American Industry Overview: Tobacco

Industry Snapshot

This industry is composed of small U.S. farms that grow and sell tobacco to cigarette companies and other tobacco product retailers. In 2005, consumers spent $88.7 billion on tobacco – a significant increase from the 2000 total of $77.7 billion, though down slightly from the 2002 total of $89.1 billion – and the farm value of U.S. tobacco crops was approximately $1.07 billion (down from the 2003 total of nearly $1.6 billion), according to the U.S. Department of Agriculture (USDA). The links between tobacco and several serious diseases, such as cancer and emphysema, first suggested in the 1960s and confirmed in the 1990s, have posed serious threats to the industry. Into the early years of the first decade of the 2000s, criminal and civil lawsuits against cigarette manufacturers focused public attention on the role of the tobacco industry in promoting health-threatening products and contributed to diminishing demand for tobacco. Increased exports of foreign-grown tobacco also affected American growers.