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 - Starting a New Business Chapter
The removal of government regulation of the Tobacco Growing industry lowered the barriers to entry. Farmers are no longer required to secure production quotas and tobacco-growing locations are not predetermined. Nevertheless, potential entrants into this industry face significant obstacles.
US tobacco farmers must secure supply contracts with downstream cigarette manufacturers in order to ensure their product is sold, making it difficult for potential entrants with no reputation to establish themselves within the industry.
Additionally, the negative publicity and health concerns surrounding cigarette smoking poses a two-fold barrier to entering operators. First, it has limited federal funding to farmers, allowing no direct payments or price support for tobacco crops... purchase to read more