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Leaf Trends and Quality Expectations

Leaf Trends and Quality Expectations. U.S. Tobacco Forum Myrtle Beach, S.C., July 17, 2009. Worldwide Leaf Production (x-PRC). + 0.3%. Worldwide Cigarette Production (x-PRC). + 4.5%. Chinese Cigarette Production. Worldwide Trends .

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Leaf Trends and Quality Expectations

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  1. Leaf Trends and Quality Expectations U.S. Tobacco Forum Myrtle Beach, S.C., July 17, 2009

  2. Worldwide Leaf Production(x-PRC)

  3. + 0.3% Worldwide Cigarette Production(x-PRC)

  4. + 4.5% Chinese Cigarette Production

  5. Worldwide Trends • Total Leaf Production and Cigarette production remained very stable with the exception of China • Greater variations in leaf production have occurred within different regions over the past 10 years • Future Production dependant on demand • There has been major cigarette manufacturer consolidation throughout the last 5 years.

  6. U.S. Quality Expectations

  7. Leaf QualityExpectations • Contract Company specific requirements • NTRM FREE!! • Tobacco moisture • Pesticide Residues

  8. Company Requirements Number of harvests Crop Throw Requirements Quality Expectations Color line that is in highest demand Overall adherence to all contract stipulations

  9. NTRM

  10. NTRM • Zero Tolerance • Synthetic • Non-Synthetic • Organic • Corporate NTRM Elimination Policy

  11. NTRM On-Farm Inspection • 100% Farm Inspection • Grower education • Farm Rating System

  12. Tobacco Moisture All companies require adherence to moisture levels Some companies offer incentives for tobacco delivered in a certain moisture range Rejection of the tobacco due to higher than acceptable moisture levels

  13. Pesticide Residues

  14. Pesticide Residues • Increased emphasis from all customers • Applications of only approved pesticides at labeled rates • Follow all post harvest interval requirements • Avoid application/drift of non-labeled pesticides

  15. Pesticide Residues • Hidden problem • Costly to detect • Much more extensive testing is being required by more and more manufacturers • Rejections by manufactures and leaf dealers

  16. Concerns

  17. SCHIP Effects • $0.61 per pack tax increase on cigarettes • 32% increase on cigars • The cap on the tax changed from $48.75 per 1000 pieces to $402.60 per 1000 pieces • $23.68 per pound increase on roll your own tobacco

  18. Concerns • Input Costs • Aging grower population • Lack of younger people beginning to grow tobacco • Aging Infrastructure

  19. Concerns • Increases on state cigarette taxes • Increases in state wide and city smoking bans • NC and VA

  20. Questions

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