Census Reveals Tobacco Farms Disappearing from Southern Agriculture

The southern region in the United States has been well known for several unique crops, including cotton, rice, peanuts, and tobacco.  However, the latest Census data reveal that farms growing tobacco are disappearing from the landscape of southern agriculture. 

Tobacco has had a storied history in the formation of this nation as it quickly became the most important cash crop in Colonial America, serving as the leading export commodity and a form of currency for the emerging nation.  Over the years, tobacco remained a valuable crop for several Southern states, which enabled many small family farms to survive. 

A federal tobacco program emerged as part of the New Deal in the 1930s to further protect small tobacco farms consisting of supply controls and eventually price supports.  Increased global competition from lower-cost producers in South America and Africa ultimately led to the demise of the program over time and eventually the 2004 passage of The Fair and Equitable Tobacco Reform Act, or more commonly known as the “tobacco buyout.”

This act provided nearly $10 billion to purchase tobacco quotas and provide compensation to growers to transition to a market-based economy.  The landmark legislation was expected to result in a significant concentration of tobacco farms, a geographic shift in production to the lowest cost regions, and larger farms to benefit from economies of scale.

This historic policy action, followed by two decades of increasing cost of labor, heightened government regulation, and declining consumer demand for tobacco products has led to depressed exports, growing imports, and arguably the most significant structural change in the history of U.S. agriculture.

According to the Ag Census, the number of U.S. farms growing tobacco has declined from 56,977 farms in 2002 to 2,987 farms in 2022 – a loss of more than 95% since the passage of the tobacco buyout twenty years ago.

While there was speculation that the elimination of tobacco quotas would lead to U.S. tobacco production moving out of the southern region to other areas, nearly 80% of U.S. farms growing tobacco today remain in southern states.

Kentucky has historically been the state with the largest number of tobacco farms, with nearly 60,000 (of its 90,000) farms growing tobacco in the early 1990s compared to roughly half that number in 2002 and only 984 recorded in the 2022 Ag Census. However, Kentucky’s share has declined from 42% of U.S. tobacco farms in 2017 to 33% in 2022. North Carolina remains number two in tobacco farms, with 822 farms, followed by Pennsylvania (377), Tennessee (241), and Virginia (173). 

As anticipated, acres of tobacco production per farm following the tobacco buyout has increased significantly – increasing from an average of 7.5 acres in 2002 to 69.5 acres in 2022, with the largest tobacco farms remaining in the flue-cured tobacco regions of North Carolina, Georgia, Virginia and South Carolina where production averages more than 100 tobacco acres per farm.

The relative importance of tobacco in southern agriculture has declined considerably.  Today, tobacco accounts for less than 3% of Kentucky’s annual ag cash receipts compared to averaging 25% during the 1990s.  For North Carolina, the nation’s second largest tobacco producing state, tobacco has fallen from 15% of ag cash receipts in the 1990s to only 3% today.  

Table 1. Changes in the Number of Tobacco Farms and Average Size (2022 vs 2002)

Snell, Will . “Census Reveals Tobacco Farms Disappearing from Southern Agriculture.” Southern Ag Today 4(13.3). March 27, 2024. Permalink