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TOBACCO SITUATION 
• Approved "by the Outlook and Situation Board February kj 19^8 
• - • • . SUMMARY • :: . 
Most tobacco growers will produce less tobacco in 19^8 than last year 
because marketing quotas and acreage allotments are less. These marketing 
quotas and acreage allotments are less because supplies of tobacco on hand 
are larger and prospective exports are smaller than a year ago. For the quota 
types, "one net reductions from last. year in total acreage allotted are as 
follows: liue-cured, 27 percent; Burley, 7 percent; fire-cured, 25 percent; 
and dark air-cured, 35 percent; For non-quota types, suggested 1948 goals call 
for' some decrease in type -32 (Maryland) from last year, and for .no change, in 
Virginia sun-cured and most cigar. types. Some increases were suggested for 
Ohio filler and Georgia -Florida wrapper. 
' Prices for flue-cured during this past season averaged about 15 per- 
cent less than a year earlier, while those for Burley have been averaging about 
20 percent more than last season. Prices for fire -cured and dark air-cured 
have been higher than a year ago, due in part to the higher level of support 
"prices. Substantial quantities of flue -cured, fire -cured, and dark air-cured 
have been placed under government loans. However, the proportion of Burley 
received for loans was far below that of a year ago.' 
The level of price support is likely to be higher this year because 
of increases in' the index of prices paid by farmers. Domestic use of leaf 
will probably remain high, mostly because of expected large cigarette produc- 
tion and consumption during 1948. There may be a small increase in consump- 
tion of cigars; but consumption of snuff and of chewing and smoking tobacco 
will probably be near the I9U7 level, 
Domestic production of each of the tobacco products in 1948 probably 
will be as large or larger than in 1947 but tobacco exports are likely to 
fall below last year when they were a fourth less than in 1946 and 35 percent 
less than the record year of 1919. 
United States tobacco exports have been declining since mid-1947 ? chiefly 
because the shortage of dollars abroad caused many governments to cut down on 
their imports. The United Kingdom, the largest importer of United States 
tobacco'^ has entirely stopped purchases from the United States. Many other 
European countries have cut down on Imports from the United States although 
Sweden and the Netherlands took more. In the last half of I9I+7 than in the 
same period of 1946. In the Far East, China and India greatly reduced pur- 
chases of tobacco from the United States in the last half of I9U7 while 
Australia and New Zealand took more 
Action on the European Recovery Program will have an important effect on 
foreign trade in tobacco. Many of the 16 nations in the program have taken 
large quantities of tobacco from the United States in the past. The European 
Recovery Program proposes that the United States send an average of 460 mil- 
lion pounds of tobacco for the fiscal years 1948-49 through 1951-52 to the 
participating countries, their dependent territories and to Western Germany. Ex- 
ports to these countries totaled 520 million pounds in 1946 and an average of 313 
million pounds in 1934-38, or about 25 percent of United States production in 
both periods. 
(For release February 12, a.m.) 
