Industry Analysis & Industry Trends
Though government regulations are increasingly discouraging smoking, the industry is heading into a growth phase, with exports on the rise. Higher cigarette consumption rates and fewer tobacco product regulations in major export markets such as China will drive demand. Furthermore, US prices of tobacco leaf will remain competitive, supporting growth in the industry. Farmers will look to new opportunities for demand, such as using tobacco for ethanol and biodiesel... purchase to read more
Industry Report - Industry Investment Chapter
Along with the rest of the farming sector, tobacco growers have increasingly invested in machinery. Many smaller farmers have exited the Tobacco Growing industry since its deregulation in 2005. Existing large operators have purchased harvesters and automatic transplanters to cut labor costs and produce at lower per-unit costs. Currently, IBISWorld estimates that for every dollar spent on labor, $0.44 is spent on capital equipment. This capital-to-labor ratio has decreased over the past five years because, while tobacco farmers use machinery heavily, they have been using and maintaining current machines rather than investing in new equipment.
Capital intensity does not capture the unpaid labor on tobacco farms... purchase to read more