- 3 - 



Prices for the 1955 binder crop, excepting that of Southern Wisconsin, 

 were all substantially lower than at any other time since the war. The 1954 

 prices were above the 1950-5^ average except for the Connecticut Havana Seed 

 crop. Another example of market weakness for the growers was the large quan- 

 tity of the 1955 crop under loan; in all, l6«5 million pounds of a total of 

 kl . 6 million pounds . 



Lower prices for 1955 a^cL the uncertain future resulted in a large cut in 

 acreage in 1956. Growers of Connecticut binder tobacco cut their acreage by 

 half. The acreage in Wisconsin was not cut so drastically. Although prices 

 recovered with the lower supply, a substantial amount of the tobacco did not 

 enter directly into commercial channels. The total under loan was over 3*8 

 million pounds out of a total supply of 29.6 million. 



The Future 



Several factors will affect the future balance of supply with demand for 

 cigar binder tobacco. Important among those are: (l) The number of cigars 

 consumed, (2) the proportion of these using processed binders, (3) the quantity 

 of tobacco required to produce a pound of processed binders, (k) the quality of 

 tobacco required, and (5) production costs for different growers. 



Cigar Consumption: Proportion of Cigars To Use Processed Binders 



Close to 6 billion cigars have been smoked in the United States each year 

 since the end of World War II. The estimate for 1956 is 2 percent above that 

 number. The effect of the processed binder on cigar consumption appears to be 

 favorable. Consumers are accepting the brands that use it. The techniques of 

 blending the tobaccos to be used in the binder, and of blending the processed 

 binder with the filler and wrapper, can be expected to improve as the manufac- 

 ture and use of the processed binder develops. With this improvement, the 

 cigars may become more pleasing to the consumer and consumption may increase. 

 Increased consumption would call, in turn, for more tobacco, especially for 

 filler, which is the larger part of the cigar. 



About 20 percent of all cigars are now (April 1957) using processed 

 binders, and it is expected the proportion will exceed 30 percent by the latter 

 part of 1957* Present capacity for production and planned expansion by the end 

 of the year should be sufficient to provide processed binders for 3 billion or 

 more cigars. It appears reasonable to expect that use of the processed binders 

 will continue to increase. The savings in labor, in the amount of tobacco in 

 storage, and in the handling of the tobacco are substantial. These savings 

 will encourage the manufacturer to use processed binders in al l brands in which 

 consumers show no preference for natural binders. Some consumers will call for 

 imported, all-Havana (made of imported Cuban tobacco), or handmade cigars. 

 These are, however, a small part of total cigar consumption. The savings are 

 relatively more important on the lower priced cigars, where the shift to proc- 

 essed binders will be made first. More than three-fourths of the cigars con- 

 sumed in the United States sell for 10 cents or less. Cigars selling at 2 for 



