Tobacco Production Costs and Returns in 2004

Overview

This study focuses on factors that led to changes in the estimated residual returns to management and risk from tobacco production in 2003-04. Residual returns per acre for flue-cured tobacco declined less than those for burley tobacco in 2004 because yield increases for flue-cured tobacco helped to offset increases in economic costs. Residual returns above economic costs were calculated using data from the last tobacco surveys, conducted in 1995 for burley tobacco and 1996 for flue-cured tobacco, and updated with 2004 data on prices, yields, marketing costs, and quota levels.