Tobacco Warehouse to Reopen, New Opportunity for Farmers - - ABC13

Tobacco Warehouse to Reopen, New Opportunity for Farmers


Reporter: Sarah Bloom l Videographer: Brian Vaughan

Danville, VA - Tobacco, of course, has a rich history on the Southside. First, there was the high-stakes, auctioneer-driven tobacco sale system that lasted more than a century.  10 years ago, it  was replaced by a set of contracts and sales between buyers and farmers.

"It's either taken in, or rejected. And if it's rejected, then he really doesn't have a collective area that he can go market that tobacco against anybody else's,  said Harry Lea, a former auction warehouse operator.

Lea and his business partner think they have a solution for that--a good option for folks that otherwise, had to pound the pavement and find their own buyers for excess tobacco.   The businessmen say they'll use a silent auction system at the Piedmont Warehouse to create a market for farmers sell excess tobacco-- and experts think it could really help local farmers expand their sales.

"You're looking at tens of thousands of dollars worth of product that could potentially be sold," said Pittsylvania County Virginia Cooperative Extension agent, Stephen Barts.

Lea thinks the business has exciting potential for Danville, too.

"If you just use the economics of a multiplier effect, that's a lot of money!" said Lee. "So it's more employment, business license, supplies that we're going to be using, the whole shooting match. It's just's a new business."

A new twist on an old model-- that could just help the local tobacco industry grow!

"It could be wildly successful, it could be a miserable failure but we think it's going to be somewhere in between," Lea chuckled.

Now Lea and his partner, Jim Eggleston, aren't going into this project blind. They're following the model of a company out of Wilson, North Carolina that is doing something similar... and we're told that business had a very  successful last year.

 The warehouse is set to open in August 16.

See the full press release below for details on how to participate:

PIEDMONT WAREHOUSEAlternative Opportunity for Grower Sales of Flue-Cured Tobacco

Former tobacco auction warehouse operators, Harry Lea and Jim Eggleston, are reopening the former Piedmont Warehouse located at 301 Trade Street in Danville, Virginia, for the sale of flue-cured baled tobacco. The warehouse will open for receipt of tobacco Monday, August 16, 2010. Tobacco was last sold in Piedmont Warehouse in 1971. The warehouse was leased for 38 years to Corning, Inc. The tobacco auction system, which lasted for over a century, was replaced in 2000 with contracts agreed upon by growers and their respective receiving stations. This current situation allows growers no opportunity to market excess tobacco. The rejuvenation of Piedmont will allow growers an alternative opportunity in a collective setting whereby growers and buyers can meet. Baled tobacco will be received, weighed, USDA graded and moisture tested. Tobacco will be received by appointment Monday through Wednesday. Tobacco will be separated into lots based on stalk position and quality. On Thursday of each week, buyers will be invited to inspect and submit sealed bids. At the end of these days, the bids are opened and both the seller and buyer notified of the results. The grower can accept or reject the bid. The grower may offer tobacco on 3 occasions. If there is no sale after the third offering, the grower must remove their tobacco from the warehouse. Both the seller and buyer will pay a fee to the warehouse. All transactions are confidential. Growers are reminded that tobacco is processed according to stalk position. Prices weaken considerably for primings, lugs and cutters after the second week of September. Any interested growers and buyers are encouraged to contact either Harry Lea (434-489-1545) or Jim Eggleston (434-489-4292) for further information.

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