Lighting up: Though the number of smokers is falling, electric cigarette popularity will draw new revenue channels

The 2005 deregulation of the Tobacco Growing industry continues to linger over tobacco farmers. The removal of federal production quotas and price supports initiated an exodus; about one-third of tobacco farmers left the industry. Without government support, small and otherwise unprofitable farmers switched crops or were bought out by larger growers, decreasing the number of industry operators. 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...read more.

Industry Statistics & Market Size
Revenue
$1bn
Annual Growth 12-17
-3.2%
Forecast Growth 17-22
Profit
Employment
7,519
Businesses
4,368
Market Share of Companies
There are no companies with a dominant market share in this industry
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Industry Threats & Opportunities

  • Without government support, small and otherwise unprofitable farmers switched crops or were bought out
  • US tobacco is perceived as high quality, allowing US products to command a price premium
  • Emerging economies are quickly becoming major markets for tobacco growers
  • 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 helped farmers finance many of these purchases until 2014. IBISWorld estimates that for every dollar spent on labor, $0.60 is spent on capital equipment. This capital-to-labor ratio has increased over the past five years as farmers use more machinery and tobacco farming becomes more automated...purchase to read more.

    Additional Insights for the Tobacco Growing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Tobacco Growing Industry are

  • Output is sold under contract - incorporate long-term sales contracts
  • Superior financial management and debt management
  • Use of specialist equipment or facilities
  • IBISWorld analysts also discuss how external factors such as Trade-weighted index and Percentage of smokers in the Tobacco Growing industry impact industry performance..

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    What is the Tobacco Growing Industry?

    Farms in this industry grow tobacco leaf. Tobacco farmers purchase inputs, such as fertilizers, agricultural chemicals, pesticides, plant seeds, plant bulbs and curing fuel, from farm supply and other wholesaling industries. The tobacco leaf is exported or sold to domestic tobacco product manufacturers.

    Industry Products
  • Air-cured dark
  • Air-cured light
  • Cigar
  • Fire-cured
  • Flue-cured
  • Other tobacco products
  • Industry Activities
  • Flue-cured leaf tobacco growing
  • Fire-cured leaf tobacco growing
  • Cigar leaf growing
  • Air-cured light leaf tobacco growing
  • Air-cured dark leaf tobacco growing
  • Other tobacco products growing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Trade-weighted index
  • Percentage of smokers
  • World price of tobacco
  • Consumer spending
  • Demand from cigarette and tobacco manufacturing

  • Current Performance
  • Deregulation slashes support
  • Putting out the flame
  • Growing health concerns
  • Chart: Revenue Growth

  • Industry Outlook
  • Deregulation slashes support
  • New Uses
  • Table: Tobacco Growing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Tobacco Growing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Cigarette & Tobacco Manufacturing
  • Cotton, Sugar & Tobacco Wholesaling

  • Key Selling Industries
  • Cotton, Sugar & Tobacco Wholesaling
  • Farm Supplies Wholesaling
  • Farm, Lawn & Garden Equipment Wholesaling
  • Fuel Dealers
  • Gasoline & Petroleum Wholesaling
  • Tire Wholesaling

  • Products & Services
  • Flue-cured
  • Air-cured light
  • Fire-cured
  • Cigar
  • Air-cured dark
  • Other tobacco products
  • Chart: Tobacco Growing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Other exports
  • Cigarette manufacturers
  • Exports to Switzerland
  • Exports to China
  • Other tobacco product manufacturers
  • Chart: Major Market Segmentation for the Tobacco Growing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWages and depreciationRent, utilities and other costs
  • Chart: Cost Structure Benchmarking – Sector vs Tobacco Growing

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Tobacco Growing Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Tobacco Growing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Tobacco Growing Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)
  • World price of tobacco (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Burley Tobacco
  • A light air-cured tobacco used primarily for cigarette production.
  • Commodity Credit Corporation (Ccc)
  • A government entity that helps support and protect the farm industry by providing loans to farmers and their cooperatives.
  • Dark Air-Cured Tobacco
  • A type of tobacco grown for use as chewing tobacco.
  • Flue-Cured Tobacco
  • A type of cigarette tobacco derived from tobacco leaves that have been dried through a flue (a narrow passageway) that transmits heat to the plant without exposing it to any smoke.
  • Tobacco Transition Payment Program
  • Also known as the "Tobacco Buyout", the TTTP replaced the federal marketing quota and price support loan program for tobacco farmers with a set of annual payments from 2005 to 2014
  • Topping And Suckering
  • Topping is the removal of tobacco flowers and suckering is the process of pruning out leaves that would otherwise be unproductive.
  • Why buy this report?

    IBISWorld’s Tobacco Growing Industry Research Report offers insight into the market at the national level. Our analysis highlights macro trends in the overall sector and the micro trends faced by companies that do business in the Tobacco Growing industry. Our five-year outlook forecasts explain how the market is set to change and the product segments that will drive growth.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Tobacco Growing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Tobacco Growing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Tobacco Growing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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