Tabor City tribune. (Tabor City, N.C.) 1946-1991, 1963-01-02


the grade composition Of this
crop. and thus again the sup
port adjustments have laoRed
behind the events reqvirinx
them. In 1861, however. Il Yves
found necessary to raise sup
pert prices by grsdes an aver.
eye Of "a cents per pound In
order 10 maintain the CROP av-
erage at the lawful level
shown on the chart.
Why LEVER oullasy
Awsreness OF the legs jus,
discussed Is important in an
analysis OF the relationship
between the Government pro-
gram and the trend toward
lower quality in the crop. The
primary factor that has allow
d farmers - Say hess atten-
tisn to Quality b The Increase
In prices paid for these srsdes,
and much Of this price rise has
occurred Independently Of the
Government program. The
p0bhc's shift toward filter
cigarettes requiring stronger
favored tobacco and the deve-
lepment Of manufacturing pro-
eesses able 70 utilize more
stems and poorer grades have
increased domestic manufact.
urers' demand for the lower
priced grades. AS a result, the
price diffcrential between
qualities classified by tn
USDA as poorer" and "bct-
ter," which was about 20 cents
Der pound in 1855, narrowed to
about 10 cents ~ 1861. Anoth-
2r result was that the Govern
ment was able to sell most Of
rs holdings of poorer quality
tobacco and by this summer
its stock consisted mainly of
the higher priced grades.
II pays farmers 10 sacrifice
quality II doing SO will raise
yields by more than enough 10
compensate for the lower price
received. II the present reIa.
tionship Of prices and qualities
provides incentive for this
course OF action, il would con-
tinue 10 do so even in the alb
scnce Of a Government pro-
gram. II is significant TO note
that this incentive has been
diminished by this years price
crops in the poorer grades, and
that il has been shown that
high yields Of high quality to-
bacco can be produced by fol-
lowing recommended cultural
practices.
Current SuppIy-Demand
In 1860 and 1861. increased
production resulting from riS-
ing yields per acre almost clos
cd the gap between production
and total domestic use plus
exports even though the lat
ter increased significantly. De-
spite this experience, auction
market prices increased sharp
~ i'm both years. The spread
Letwecn the average support
level and the average marker
price increased 2.8 cents per
pound in 1859 and 8.8 cents
in 1861.
Against this background.
three developments i'm 1862
apparently contributed TO price
weakness. First, while export
rose TO a six-ycar high in the
year ending July /. prospects
in foreign markets because
cloudy because oi cancer
scare in England, relatively
Unfavorablc tariffs levied by
the European Common Market.
and uncertainties associated
with England'S entry into the
Common Market. Second. do
nestle cigarette production in
the same marketing year rose
by only 2% as compared with
increases OF 81 TO ~ in mes,
years since 1856, and domestic
use of flue-cured unexpected
ly dropped slightly as the
trend toward less tobacco per
cigarette apparently continued.
Third, production rose by 81.
partly as result Of 4.3% in
crease in acreage allotments,
and therefore, stocks at the
beginning of the next season
arc expected to show an in
crease of about 80 million
pounds over year earlier, the
FIRST rise in tie carryover
since 1857. Thus the price
drop this Fall probably also
reflected the newly emerged
imbalancc bctwecn supply and
demand under the present
provisions of the Government,
Program.
(Scc editorial Pagc)