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Tobacco Economist Cautiously Optimistic for 2016

 

At the 2015 Tobacco Day last week, NC State Extension Economist Dr. Blake Brown was pretty much the man of the hour, as he often times is, especially after a difficult year.  Brown is cautiously optimistic for 2016:

Dr. Blake Brown, NC State Extension Economist.

“It’s been an interesting season, not a great season for our growers.  Hopefully the situation will improve a little bit next year, basically because of crop problems in other parts of the world, basically the crop excess will be worked off.

The biggest obstacle we have in the coming year is the very, very strong dollar and very weak Brazilin currency.  It just means that competitors products are much, much cheaper on the world market than ours, and it makes for a difficult situation when we depend so heavily on exports.”

“Now, on one of the charts you were showing today, you were showing some export numbers that have actually flat-lined, if not even declined.”

“That’s correct.  The bright spot in the US tobacco situation in the last few years has been the increase in exports to China.  And that has helped offset the European Union.  With a slowdown growth in cigarette consumption, and slowdown in the Chinese economy, and large inventories in the world market, we saw Chinese exports actually decline a little bit in the last year. Hopefully that is a temporary thing, and that will turn around and you’ll continue to see those exports increase, perhaps not in 2016, but in the years beyond.”

“As far as 2016 is concerned, give me couple of points as to the high’s and low’s.’

“As far as 2016 is concerned, I think what we’re afraid of with high inventories going into this crop year and a very difficult exchange rate situation, that we could see another decline in contracted pounds.  Hopefully that will not be the case, it would be a really nice surprise to see an increase, I don’t know that will be the case, either.  But, hopefully we will not see another decrease in contracted pounds.”


rgarrison@curtismedia.com'

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.