Researchers say hemp can be profitable, but only on a small scale and probably more for oil than fiber

Growing and cultivating industrial hemp can lead to profits and jobs, but only on a small scale, according to a report by the University of Kentucky's College of Agriculture, Food and Environment. Kentucky, along with Hawaii and Maryland, have passed bills creating commissions or authorizing hemp research. (ThinkStock photo by Markos Markovic)

"Profitable opportunities may exist for a limited number of farmers and processors, particularly in seed and oil, but the current lack of efficient fiber processing techniques, potentially strong global and domestic competition, and a high return from row crops in recent years are some of the factors that could limit the number of growers willing to shift much of their acreage into industrial hemp production," Carol Lea Spence reports for the college.

Agricultural economist Will Snell, one of the study’s authors, told Spence, "If political challenges are overcome, enticing processing interests to locate in Kentucky, along with production research, will be critical to capitalize on a relatively small, but expanding niche market for hemp products."

"Hemp can be grown for both fiber and seed. Some people have talked about the potential for industrial hemp fiber to be a major market for Kentucky farmers," Spence writes. Greg Halich, one of the study's authors, told her, "Based on what I’ve seen, that is not going to happen in Kentucky. If people are doing this to make money, it’s going to be on the oilseed side, not on the fiber side, at least in the foreseeable future. In the end, fiber production is going to depend on a processing plant being fairly close and willing to pay a high enough price to entice farmers to switch over to grow it." (Read more)

The House-passed farm bill has an amendment allowing colleges and universities to grow and cultivate industrial hemp for academic and agricultural research purposes in states where it is already legal, without fear of federal interference. For a roundup of the hemp legal front at the state level, with a closer look at Vermont, from Lisa Rathke of The Associated Press, click here.