Following recent news that a number of tobacco contracts have been cut or reduced in Stokes and Surry counties, a Rural Hall warehouse owner says there are still alternatives for the area’s biggest cash crop.
Dennis White, owner of Old Belt Tobacco Sales, says his business is the only remaining auction location for non-contract flue cured tobacco in the state.
For the past five years he has been helping both contract and non-contract tobacco farmers find a market for their crop in his 100,000 square foot warehouse.
“During the peak of the season this building is full,” he said. “We receive tobacco every Monday through Friday and then we have a sale every Tuesday. We line it up and we have live auctioneer, just like in the old days, with a ticket marker and we bid on it bale by bale.”
He said he has five to six buying companies lined up to purchase tobacco this year.
“I sell all to leaf dealers,” said White. “They all process the tobacco and after it is processed they sell it to the manufactures and it all ends up going into cigarettes.”
The warehouse has become a key market for non-contract growers, but White says he also helps contract growers get rid of excess tobacco.
“Not all of the tobacco raised will make the contract,” he explained. “If the quality is not there the companies will not buy it, even if you have a contract. A lot of that tobacco comes here when they turn it down at the contract stations. That is the main reason I opened this place.”
He said he also had about 20 farmers last year who had no contract at all, noting that prices vary based on demand and quality of the tobacco.
“Two years ago we were averaging about five cents over contract price,” said White. “Last year we probably averaged 15 cents less than the contract price, but the farmers still had a place to go with it. What else is a farmer going to do with the tobacco if they will not take it at a contract station? You can’t throw it away. They bring it here and it may not bring $1.40 to $1.50 that it would at contract, but it will bring $1.15 to $1.20. That is a lot better alternative to having to destroy it.”
He said since farmers started to find out that their contracts had been cut for this year his phone has been ringing off the hook.
“I probably get 25 to 30 calls a day from farmers asking if they can bring their tobacco here,” he said. “I think probably 80 percent of the farmers who lost their contract will probably grow at least some tobacco and some of them will grow it all. There is always an alternative to get rid of this tobacco.”
White said he could not guess how the industry will look in future, but he felt certain that tobacco would continue to be grown in the area for at least the rest of his lifetime.
“It could turn around in a year or two and they could be going back to farmers they have cut out begging them to raise again,” said White. “Or it could go to a lot more auctions and having more buyers.
“You can make cigarettes out of any kind of blend, but manufactures always say it takes Old Belt tobacco from this area to make a blend for cigarettes to have the right flavor,” he added.
Nicholas Elmes may be reached at 336-591-8191 or on Twitter @NicholasElmes.