& Policy Update Graphic owner: UKZN SAEES: school website
June 23, 2017 Volume 17, Issue 6 Edited by Will Snell & Phyllis Mattox
FEATURED ARTICLES KFBM Tobacco Summary - Laura Powers Summary of Pennyroyal Grain Farms for 2016 - Rush Midkiff MarketReady Producer Training Update - Alex Butler - Tim Woods
2016 Kentucky Farm Business Management Tobacco Summary There were 258 farms represented in the final analysis of the Kentucky Farm Business Management (KFBM) Program for 2016. Included in those farms are 55 farms with burley tobacco, 43 farms with dark air cured tobacco, and 37 farms with dark fired cured tobacco. Average production from all types of tobacco was the lowest over the last five years. Of the five regions reporting burley tobacco production, the Pennyroyal region reported the most farms (and acres) of production for all types of tobacco, but the Bluegrass region recorded the highest average yields of burley tobacco. The weather in 2016 played havoc on tobacco in the western part of the state. A very wet spring and early summer resulted in yields two-thirds of what western Kentucky farmers would produce in an “average� year. For some farms, the only tobacco-related revenue earned was from crop insurance as their total crop was destroyed. Central Kentucky farms fared much better, with some areas reported yields higher in 2016 than they were in 2015. Average tobacco yields for KFBM farms in 2016 were as follows: 1,493 pounds/acre of burley (down from 2,076 pounds in 2015); 1,582 pounds/acre of dark air cured (down from 2,546 pounds in 2015); and 1,961 pounds/acre of dark fire cured (down from 2,802 pounds in 2015). Prices for the 2016 crop for burley ($1.98 per pound) and dark air-cured ($2.38 per pound) tobacco were relatively stable with those in 2015. At $2.68 per pound, the average dark fire cured crop price was $0.09 higher than last year, due to reduced supplies and a modest increase in contract prices. Tobacco profitability remains a concern to producers. The chart below displays the Kentucky average crop value, by tobacco type from 2012 through 2016. Crop value is defined as gross sales of the crop in the current year (old or new crop) plus the change in inventory value. Gross value for the crop had been relatively stable over the last few years, although it took a hit for many western Kentucky producers in 2016, which brought the average for the entire state down. However, crop expenses, especially labor costs, continue to increase. For many tobacco farms, hired labor can be as much as 50% of total operating expenses. While there have been some advancements in labor mechanization in tobacco production, there has not been widespread, financially feasible options recently to significantly reduce labor requirements. For more information of KFBM average tobacco data for 2016, please see the upcoming tobacco summary on the KFBM website: www.uky.edu/Ag/KFBM/
Tobacco Crop Value Per Acre U.S. Prices Received By Farmers 1990 - 2016 - USDA/ERS
$9,000 $8,000
$7,000 $6,000 $5,000
By the Numbers
$4,000 $3,000 $2,000 2012
2013 Burley
Source: KFBM farms
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2014 Air Cured
2015 Fire Cured
2016