US farmers are facing a new threat: the growing use of e-cigarettes that get their nicotine from processed tobacco grown much more cheaply in emerging markets.
The quality of the leaf used to be the competitive point for American farmers against international growers, rather than price. However, leaf quality matters little in the production of e-liquids leading to a push by e-cigarette makers to take advantage of the lower cost of producing tobacco - a labor-intensive crop - in developing countries.
Darrell Varner, president of the Council for Burley Tobacco, said, "The picture is pretty grim. It is a threat to us as growers, because we have not gotten any assurance at any time that any of the juices will contain nicotine extracted from US tobacco.”
E-cigarette sales have been booming, rising in the US alone to US$2.97 billion in 2018 from US$860 million in 2014, according to IRI data compiled by Bloomberg.