Tobacco industry is making a comeback

Lindsay Pasley is an eager young man in what used to be an older man's game — tobacco farming.

He recently took 20 tons of his leaf to Clay's Tobacco Warehouse in Mount Sterling, where he said he earned enough to "have a nice Thanksgiving and Christmas." Clay's is the last tobacco warehouse conducting auctions in Mount Sterling, once home to four auction warehouses. Owner Roger Wilson, who has watched as growers have switched crops or quit farming altogether, hopes to sell More than 2 million pounds this season, comparable to last year but down about half from the days before Congress pulled the plug on a Depression-era buyout program. Yet Pasley, 28, wants to quadruple his acreage. He has a contract to sell 10 times as much to R.J. Reynolds Tobacco Co. as he did at the auction. A decade ago, tobacco seemed destined to wither as cigarette companies shelled out tens of billions to settle lawsuits with states. Smoking bans swept the country and — worst of all for the small-time grower — Congress cut off the quota system four years ago. But Big Tobacco and individual growers have proved as resilient as their leaf, aided by a boost in exports primarily to Germany and Switzerland and by new marketing tactics. According to the U.S. Department of Agriculture, production of all tobacco varieties fell 27 percent to 640 million pounds in 2005, the first year without the price-support program, which entitled license-holders to a quota of the total tobacco crop capped by the USDA each year. The program was reeling from steep declines in tobacco demand due to anti-smoking efforts. This year, production climbed to 805 million pounds — within 10 percent of the 2004 level of 882 million pounds. That 2004 output was half the production in 1997 and a third of 30 years earlier. The bottom came in 2005, when growers produced 645 million pounds. The uptick has coincided with increasing consolidation of growing onto fewer farms. "We've had so many to drop out, that for the ones who stay in there are opportunities," said Will Snell, an agricultural economist.

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