Content ID


More growers, less hemp in industry slowed by uncertainty, pandemic

The first year of nationwide cultivation of industrial hemp has been a mixture of retrenchment and optimism for growth in the longer term. “The industry isn’t going to go away,” said hemp entrepreneur Morris Beegle on Thursday. “It’s going to become more of a whole-plant industry.”

Although there are many more licensed hemp growers than there were in 2019, hemp acreage is down by 9%, the first year-on-year decrease since Congress allowed hemp pilot and research programs as part of the 2014 farm bill, according to Hemp Industry Daily. The 2018 farm bill legalized the cultivation of industrial hemp, and the USDA opened the gate to farmers by issuing a rule last Oct. 31 to assure consistency in state regulation of growers.

“Hemp has a bright future, but there are many obstacles to overcome in the next few years to get the industry situated so that it can flourish beyond just the CBD/cannabinoid side of things,” said Beegle, who is active in hemp enterprises, marketing, and advocacy. “More grain and fiber.”

Farmers, always on watch for a profit-making new crop, were attracted in 2019 and early this year by reports of high revenue from hemp sold for processing into CBD oil, which is used in foods and dietary supplements. Hemp can also be used in textiles, biocomposites, fuel, and livestock rations, though those uses, which generate lower revenue for hemp biomass, have drawn less attention.

The pandemic helped quash interest in hemp, much as it hit the rest of U.S. agriculture and the economy overall. The FDA has yet to resolve questions about CBD, now sold in a regulatory gray market, which has also discouraged hemp investment. Wholesale prices slumped this year due to an oversupply of hemp flowers and biomass. Some farmers were unable to find buyers for their 2019 crop.

“There was quite a bit of speculative growing with no contracts or sales prospects prior to planting,” said Eric Steenstra, president of Vote Hemp, which promotes hemp as a U.S. crop. “This year, many pulled back and grew less as the market simply was not large enough to handle the amount produced. We are still seeing a lot of farmers growing [hemp], just smaller quantities.”

Based on reports from state agriculture officials, Hemp Industry Daily said that 465,787 acres were licensed for hemp this year, down 9% from 511,442 acres in 2019. Colorado, Kentucky, and Oregon have been the leading states for hemp planting.

States licensed 21,496 growers this year, well above the 16,877 growers of 2019, reported Hemp Industry Daily in mid-June. Steenstra of Vote Hemp said there were only about 3,500 growers in 2018.

Vote Hemp estimated actual plantings last year at about 230,000 acres – less than half of the licensed area. Growers face a number of challenges that constrain plantings, such as finding seed that will reliably produce plants with virtually no THC in them. Anything that’s more than 0.3% THC is considered illegal marijuana and has to be disposed of. Vote Hemp is circulating an online petition to raise the limit to 1% “so that farmers can grow hemp crops without fear that they will later have to destroy them.” Delegates at this year’s convention of the American Farm Bureau Federation, the largest U.S. farm group, voted in support of a 1% limit and to give growers 45 days to harvest hemp after gathering samples for THC testing, rather than the current 15 days.

In February, the USDA suggested hemp would be a so-called specialty crop, with relatively small plantings and production, compared with crops such as corn, soybeans, wheat, and cotton, which are planted on tens of millions of acres. That said, “the recent rapid growth of the alternative plant-protein food sector does show some possibility for a ‘specialty’ crop to suddenly become a growing market sector,” said the USDA’s Economic Research Service report. “The next few years should see a resolution of the legal and regulatory issues constraining hemp production in the United States, leaving domestic production, imports, consumer demand, and exports to dictate growth and long-term market size.”

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
Read more about

Talk in Marketing