SIC 0132 Tobacco

Encyclopedia of American Industries | 2005 | Copyright

SIC 0132
TOBACCO

This classification covers establishments primarily engaged in the production of tobacco.

NAICS Code(s)

111910 (Tobacco Farming)

Industry Snapshot

This industry is composed of small U.S. farms that grow and sell tobacco to cigarette companies and other tobacco product retailers. In 2001, the farm value of U.S. tobacco crops reached $1.9 billion, according to the U.S. Department of Agriculture (USDA). The links between tobacco and several serious diseases, such as cancer and emphysema, first suggested in the 1960s and confirmed in the 1990s, have posed serious threats to the industry. Into the early 2000s, criminal and civil lawsuits against cigarette manufacturers focused public attention on the role of the tobacco industry in promoting health-threatening products and contributed to diminishing demand for tobacco. Increased exports of foreign-grown tobacco also affected American growers. However, changes in federal regulations and in harvesting and processing techniques have somewhat mitigated the uncertain future of tobacco farming.

Organization and Structure

Small farms, particularly in the southeastern regions of the United States, grow most of the nation's tobacco. The total number of farms producing tobacco in the United States dropped from 512,000 in the mid-1950s to roughly 89,700 in the late 1990s, at which time the number classified as tobacco farms—organizations deriving at least 50 percent of sales from tobacco—dropped to about 65,800. Though tobacco farms have increased in size since the 1950s, their average size remains relatively small in comparison to other types of farms.

The major tobacco growing states are North Carolina, Kentucky, and Tennessee. With South Carolina, Virginia, and Georgia, they produce more than 90 percent of the tobacco grown in the United States. In all, 17 states grow appreciable acreage of tobacco. Establishments from North Carolina and other states compete with each other at tobacco auctions, where major tobacco companies purchase their crops.

Flue-cured tobacco is produced in the southeastern Coastal Plain and the Piedmont region from Virginia to Florida. This variety of tobacco is by far the greatest component (about 95 percent) used in American cigarettes. Flue-cured is also the kind of tobacco most used in exported products. Fire-cured, or Class 2, tobacco is produced in central and western Virginia, Tennessee, and Kentucky. This tobacco has broad, dark green leaves, which are heavily drooping and gummy to the touch. After curing they are light to dark brown and strong in flavor. Class 2 tobacco is principally used in snuff in the United States, but it is also used for cigar manufacture and chewing tobacco in other countries. All other American tobacco is air-cured and is principally used in cigars, except for the light air-cured and Maryland types. Burley is currently...

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