Each passing year, tobacco-producing companies are spending huge amounts of money on the advertisement and promotion of tobacco products. At the same time, U.S. citizens are spending billions of dollars on tobacco-related expenses. This massive sum includes not only purchases of tobacco products for recreational consumption, but also on medical expenses and lost productivity due to the health consequences of tobacco use as well.
In the year 2012 alone, American tobacco producers spent almost $10 billion USD on marketing campaigns to purvey cigarettes and smokeless tobacco within the United States. In other words, these companies are spending about $26 million US dollars each day for such purposes, which breaks down further to more than one million dollars each and every hour for selling and advertising expenses by the industry.
Where All Those Tabacco Leaves Come From
Tobacco farms in the US produced approximately 800 million pounds of tobacco in the year 2012. To reach this total, tobacco was grown in about nineteen states in the US. Of these, the states of North Carolina, Georgia, and Kentucky combined to account for almost eighty percent of the production.
At present, things are not looking too good for tobacco producing companies, the states that are being hit the hardest are North Carolina and Kentucky, where tobacco is still an integral component in their statewide economies.
North Carolina has 12,095 farms producing tobacco for commercial sale. The total area devoted to tobacco production is 320,599 acres in North Carolina, with the average size of land dedicated to tobacco covering 26.5 acres per farm. Kentucky has 44,967 tobacco farms that reside within its own borders, though allotments here are generally much smaller than those in North Carolina. These Kentucky farms cover 255,053 tobacco-dedicated acres statewide, with the average tobacco acreage per farm in Kentucky standing at 5.7 acres.
Additionally, the state of South Carolina, despite having only 1275 farms growing tobacco within the state, has an impressive 54,550 tobacco acres dedicated to tobacco, with the average growing operation being much larger than those in North Carolina and Kentucky, covering an average area 42.9 tobacco acres per farm.
At the bottom of our tobacco-producing states list in the US is Kansas, with a mere 13 farms dedicated to growing tobacco across it, despite otherwise often being seen as an agricultural oasis an iconic member of America’s “Bread Basket” region.
Where Tabacco Production Goes
Over 94 percent of tobacco that has been grown in the US is used to make cigarettes, for both domestic and international usage. The rest is used for chewing tobacco, snuff, snus, cigars, pipes, and various other minor forms. Increasingly, deriving nicotine from tobacco to produce “e-cigs” and “vaping” technologies has become increasingly popular and lucrative.
The Decline of American Tobacco
Despite the monstrous proportions of this market sector and the firms therein, production of tobacco has actually decreased quite significantly in the U.S. in recent decades. Since the Eighties, when there were 180, 000 tobacco farms in the United States, the number has declined to around a mere 10,000. Despite this, the U.S. continues to remain among the biggest producers of tobacco leaves. In fact, the U.S. trails only three other tobacco-producing powerhouses globally: China, India and Brazil.
Is the U.S. Tobacco Industry Drawing Its Final Puff?
When we take a close look at the available data on tobacco growing, processing, and production, we see that there has been a long-term decline in utilization of tobacco by consumers and, subsequently, decreased demands for production on American tobacco product manufacturers and \ exporters. Over the past twenty years, exports of tobacco in the world have risen as America’s own tobacco exports have fallen. This is due to a number of factors, US companies increasingly using less expensive foreign tobacco. It is interesting to note that while cigarette manufacturing outputs for American tobacco companies rose, there was a fall in domestic leaf usage. At the same time, farm prices of tobacco have shown an upward trend. Even so, since the year 1980 the output of leaf tobacco grown in the U.S. has fallen and, combined with trends of increased growth abroad, tobacco companies and growers in the U.S. have faced negative consequences on their bottom lines.