North Carolina Tobacco Industry is Growing in New Directions

Historically, the tobacco industry has played an integral role in North Carolina’s economy, serving as the backbone of the state’s agricultural base. While North Carolina remains the leading state for flue-cured tobacco, growers are beginning to explore new opportunities that extend beyond the crop’s traditional markets.

“Tobacco is a wonderful industrial plant because it’s a great producer of different things that could be valuable in the marketplace,” says Scott Johnson, vice president, Agricultural Biotechnology for the North Carolina Biotechnology Center.

Boost From Biotech

The Biotechnology Center helps support the development of new technologies through grants to universities, and loans and support services to the industry, particularly small startups. Most notably, the center worked with Tyton Biosciences, which uses a form of a tobacco plant that will produce high-sugar tobacco. It can contribute to transportation fuels and other industrial chemicals, as well as to the biopharmaceutical startup Medicago and its Proficia technology. The technology uses tobacco’s ability to grow rapidly and produce proteins in order to more efficiently produce vaccines.

“They demonstrated a real efficient process, which not only is competitive but is actually a preferred method to deliver quantities of vaccines in a very short period of time. That’s really where some of the more promising research and development options are,” Johnson says. “Tobacco has been studied since the beginning of biotechnology because of its fast-growing nature and high-protein production. It’s been looked at for a number of different uses outside of its traditional markets.”

Johnson says mass production of tobacco for these alternative uses is still a few years away, but as more companies begin exploring tobacco for industrial purposes, such as chemicals or transportation fuels, opportunities for farmers will increase.

“We’re the No. 1 tobacco state, so we know how to grow tobacco. Companies that are developing these new uses are looking at North Carolina because of our leadership in tobacco,” Johnson says.

Overseas Expansion

In the meantime, many tobacco growers are looking overseas to expand the crop’s market value. Markets in Asia continue to offer increased export opportunity, with China accounting for 10 percent of the state’s flue-cured demand.

“As the standard of living improves for many folks in countries like China, it brings with it a demand for a more premium, American-blend style cigarette,” says Tim Yarbrough, president of the Tobacco Growers Association of North Carolina (TGANC).

Yarbrough says members of the TGANC have attended several trade missions to Asia to gauge the interest of buyers. In addition, reverse trade missions have also helped promote the industry. North Carolina’s Agriculture Commissioner has invited foreign investors to a VIP tour of the state, complete with tobacco curing demonstrations and farm tours.

“We have to believe in the future and work hard for profitable opportunities in the long term. I know that we grow the finest quality leaf in the world. It is imperative that we maintain and advance that position,” Yarbrough says. “It’s a tough balancing act to make sure that quality earns the premium price we feel it deserves. The global economy is making a lot of sudden shifts, and as the dollar gains strength, it obviously impacts our export potential.”

Promising Production Methods

Meanwhile, growers like Stanley Hughes, a third-generation tobacco farmer in Hurdle Mills, are boosting their bottom line by employing new production methods. Hughes’ 100-year-old Pine Knot Farms was one of the first farms in the state to grow certified organic tobacco. Hughes says that even though the organic process requires more work, the organic certification has opened up new markets for his crop – most recently the Santa Fe Natural Tobacco Company in Oxford, N.C.

“Tobacco has a lot of opportunity to extend beyond its historical markets. I think what we’re going to see is new uses will be different. Production practices will be different. The plant will look different. Along with all these differences, we’re going to see new economics. We’re going to see new opportunities,” Johnson says.

“We’ll have a chance to utilize our knowledge and historical base, and deliver products of value not just for export or the historical market, but that can be used right here in North Carolina with placing or creating new markets … and that makes a promising future for tobacco and for North Carolina agriculture.”