Tobacco leaves come back to Lebanon

Stephen Lega

Brian Furnish, the president of International Tobacco Trading Group, chats with a customers at the Lebanon receiving station his company is operating jointly with the Golden Leaf Tobacco Company.

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Stephen Lega

Fred Serral, general manager of the Tobacco Direct, was all smiles about the tobacco his company has purchased in Lebanon.

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Stephen Lega

A bale of tobacco is loaded onto a scale to be weighed at the Tobacco Direct receiving station.

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After a one-year hiatus, tobacco sales have returned to Marion County.

When Phillip Morris USA moved its receiving station to Danville last year, it was the first time that local farmers could remember not being able to sell their tobacco in Lebanon.

This fall, two new receiving stations opened in Marion County.

“I’m really glad we came here,” said Brian Furnish, president of the International Tobacco Trading Group. “There was a void when Phillip Morris left.”

The International Tobacco Trading Group and the Golden Leaf Tobacco Company have established a joint receiving station in the Ken-Mar building, behind the Lebanon Goodwill and near Village of Lebanon Nursing Home.

Furnish said they previously purchased tobacco at auction houses, but they weren’t getting the kind of tobacco they wanted. With that in mind, this year they decided to open their own receiving stations in Kentucky. International Tobacco and Golden Leaf opened stations in Cynthiana and Lebanon.

“It’s been full every day, whether here or Cynthiana,” Furnish said.

He added that they’ve purchased tobacco from farmers in about 20 counties.

Down the road, Tobacco Direct has opened a receiving station in the Lebanon Warehouse, across the street from Wendy’s. This is the same building where Phillip Morris USA had its receiving station before it moved to Boyle County.

“I remember walking into this building when I was just out of college and seeing the most beautiful hand-tied tobacco,” said Fred Serral, the general manager for Tobacco Direct.

Familiarity was one of the reasons Tobacco Direct thought the warehouse would be a good location. Serral said farmers are accustomed to coming to Lebanon to sell their crop, and like the other receiving station, he said they have attracted farmers from several counties.

He added that Lebanon is centrally located and it has a reputation for bringing a good burley crop. On the day the Enterprise visited the warehouse, Serral estimated there was 300,000 pounds of tobacco on the floor. A forklift was busy loading the bales into a semi-trailer.

“Most of the tobacco leaves here and goes to east Carolina,” Serral said. “We’ve got a good mix of customers, big and small.”

Joe Spalding, a local tobacco farmer and a member of the Marion County Industrial Foundation, sees the new receiving stations as a good thing for the agricultural community and for Marion County’s economy.

He pointed out that four new receiving stations have opened statewide, and two of them are in Lebanon.

“It’s kind of a statement for the tobacco farmers in the area,” Spalding said. “They grow good, quality tobacco.”

Spalding is friends with Furnish and said he has sold most of his tobacco at the International/Golden Leaf receiving station. But Spalding also knows farmers who have sold to Tobacco Direct, and his impression is that both local receiving stations are competitive with Phillip Morris.

“From what I understand, the receiving stations have actually out paid Phillip Morris,” Spalding said.

The competition may have also affected Phillip Morris, too. Spalding said he’s heard from other farmers that Phillip Morris has raised its buying prices since more receiving stations have opened around the state.

One specific way the local receiving stations are benefitting small farmers is by paying the same price per pound for big bales (around 500 pounds) and small bales (around 100 pounds). The equipment needed to make big bales runs from $5,000 to $7,000, according to Spalding.

To encourage farmers to bring in big bales, Phillip Morris has paid 10 cents less per pound for tobacco in small bales.

Spalding explained that for a farmer who grew 10,000 pounds of tobacco that could mean a difference of $1,000 when he sells his crop.

“Some farming operations are just set up better to bale the small bales,” Serral said, “and we don’t penalize for that.”

Mac Bailey, the owner of Golden Leaf and S&M Brands (which produces Bailey’s, Tahoe and Riverside cigarettes), expressed a similar sentiment.

“I’m a farmer myself, so I know that you can’t have a perfect everything,” Bailey said.

Farmers aren’t the only people who benefit from having local receiving stations.

Spalding said farmers often grab a bite to eat or get gas when they sell their crop, and few may even do some Christmas shopping.

Serral agreed that the stations help the local economy.

“Any time you’ve got a tobacco warehouse, there’s money changing hands and it’s good for a small community like Lebanon. It’s good for Springfield. It’s good for the whole region,” he said.

The new receiving stations have also drawn the attention of state officials. Kentucky Secretary of Agriculture James Comer visited the International Tobacco/Golden Leaf receiving station last month.

“This is a big deal for tobacco,” Comer said. “A lot of people have said tobacco is dying worldwide.”

But if the local stations are any indication, the local market is doing just fine. Officials at both receiving stations have been impressed with the quality of the tobacco they have seen this year, and both have said they are offering contracts for farmers who would like to have them for next year.

And to Spalding, that’s a good sign.

“I think it’s a great indication that they are here to stay,” he said.