With prices reaching record highs, the 1981 Southern Maryland tobacco auction season officially got underway this week at several warehouses in and around Upper Marlboro.
Top-grade tobacco from the 1980 crop was selling for as much as $1.80 a pound, the highest price ever recorded at a major tobacco auction. Even lower-quality green leaves were selling for between $1.60 and $1.70 a pound, while the general average pricr was estimated at beween $1.70 and $1.75 a pound, at the opening auction on Tuesday. Last season's opening-day average was $1.38 a pound.
Prices for the Maryland burley have been rising steadily in recent years, but never has the price jumped so dramatically. The average price for the 1979 crop at last year's auction wal $1.397 a pound, which was up 16.6 cents from the previous year.
Estimates are that 23 million pounds of Maryland type 32 tobacco will change hands before the auction ends on May 14. This is lower than average.
The U.S. Department of Agriculture has predicted that the total stocks of tobacco (the crop to be auctioned plus tobacco already owned by tobacco companies and sitting in Maryland warehouses) will drop to its lowest point in 10 years -- 55.2 million pounds.
"That tends to have buyers a little more active," said Tony Evans, chief of information for the Maryland Department of Agriculture.
Last year tobacco stocks stood at 63.4 million pounds, which is still below the normal level of 70 million pounds, or a 2 1/2-crop-year supply.
Auctions in the southern markets for flue-cured tobacco grown in Tennessee and Kentucky ended recently with an average price of $1.66 a pound.
"If the $1.80 price holds, our season average will be above theirs for the first time." Evans said.
Bernie doepkinis, manager of the Triangle Warehouse in Waysons Corner, said that the effects of last summer's drought were not as severe as had been feared. "The quality is not too bad, considering as much dry weather as we've had," he said. Dry growing conditions tend to increase the amount of tar and nicotine in the Maryland leaf, which is very low in tar and nicotine to begin with.
"Tobacco is a very strong growing weed and adapts to changes in the weather very well," said Evans, who said that, to everyone's surprise, there seems to be more tobacco than last year. "It's weighing out a lot heavier than they said it would."
There were two firsts at Tuesday's opening.
Because of a scheduling change involving the buyers, who follow the auction circuit, it was the earliest opening in memory. The auction usually starts between the 10th and the 15th of April.
It was also the first time that tobacco was sold untied. Usually the leaves are neatly tied into "hands" consisting of 12 leaves of tobacco wrapped by a 13th. According to Evans, the change was a labor-saving measure.
"Tobacco-growing in Maryland is very labor-intensive, with an average of 200 man-hours per acre," he said. "Trying to cut 10 or 15 percent out of that would be a big help to the grower."
Maryland tobacco is hand-worked or air-cured, rather than flue-cured, said Evans. "We handle tobacco in Maryland essentially the same way we did in the 1950s," he said. "Other parts of the country have gone much more to mechanization."
Maryland type 32 burley is highly prized not for its taste or aroma but because it burns evenly and cooly. Most domestic cigarettes contain about 2 percent Maryland tobacco. It is also very popular among foreign customers. According to Evans, from one-third to one-half of the crop will be exported overseas. A worldwide shortage of air-cured burley has led to heightened activity by foreign buyers at this year's auction.
Although tobacco is a relatively small part of Maryland's agricultural economy, Evans said that its significance is not entirely measurable in dollars and cents. "Tobacco is the living history of Maryland," he said.
A stronger market prevailed for Soutern Maryland tobacco yesterday as the first week of auctions ended. Practically all grade averages increased over the previous sale by $1 to $4 per one hundred pounds. Top price by companies held at $180 per hundred pounds. The ratio of choice tobacco appearing for sale increased with less low marketings. Volume remained heavy. Gross sales Wednesday totaled $1,706,890 pounds and averaged $170.11 per hundred which was down $3.36 from opening day. The two day figure is 3,327,266 pounds averaging $171.75.