Friday, October 04, 2019

Hemp cultivation is increasing, but who's buying?

Hemp cultivation has grown rapidly in the U.S. since the 2018 Farm Bill made it legal at the federal level, with 13 states launching hemp programs this year to join the 21 that already had such programs before the Farm Bill's passage. This year there are more than 511,000 acres in 34 states licensed for hemp cultivation, according to a survey of state agriculture departments by advocacy group Vote Hemp. That's an increase of more than 455 percent over last year. But as growers rush to plant the popular crop, "many newcomers have no idea who will buy their crop or even who will prepare it for sale," April Simpson and Sophie Quinton report for Stateline.

Matt Cyrus, a hemp farmer and president of the Deschutes County Farm Bureau in Oregon, told Stateline: "It’s a high-risk crop — it’s hard to find markets . . . It’s not like corn, or wheat or other commodities, where you just go down to the local grain elevator." Some growers and others in the industry are trying to set up marketplaces and co-operatives that can help connect growers and buyers, Simpson and Quinton report.

Hemp growers are seeing bigger profits right now than they might reap from corn or other crops, but the hemp boom will likely flood the market and result in lower prices, according to Ian Laird of industry data provider Hemp Benchmarks, Simpson and Quinton report.

Adding to newcomers' woes, it turns out that hemp is harder to grow than many had realized, especially since, as a new crop, there's little established wisdom on how and when to best plant it, fertilize it, and keep it free of diseases. But it's critical for farmers to figure it out quickly in order to ensure the plant's THC content stays under 0.3%, especially in states where marijuana cultivation remains illegal, Simpson and Quinton report. THC, or tetrahydrocannabinol, is the pyschoactive chemical that distinguishes marijuana from hemp; the two plants are otherwise indistinguishable.

There's a lot of confusion over how to regulate THC content, to ensure that hemp farmers aren't secretly growing marijuana. "USDA is under pressure to overwrite a patchwork of state regulations on measuring THC by setting a national testing standard. The department has yet to produce federal guidelines that will shape how the new commodity is grown and sold, though USDA has said it plans to do so ahead of the 2020 growing season. A proposed rule is still pending at the Office of Management and Budget," Liz Crampton reports for Politico's Morning Agriculture.

Hemp is more expensive to grow than many realize, too, and harder to finance. "Getting a hemp farm started can cost tens of thousands of dollars, and harvesting isn’t cheap. Hemp farmers can start seeds in a greenhouse, lay down a sheet of plastic mulch, and plant the seeds and harvest the crop by hand. Growers are scrambling to find field workers amid a broader farm labor shortage," Simpson and Quinton report. "Meanwhile, banks are still leery of lending to customers who are growing a form of cannabis — which at certain levels of THC is still illegal under federal law — and entering a brand-new, risky market."

1 comment:

Bill Harshaw said...

Have FSA and NASS caught up with the hemp boom?