overview
With a farm value in 2003 of $1.6 billion, tobacco is one of the top ten U.S. cash crops. The United States is fourth behind China, Brazil, and India in world production, and third behind Brazil and China in exports. ERS economists analyze U.S. supply, demand, prices, and trade for tobacco and review the effects of tobacco policy and regulation on tobacco farmers.

contents

• Background
• Trade
• Market outlook
• Policy

features
The Changing Tobacco User's Dollar evaluates the components of a dollar spent on a pack of cigarettes. U.S. consumers spent $81.1 billion on tobacco products in 2003, about $1.8 billion less than in 2002. Future expenditures are expected to decline as lower consumption outweigh higher costs facing tobacco product users. For cigarettes, a larger part of the consumers’ dollar went to taxes and manufacturers, while wholesalers, retailers, and farmers took less.

U. S. Tobacco Import Update examines use of foreign leaf tobacco by the United States and describes imports under the tariff-rate quota. For example, the domestic share of leaf used to manufacture tobacco products had trended down during the past decade, but it increased in 2002/03 to 55.2 percent.

recommended readings
U.S. Tobacco Industry Responding to New Competitors, New Challenges discusses policy options for bringing the tobacco program into the 21st century with a focus on a quota buyout. Tobacco growers are facing tough times as cigarette consumption shrinks and foreign producers edge them out of formerly lucrative markets.

Tobacco Outlook provides analysis and data on U.S. tobacco production, consumption, prices, stocks, imports and exports, as well as tobacco product output, consumption, and trade.

Trends in the Cigarette Industry After the Master Settlement Agreement describes the Master Settlement Agreement between cigarette manufacturers and States' attorneys general and provides readers with insights into changes in the cigarette industry since the agreement was signed. Cigarette companies have boosted prices as a result of payments required by the settlement. Higher prices have curtailed consumption, although not as much as originally expected. The long-term decline in cigarette consumption due to non-economic factors continues as well.

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recommended data products
Most frequently used tables provides 25 tables that cover U.S. tobacco production; supply and use; trade; the tobacco program; and tobacco product supply, use, and trade.

Statistical summary table provides data on leaf markets, tobacco-related indexes, leaf and product trade, domestic consumption, and stocks. Previously, this table appeared at the end of the Tobacco Situation and Outlook Report, but now will be updated in this briefing room under Most frequently used tables.

U.S. Tobacco Statistics provides two hundred tables that cover all aspects of the tobacco industry from 1935 to 1994. It supplements and updates the Tobacco Situation and Outlook report data series. Hard copies available.

related links
Links to other USDA and Federal agencies, as well as other organizations, concerned with tobacco.

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for more information, contact: Thomas Capehart
web administration: webadmin@ers.usda.gov
page updated: October 26, 2004