Last autumn marked the seventh season for an industrial hemp harvest since the passage of the 2014 Farm Bill. While producers in some states could legitimately be considered veterans of growing the crop the learning curve remains steep for producers at large. But we are starting to see more interest and strength in growing hemp for industrial demand.
Many growers had pulled back from even looking into hemp production following a couple of seasons of disaster with CBD oil. With the price for CBD biomass less than appealing and more traditional crops at record high prices, most were forecssting U.S. hemp production would take a big step backward. But there is a wave of growers and associations that are keeping the progress moving forward. Although at the moment, the industry remains vexed by the chicken-and-egg dilemma confronting the U.S. hemp fiber supply chain, meaning large acreage is necessary to convince investors to provide capital to build regional processing facilities, yet established processing infrastructure is necessary to warrant large-scale hemp fiber production under contract, many believe the breakthrough is near.
This year, producers like fourth-generation farmer Joshua Klumb from South Dakota dipped a toe into the waters. As the District 20 Senator, Klumb says he felt it was his duty to be among the first producers to try it out, and last summer about 12 farmers statewide grew industrial hemp. Starting small, Klumb grew plots comparing the performance and yield of multiple hemp fiber varieties to advance agronomic understanding for optimal planting dates, genetics, harvesting, and retting techniques, as well as to supply a feedstock for advancing the material science of separating herd.
Klumb will be the first to admit that there are numerous regulations and paperwork associated with growing industrial hemp following approval from the state, but he comments that actually growing the crop was easy. I’m told he planted mid-May and didn’t go back into the field until the second week in September. According to Klumb, he didn’t need any fertilizer because the seven-acre plot he selected had been a cattle yard, and no herbicides were needed because the crop canopied quickly, keeping the field free of weeds. I’m told the crop was harvested with the same combination used for corn.
Yielding about 1,000 pounds per acre, the crop was sold for 55 cents a pound, and Klumb will add another 40 acres to production this season. In fact, the vast majority of acres planted for grain and fiber all had some great success stories and are looking to plant more as well. According to Katie Sieverding, the Executive Director of the South Dakota Industrial Hemp Association, the number of acres planted with industrial hemp is expected to more than double in 2022.
According to New Frontier Data, a data, analytics, and technology firm specializing in the global cannabis industry and working in more than 100 countries, in the next six to eight months, a handful of regional fiber processors should be ready to run material. With regional fiber processors ready to go in 2022, processors will be looking to contract large acres of fiber hemp necessary to run facilities at full capacity throughout autumn 2022 to autumn 2023.
Personally, I believe the markets for hemp used for both industrial purposes, meaning fiber, as well as grain for human consumption, will develop and provide opportunities for growers in the future. Not to mention, I suspect approval from regulators will soon open the gate for hemp feed for animals as well. Bottom line, keep an ear open to what’s going on in your region as far as processors for industrial hemp, because as more and more come online, they’ll most likely have limitations to the number of acres they can process, meaning it might be more difficult to get in the game if you miss the opening window of opportunity in your local market. We’ve met some great leaders in that space, so if you are interested and have questions, call our offices at 816-322-5300 and talk to Todd and he can put you in touch with some solid people in the space. (Source: newfrontierdata.com, listen.spdh.org)
