Industry Analysis & Industry Trends
The 2005 deregulation of the Tobacco Growing industry continues to linger over tobacco farmers. The end of price supports has led to an exodus of farmers; however, deregulation has also boosted industry exports as domestic demand for tobacco has declined, helping the industry maintain moderate growth. Nevertheless, the industry has experienced volatility over the past five years stemming from fluctuating weather conditions. Over the coming five years, industry farms will continue to replace falling domestic demand with exports to emerging markets where tobacco consumption is actually on the rise. Additionally, potential alternate uses for tobacco leaves could provide additional revenue streams... 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. The federally funded Tobacco Transition Payment Program has helped farmers finance many of these purchases over the past 10 years. IBISWorld estimates that for every dollar spent on labor, $1.55 is spent on capital equipment. This capital-to-labor ratio has increased over the past five years as farmers utilize more machinery and tobacco farming becomes more automated.
Capital intensity does not capture the unpaid labor on tobacco farms... purchase to read more