Tobacco, Horticulture & Forestry

 Unfavorable growing and curing conditions will likely cause the KY value of tobacco
production to fall below $300 million in 2016 – its lowest level in the post-buyout era.
 Improved yields may enable burley production to rebound modestly in 2017, but declining cigarette sales and slumping export demand will limit contract volume adjustments.
 Continued but slower growth in the smokeless tobacco market coupled with a smaller than desired 2016 crop will provide support for the dark tobacco sector in 2017.


 Excessive summer rain in 2016 resulted in modest decreases in produce sales to around $38 million.
 Strong local demand should bode well for produce markets again in 2017.
 Stronger greenhouse sales should offset slower nursery sales and reach about the same $96 million observed in 2015. Growth in 2017 will be driven by the regional housing market and retail economy.


 The forestry sector declined 4.8% from $14.6 billion in 2015 to an estimated $13.9 billion in 2016. The reduction was anticipated with the collapse of the Verso pulp and paper mill in Wickliffe resulting in a loss of over $430 million in 2016.
 Lackluster markets for the majority of hardwood lumber species continue to put a drag on the sector as well as demand for products such as railway ties. A slight dip in wood exports stopped a strong positive trend starting in 2011.
 White oak stave logs used for bourbon barrels bucked the overall trend for most wood commodities, increasing almost 8% in delivered mill price with a statewide average of $1,252 per thousand board feet. A seller’s market will continue into 2017.


Source: 2016-2017 Kentucky Agricultural Economic Situation and Outlook, University of Kentucky College of Agriculture, Food and Environment

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