Monday, June 17, 2024

Hemp Farmers Still Searching For Companies To Buy Crop

What nobody told the farmers interested in incorporating industrial hemp into their plow and pick repertoire is that there might not be anyone out there willing to buy it after harvest. 

Cannabis advocates have spent decades preaching the need for industrial hemp production in the United States. Because not only is this plant a versatile product — one that can be used for fiber, fuel, food and even housing — they swore it would revitalize the national economy by providing the American farmer with another cash crop.

The big boys on Capitol Hill finally bought into this spiel a couple of years ago and legalized industrial hemp production at the federal level. 

The farming community was excited about this development, to say the least. After all, commodities prices on one-time cash crops like corn and soybeans have been dropping since 2013. But what nobody told the farmers interested in incorporating industrial hemp into their plow and pick repertoire is that there might not be anyone out there willing to buy it after harvest. 

In Wisconsin, a report from the Department of Agriculture shows that 94% of the state’s hemp crop has gone unsold. As sad as it sounds, only 6% of the hemp plants grown across the state have been turned into cash. And only a few farmers are reaping those benefits; the rest have been left with pipe dreams, more farm debt and a heap of hemp that no one wants. 

“So there is a lot of people sitting on material right now and nowhere to go. Part of it is lack of processors, lack of planning, especially in trying to create sales of their products,” Brad Hansen, Director of Operations at Ledge Rock Hemp, told NBC 26.

RELATED: First Year Hemp Growers Struggle To Reach Profitability

A lot of the problem is that while hemp has the potential to replace many traditional materials used to manufacture products here in the Land of the Free, only a select few companies are going that route. Not many changed the course of their production plans just because the government legalized industrial hemp. So, while thousands of farmers started getting into the hemp game once their state passed laws, they had nowhere to sell the crop once it was all said and done. 

Hemp Farmers Still Searching For Companies To Buy Crop
Photo by CasarsaGuru/Getty Images

The best some farmers can hope for right now is to sell off their inventories to companies in the business of manufacturing CBD products. After all, it’s a market that is predicted to generate more than $2 billion in 2020. But even that is a bust, considering the cost of hemp-derived CBD has declined by around 70% over the past year.

In Pennsylvania, the situation is much of the same. While some farmers have found the means to at least break even on their new hemp venture, others are taking it on the chin. “This year was, I think, probably in general a little bit of a disappointment for most people,” one hemp farmer told NBC affiliate WGAL. 

RELATED: Hemp Is On Its Way To Becoming An American Cash Crop, But Farmers Have Challenges

Hemp hopefuls attribute these dark days to the fact that there is no infrastructure in place yet to handle the business. 

“We’re building this entire new industry with new supply chains and new expectations, new paradigms, so it’s challenging in that regard, but also very exciting,” said Dr. Steve Groff, the owner of the hemp company Groff North America. Nevertheless, “I think the future is still incredibly bright for this and for Pennsylvania,” he added.

Agriculture experts say they agree that the lack of infrastructure is a big part of the problem. Still, they are cautioning farmers on this crop until that gets sorted. “There is no grain elevator where you can go and just sell your hemp,” said Liz Binversie, an Agriculture Educator with the University of Wisconsin. “I strongly recommend to not bet the farm on this, at least not now. Not until we have the infrastructure needed, not until we have pricing that’s maybe a little more reliable.”


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