Live auctions kick off tobacco sales

Posted 8/21/19

Buyers walked along bales of tobacco in the first live auction on the secondary market Wednesday at Horizon Ltd. in Wilson.

“This is the first sale of the 2019 season,” said Kenneth Kelly of …

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Live auctions kick off tobacco sales

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Drew C. Wilson | Times

Buyers walked along bales of tobacco in the first live auction on the secondary market Wednesday at Horizon Ltd. in Wilson.

“This is the first sale of the 2019 season,” said Kenneth Kelly of Horizon. “It marks the beginning of the season for us.”

About eight buyers followed auctioneer Al Whitfield through rows of roughly 600 bales of leaf as a few local farmers and businesspeople listened. Horizon hosted both live and silent auctions.

“Most of the new crop tobacco is down-stalk tobacco as you would expect in the first sale of the year, but it’s pretty good quality,” Kelly said. “We just hope that we can get off to a decent start. Selling down-stalk tobacco, or lugs, can be challenging at times. We are trying to work through that. The crop overall still has a chance to be a good crop of tobacco.”

Over at American Tobacco Exchange, the second auction house in Wilson, a live auction of about 700 bales took place immediately after the Horizon auction concluded.

“Wilson has always been pretty much the center of the tobacco industry for years and years,” said Tommy Faulkner of American Tobacco. “With tobacco getting smaller in the demand and all that, a lot of tobacco has migrated to Wilson because that’s where most of your contract stations are and there’s two auctions here.”

Wilson was built on tobacco profits.

“Wilson is certainly the central focal point of the tobacco industry in the U.S. right now,” Kelly said. “There is no doubt about that. More tobacco is grown within a 100-mile radius of Wilson than anywhere else in the U.S. The majority of the tobacco in the U.S. is marketed in Wilson.”

“Wilson is the home of the ‘World’s Greatest Tobacco Market’ with 2019 being the 130th season of selling tobacco here,” said Norman Harrell, director of the North Carolina Cooperative Extension office in Wilson County. “Wilson is the hub of tobacco production and leaf sales. Farmers come from near and far to sell their crop here. All major manufacturers and most smaller manufacturers do business in Wilson.”

Wilson is one of the top five tobacco-producing counties in North Carolina.

“To put it in perspective, Wilson County grows almost as much tobacco as the state of South Carolina,” Harrell said.

Big tobacco contract buyers in Wilson like R.J. Reynolds, Philip Morris, Japan Tobacco International, Alliance One, Universal Leaf, Hail and Cotton, U.S. Tobacco and United Tobacco have started taking deliveries from growers.

The secondary market is where growers can sell what the contract buyers won’t buy.

“It’s opening day and hopefully we are going to set the prices to where the farmers can live with them and the farmers can get a little extra money,” said Rick Smith of Independent Leaf Tobacco Co. “We are out here on the secondary market now. This is not the contracts. Hopefully the tobacco sells good enough that the farmers can justify bringing it here and letting it go, but it is a very important day for the growers as far as their bottom line. Hopefully things will work out good for them because they have had every strike in the world against them between the tariffs and all that’s been going on. They have really been hit a lick and there is just no light at the end of the tunnel on any commodity — not just tobacco. It’s very important for them.”

“On the contracts, you’re not always going to grow the kind that your contract wants and you are not always going to grow the exact amount that you have a contract for, so there is a need for a grower to have a secondary market like this to be able to sell their tobacco,” Faulkner said.

Grower Linwood Scott of Scott Farms in Lucama was one of those farmers listening in on buyers’ bids for bales at Horizon.

“It’s very disappointing what I am seeing here this morning,” Scott said. “Tobacco farmers cannot survive with the prices that I am seeing here.”

Prices between the two auction houses ranged from 35 cents to a dollar a pound.

“We prefer a living wage and that’s not a living wage,”Scott said. “It’s pretty common knowledge that the companies don’t want this lower-stalk tobacco and there is quite a bit of it out here, obviously, and there is nobody that wants it.”

Live auctions like the ones conducted Wednesday at Horizon and American are a throwback to the past. Kelly said live auctions will be conducted at 10 a.m. each Wednesday and the public is welcome to observe the process.

“This is sort of a reminder of the past with the live auction and we would be glad to talk to people about that if they have an interest in it,” Kelly said.

His number is 252-292-8822. Horizon is in the old Liberty Warehouse located on the corner of Goldsboro Street and Ward Boulevard.