5 On Your Side

N.C. Tobacco Farmers Profit in Overseas Market

Posted July 17, 2007 7:00 p.m. EDT

— North Carolina's tobacco farmers are growing more of the plant - despite higher state cigarette taxes, lower statewide cigarette sales and the end of price supports in 2004.

That growth is largely due to farmers' ability to tap into the overseas tobacco market, according to the N.C. Department of Agriculture.

"We're exporting quite a bit of tobacco overseas. ... The overseas market is lucrative, and we think that it holds a lot of promise for the future of tobacco farming in North Carolina," said Brian Long, an agriculture department spokesperson.

Along with being the country's top producer of tobacco, North Carolina is the leading exporter of tobacco among U.S. states, shipping out $292 million worth of the leaf in 2005, the most recent year for which the state agriculture department has statistics.

North Carolina accounts for 38 percent of U.S. tobacco exports and 70 percent of the crop grown domestically.

Jimmy McKenzie grows tobacco on a farm near Smithfield in Johnston County, which has seen a 25 percent increase in tobacco production since the 2004 tobacco buyout. McKenzie said that he and his son farm 150 acres, nearly double what they worked before the buyout.

He said that while he isn't sure exactly how much of his tobacco is exported overseas, "we just got it in our system, and that's what we want to do, and hopefully, we can continue to make a living at it."

McKenzie attributed part of his farm's growth to the gap left by many farmers who quit growing tobacco after the buyout.

"Supply and demand, you know. They want us to raise more, but like I said, we're about at our limit for right now," said McKenzie.

Fewer competitors and the abolition of quotas has allowed families, including the McKenzies, to extend their production as much as they want.

"Money. Just more income. My son is married now and got two children, built a house," said McKenzie.

The experience of farmers such as the McKenzies thriving after the tobacco buyout has been seen statewide, said state agriculture officials.

"We're actually this year growing more than we grew in the last couple years in the quota system," said Long.

However, the state agriculture department said that it is too early to tell what impact the increased cigarette tax will have on tobacco growers in the years to come.

Earlier this week, state officials announced cigarette sales decreased more than 18 percent statewide, just one year after North Carolina increased its cigarette tax.