It’s a sticky situation. As various agencies weave the framework for the booming hemp marketplace, many farmers watch from the sidelines, pondering the potential pitfalls and the unprecedented opportunities this crop offers. And some are even choosing to put up stakes on a hemp gamble.
“Hemp has a very promising outlook for farmers as a rotational cash crop that can be very viable,” says Dion Oakes, a farmer with Wright-Oakes LLC in Colorado.
In 2020, only four states—Idaho, South Dakota, Mississippi and New Hampshire—have not acted to make it legal to grow hemp. Caren Wilcox, executive director of the U.S. Hemp Growers Association, expects to move toward legalization of the crop in the next year in those four states.
The 2019 U.S. Hemp License Report by Vote Hemp reported 511,442 acres licensed in 2019, with 16,877 grower licenses issued in 34 states. That’s an increase of more than 455% versus 2018 licensed acreage. Vote Hemp predicts the numbers might be closer to 230,000 acres planted and 115,000 to 138,000 harvested.
“We need to realize that because hemp was illegal for about 70 years, farmers lost their experience in growing it,” Wilcox says. “One of the things we [U.S. Hemp Growers Association] will be working on is to increase agronomic information and communication between our growers and people who want to buy and expand their product line.”
Caren Wilcox offers these four tips for farmers looking to bankroll their first hemp crop in 2020:
1. Get smart. You need advice and counsel from those with growing experience. Farm Journal Hemp College is a great place to start.
2. Source your seed.
3. Know your state regulations.
4. Have a customer lined up before you plant.
“Many of us have been saying to growers that they should identify their customer and hopefully have a contractual relationship before they put in a large crop,” Wilcox says.
Michael Bowman, co-founder of First Crop, a public benefit company that supports farmers who cultivate hemp, expects to see the hemp industry further evolve in 2020. “This industry is maturing a little, just like an awkward teenager growing into an adult, where we did some crazy things that nobody understood this past year,” he says. “People didn’t have take-off agreements, they didn’t have supply chain agreements. There’s pain right now for those who weren’t treating this crop as we would any other crop in agriculture.”
He sees 2020 as a wake-up call for many in the industry. “We’re going to see banking come into play this year, which is going to make things easier for a more traditional farmer. We will see an insurance product that is far from perfect. But it’s a first step in this next three- to five-year period where we get a legitimate, federal insurance product in place.”
How to source seed
A large number of people applied for licenses, and fewer actually doubled down and planted a crop. Wilcox says one of the reasons might have been the limited supply of certified, stable seed and clones. Bad farming conditions, including flooding and drought, might have also played a role.
The question of critical importance: Will there be enough seed in 2020?
There will be plenty of seed, but it’s hard to say the quality of what’s on the market as suppliers and growers alike have made rash decisions, says Tom Dermody, vice president of strategic development with International Hemp Solutions.
“In the last three months we’ve seen a significant increase in the public-facing resources concerning seed and nursery product inputs coming from the state departments of agriculture, and it’s critical people understand where the potential risks lie if they don’t use these resources effectively.”
If you’re looking to source seed in 2020, start by asking the right questions. Who grew the seed? What is its performance record? Is it right for my environment and climate? Dermody says you should ask suppliers where and under what conditions they’re attaining their yields.
“Farmers made some risky decisions on account of market immaturity this year, but the regulatory impacts are significant come 2021,” Dermody says. “This type of information is critical for farmers to have access to when assessing potential suppliers.”
Hemp’s Future: Boom or Bust?
Expect 2020 to be a transitional year, Wilcox says. “I’m optimistic the amount of product will increase.”
As a farmer who’s been in the industry, Oakes says he looks forward to 2020 because reliable, trustworthy people are starting to get into the industry and more credible universities and associations are getting involved. “This is needed, because we strongly need research and validated studies behind this crop for new farmers wanting to get into the industry and even farmers who’ve been growing hemp,” he says.
An essential part of hemp’s growth will be whether FDA will drop its poker face on regulations and bring clarity in 2020. Bowman says many consumer product groups and large beverage and food companies stand ready to incorporate hemp into their products.
“This is something the consumer clearly wants, and we all want to grow and deliver to the marketplace, a safe product,” he says.
CBD will likely still be the belle of the hemp ball for now, but expect the penny antes in grain to signal growth. “The predominant product likely in 2020 is still going to be the full-spectrum extract market,” Bowman says. “But I do think we’re seeing a lot of interest across the board in grain in particular.”
The challenge, he says, is building out the infrastructure to support harvest and conditioning. It’s happening on a small scale now, but investment and commitments from the industry are still needed.
By 2025, Wilcox has high hopes hemp will be used in rotation by many farmers and be on the path to a mainstream crop.
“That’s ambitious, but I know if we can build up the processing market, which we should be able to do, then we can make products like hempcrete [a biocomposite material made of hemp hurds and lime, used for construction], dresses, t-shirts, biofuel, paper—it’s like a magical plant. There’s a reason that humans have apparently been using and cultivating this crop for millennia.
Interested in learning more about growing hemp? Join us at Hemp College. Click here to see the list of upcoming events.
USHGA is a nonprofit trade organization that provides data, research and educational resources to help farmers be successful from planting to harvest to marketing. Learn more about the U.S. Hemp Growers Association at UShempGA.org.
Related articles
The Top 10 Hemp Stories From 2019
Hemp Industry Now Has Trade Group
Find complete coverage and the latest updates on hemp at AgWeb.com/cannabis
