Potential tobacco tariffs terrify North Carolina farmers
RALEIGH, N.C. (WNCN) — Talk of tobacco tariffs are terrifying to farmers, especially exporters from North Carolina.
John Weaver said 70 percent of the tobacco he grows in Johnston County gets exported out of the country. He also grows soybeans and corn, but tobacco is his key cash crop and has 70 percent of his investment.
“It would devastate us,” Weaver said of looming Chinese tariffs. “That could wreak havoc on us.”
North Carolina Agriculture Commissioner Steve Troxler said China is the state’s top trading partner. Agricultural exports to China total $598 million. The number one crop is tobacco with the most recent recorded annual amount reaching $156.3 million.
“We worked very very hard to get China tobacco to come to North Carolina and they have become our number one export destination. Quite frankly, that hard work paid off in stabilizing the market,” Troxler said.
The state department of agriculture held a press conference Thursday afternoon to discuss what the commissioner called a trade war. Troxler said he hopes national leaders from the United States and China will negotiate a trade deal to keep both countries happy while avoiding negative effects to farmers.
China also imports about $56 million of North Carolina pork, as well as such staples as soybeans and cotton. The list of proposed tariffs include 33 agricultural products from North Carolina.
“I think the question is why in the world, when we have these trade disagreements, do ag products seem to end up as the chess pieces in the game that’s going on? Thinking about that, I think it’s pretty simple. Everybody eats,” Troxler said.
Johnston County Extension Director Bryant Spivey said North Carolina farmers may have to search for other things to grow if China imposes the proposed tobacco tariff. The problem is that tobacco is a higher value crop that allows farmers to make a living even with limited acreage.
“We need development and research on developing new crops, and there is some of that going on in North Carolina, but most likely it’s going to take multiple types of crops to replace what we have in tobacco,” Spivey said.
On his fields near Kenly, John Weaver rotates crops annually. A field full of soybeans last year will grow tobacco this year. Tobacco costs more to grow, but sells for about $5,000 an acre with a profit of $1,000. An acre of corn brings in $50-100, so it takes at least 10 acres of corn to make up for a single acre of tobacco.
Weaver will plant 150 acres of tobacco in late April. He began growing all of the seedlings for those fields in late February. They are in a special greenhouse with floating styrofoam planters. A special lawnmower rig slides across the top of the leaves every 48 hours to keep the plants uniform.
He estimates 90 percent of the the tiny seeds would not be harvestable if planted directly into the fields rather than in the float house.
“Tobacco is a long process. We’ll transplant (to the fields) between April 20 and probably May 20. The tobacco will be out there until the first part of October. It lasts from threat of frost to threat of frost,” Weaver said.
Commissioner Troxler said he hopes the next six months will allow time for communications between the United States and China.
“For the most part these crops won’t be harvested until the fall of the year, so there’s time to negotiate, time to re-establish relationships and markets, and that’s what’s got to happen for us to continue to be successful in agriculture,” Troxler said.
Weaver hopes this is all a case of political posturing.
“We have a business man in the White House,” he said. “He’s using posturing tactics to negotiate and hopefully he’ll help our trade deficit with other countries.
“It makes us nervous that tobacco’s in the mix. Most of us remember the Russian grain embargo that Carter put on in the late 1970s, early 1980s, and that was a total nightmare. We sure hope that we’re not going back in that direction.”
Weaver said he has faith in the process and is hoping for a good outcome. There is nothing he personally can do but sow his fields and look forward to the late summer harvest.