Tobacco is a member of the nightshade family. It is commercially grown for its leaves and stems, which are rolled into cigars, shredded for use in cigarettes and pipes, processed for chewing, or ground into snuff. Christopher Columbus introduced tobacco cultivation and use to Spain after observing natives from the Americas smoking loosely rolled tobacco-stuffed tobacco leaves.

Tobacco is cured, or dried, after harvesting and then aged to improve its flavor. The four common methods of curing are: air cured, fire cured, sun cured, and flue cured. Flue curing is the fasted method of curing and requires only about a week compared with up to 10 weeks for other methods. Cured tobacco is tied into small bundles of about 20 leaves and aged one to three years.

Virginia tobacco is by far the most popular type used in pipe tobacco. It is the mildest of all blending tobaccos. Approximately 60% of the US tobacco crop is Virginia. Burley tobacco is the next most popular tobacco and is an air-cured tobacco. It burns slowly and is a cool smoke. Other tobacco varieties include Perique, Kentucky, Oriental, and Latakia.

Prices – Tobacco prices (Types 11-37) half way through the 2003/4 marketing year (July-June) rallied to an average of .89 per pound from .84 in 2002/3. Average yearly tobacco prices have remained in the tight range of .83-.90 over the past four marketing years, up from the .78-.80 range seen in the previous three years.

Supply – World production of tobacco in 2001, the last full reporting year for the series, fell -3.6% to 6.582 million metric tons from 6.826 million metric tons. The world’s largest producer of tobacco in 2001 by far was China with 39.3% of world production, followed at a distance by India (with 8.9% of world production), Brazil (8.2%), and the US (6.2%). US production in 2001 of 408,236 metric tons was down by nearly 50% from the 2-decade high of 810,154 metric tons in 1997.

US tobacco is primarily grown in the mid Atlantic states which account for more than 86% of US production. Specifically, the largest tobacco producing states in the US are North Carolina (with 39.9% of US production in 2002), Kentucky (25.6%), Tennessee (8.0%), South Carolina (6.6%), and Georgia (6.2%).

Flue-cured tobacco (type 11-14) is the most popular type grown in the US with production of 525.940 million pounds in 2002, down from 579.091 million pounds in 2001. The second most popular type is burley tobacco (type 31) that had a production of 303.895 million pounds in 2002, down from 334.066 million pounds in 2001.

US production of tobacco in 2002 fell to 886 million pounds, down 10.6% from 992 million pounds in 2001 and down 50% from the 2-decade high of 1.787 billion pounds posted in 1997. US farmers have sharply reduced the planting acreage for tobacco. In the last two years, farmers have planted about 430,000 acres of tobacco, much less than the 600,000+ acres planted in the 1988-99 period. Yields have been fairly constant and have averaged about 2,100 pounds per acre in the past 10 years, with a variation of plus or minus 10%. The farm value of the US tobacco crop fell to .726 billion in 2002 from .952 billion in 2001 and .002 billion in 2000.

US production of flue-cured tobacco (Types 11-14) in 2002/3 rose to 565.0 million pounds from 544.4 million pounds in 2001/2. US production of burley tobacco (Type 31) in 2002/3 fell to 300.0 million pounds from 343.7 million pounds in 2001/2, and was down by more than 50% since the 10-year high of 628.2 million pounds in 1997/8.

US production of cigarettes in 2002 was unchanged from 2001 at 580.0 billion, although that was down sharply by 19% from 10-years earlier (718.5 billion in 1992). US production of cigars fell slightly to 2.900 billion from 2.993 billion in 2001, but that was up by 67% from 10 years earlier (1.741 billion in 1992). US production of chewing tobacco in 2002 was unchanged from 2001 at 47.2 million pounds, which was down sharply by 31% from 10-years earlier.

Demand – US per capita consumption of tobacco products in 2001, the last full reporting year, fell to 4.14 pounds per person per year, down from 4.22 pounds in 2000 and 5.60 pounds 10 years earlier (1990). Per capita cigarette consumption in 2002 rose to 3.60 pounds from 3.40 pounds in 2001, but per capita consumption of cigars fell to .58 pounds from .65 pounds in 2001 and chewing tobacco per capita consumption fell to .40 pounds from .47 pounds in 2001. Per capita consumption of loose smoking tobacco was unchanged at 0.15 pounds.

Trade – US tobacco exports in 2002/3 fell sharply to 261.9 million pounds from 386.5 pounds in 2001/2. Meanwhile, US tobacco imports in 2002/3 were little changed from 2001/2 at 566.6 million pounds. The US exported 135.0 billion cigarettes and 270 million cigars in 2002/3.