Fewer than 4,500 tobacco farmers remain in Ky. in wake of buyouts

John Rothenburger has been growing tobacco in Kentucky since 1974

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BAGDAD, Ky. — John Rothenburger sits on the back of his pickup truck beneath a brilliant blue sky, the afternoon sun beating down on his corner of the earth.

It’s just the kind of weather he needs to get his tobacco in the ground after weeks of rain.

Rothenburger is one of fewer than 4,500 tobacco growers left in Kentucky — a state where the crop used to be king. Growing health concerns about tobacco use, as well as the increasing number of foreign growers, have devastated the industry in the state.

A Shelby County tobacco farmer since 1974, Rothenburger started when he was 16 years old, helping his father for pocket money. Now, he grows 26 acres of the labor-intensive crop on the same piece of land that his father farmed before him.

He’s held on through the buyout and the price drops.

Tobacco was once a major industry in the state, but as Americans became aware of the health risks, demand began to plummet.

In 2004, Congress passed the Fair and Equitable Tobacco Reform Act, which included the Tobacco Transition Payment Program, commonly known as the "Tobacco Buyout." The buyout provided cash payouts to tobacco growers as compensation for the loss of quotas.

William Snell, tobacco economist with the University of Kentucky, said the industry saw major consolidation after the buyout. Twenty-five years ago, most farms were raising an average of three to five acres of tobacco.

Now, gone is the era of small family farms. Today, most tobacco farmers have more than 30 acres, and most have diversified — raising cattle or other crops alongside their tobacco.

“Overall, the story is a lot fewer growers, a lot fewer communities dependent on this crop compared to where we were 20 years ago,” Snell said.

According to the Agriculture Census there were 29,237 tobacco farms in Kentucky in 2002. By 2007, just after the buyout, the number dropped by more than 70 percent to 8,113.

Between 2007 and 2012, the number dropped another 44 percent to 4,537 farms.

No one is sure exactly how many tobacco farms are left in the state, but Snell estimates that by the next Agriculture Census in 2017 there could be as few as 3,000 tobacco farms left.

Today, most Kentucky tobacco is sold for export.

Snell estimates that half to two-thirds of Kentucky tobacco ends up being shipped overseas, primarily to Europe and Japan.

But demand has gone down, a trend attributed to increasing health concerns and restrictions on consumption as well as excess supply in the world market and the high value of the dollar.

“It’s a volatile industry,” Snell said.

“The guys that are still in there look at it year to year still. For a lot of them it’s still a profitable industry if they can have a decent yield.”

With the cost of labor going up and the demand going down, tobacco farmers are finding it more and more difficult to make a profit each year.

Rothenburger said he was able to turn a profit last year, but he knew a lot of growers who lost money. Too much rain led to low yields.

“Labor is a big constraint right now, challenging a lot of people as well as the long-term uncertainty of the industry,” Snell said.

Rothenburger considers himself one of the fortunate ones. He has a reliable contract with a major tobacco company out of North Carolina, and a reliable workforce as a part of the H2A labor program.

He was able to use his buyout money to pay down debt for farming equipment.

Even so, his contract has been cut back the last couple years, and alternative tobacco products such as electronic cigarettes have him worried about the industry.

“It’s just been up and down. You just take what’s thrown at you and you go on.”

“Every year you’re at the mercy of the good Lord,” Rothenburger said.

“It’s a big gamble. It’s a bit like takin’ a stack of 100-dollar bills and going up to Belterra—you’re gambling. ”

But Rothenburger can’t imagine doing anything else.

“It’s just in my blood.”

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