Key to Expanding or Upgrading Tobacco Infrastructure

Tobacco farmers face a conundrum every year with their curing barns; repair or replace. Grant Ellington, Extension Assistant Professor, Biological and Agricultural Engineering Department with NC State offers some things to consider when faced with that decision:

“The barns reach an age when they are beyond repair. A lot of the growers are interested in investing in new equipment. It’s a cost but its important because the production cost involved in curing is second only to labor. They have to have the barns, and if they want to increase production they need more barns. Most are just interested in upgrading their existing infrastructure.”

And when replacing or upgrading aging barns, Ellington says fuel choice comes into play:

“Natural gas is the fuel of choice right now, its 30-40% cheaper. The problem is only about 20% of our growers have access to it. That is a problem. There is a lot of expansion in natural gas, but I’m not sure it would ever get to all of our growers.”

Depending on the area of the state, electricity can be considered as a fuel source for curing barns says Ellington:

“Electrical rates vary a lot across the state. It can range from 8 cents to 14 cents per KW hour.”

In 2011 and 2012 many growers found their crop coming off faster than barn space would allow, and Ellington says a few tricks of the trade can help manage that situation:

“Most probably need a few additional barns to really give them a bigger margin of error over the weather. Other things are planning accordingly for planting, managing fertilizer rates and varieties.”

To make investment in tobacco infrastructure possible, longer contracts could be the key says Ellington:

“It will be up to the individual grower. Some of the issues have to do with the long term security. Most are signing contracts every year so that makes it more difficult to make long term investments in equipment. Some companies are starting to offer 3 or 5 year contracts.”

NC State Extension’s Grant Ellington'

A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.