Flue-Cured Tobacco Cooperative Stabilization Corporation is a cooperative marketing association organized on June 1, 1946 and began operations on August 12, 1946. The cooperative is owned by and serves the flue-cured tobacco farmers from the "bright leaf area" of Florida, Alabama, Georgia, South Carolina, North Carolina and Virginia. Often referred to as Stabilization, CO-OP, or FC, the corporation is a cooperative marketing association of flue-cured tobacco farmers whose membership is evidenced by the purchase of one share of common stock with a par value of five dollars ($5.00).

Stabilization administers the price support program for flue-cured tobacco under contractual agreement with the U.S. Department of Agriculture's Commodity Credit Corporation (CCC). Under the contractual agreement with CCC, and auction warehouses, Stabilization makes loans to eligible flue-cured tobacco farmers whose tobacco has been grown within their allotted quota and which does not bring the minimum price established for that grade at the auction market. Funds to advance loans to farmers are borrowed from CCC. The farmers' tobacco which is consigned to the cooperative is pledged as collateral to CCC for the money borrowed.

Farmers vote every three years by referendum on continuation of their program. By approving continuation, farmers agree to acreage/poundage controls in return for price support.

Flue-cured tobacco is sold by farmers at warehouse auctions after U.S. Department of Agriculture graders evaluate each lot of tobacco under standards according to type and quality. The grade assigned determines the support price. If a farmer's tobacco fails to bring an auction bid price of at least one cent per pound above the support price established for that grade, and if the farmer meets all USDA requirements, the tobacco is eligible to be accepted into Stabilization's inventory. The farmer is paid for the tobacco at the point of sale.

Tobacco received by Stabilization at the auction market is trucked to contracted processing facilities for reweighing and regrading. During regrading, a USDA factory grader evaluates if the proper grade was assigned to Stabilization tobacco on the market. The evaluation determines if an original grade will be changed, up or down, or remain the same. The purpose of regrading is to insure that the proper packing grade is assigned prior to processing. Stabilization tobacco is then threshed into strip form, redried and packed into cardboard containers. Stabilization's tobacco inventory is stored in their own storage facilities and contracted storage facilities. Stabilization's tobacco is available for sale on a direct basis to any manufacturer or leaf merchant worldwide.

Since its inception in 1946, Stabilization has received over 7.1 billion pounds of tobacco from its grower members. Annual receipts have ranged from 2% to 26% of net producer sales. During this same period, sales from inventory to the trade have amounted to 7.09 billion pounds of tobacco.

Through Stabilization's administration of the price support program, all flue-cured tobacco farmers are assured a minimum price for each grade of their tobacco, grown within their allotted quota.

The overall effect of the price support loan program is to provide the farmer with a stabilized and orderly marketing system which eliminates drastic fluctuations in market prices and insures a consistent supply of quality tobacco for all customers worldwide.