Market News & Headlines >> Katie's Blog: The Challenges of Industrial Hemp
By Katie Hancock
Lower grain prices have encouraged farmers in my area to expand their rotation. For example, my farm in Kentucky has grown industrial hemp in 2017 and again this year. I think industrial hemp presents a promising opportunity, but still poses challenges.
Lately, I have received emails and calls regarding industrial hemp from all over the country. Primarily it’s other farmers that are looking for new profitable opportunities. Honestly, it’s difficult to give much advice because it’s a developing market, and it takes time to develop a market for a new crop. Plus the industrial hemp has different markets including fiber, grain, and CBD oil (no, you cannot get a high from industrial hemp). My field could be used for a totally different purpose than the next which impacts seed choice and harvesting practice.
Even if industrial hemp had a developed market, it’s highly regulated, which limits the acreage. In 2016, 2017, and 2018 acreage increased from 2,300, to 3,200, to 6,700 acres. I expect more in 2019. I’d say most of the growers I know have around 100-200 acres each.
Why is acreage limited? For Kentucky, industrial hemp is still in the research phase because Congress has yet to remove industrial hemp from the list of controlled substances. Anyone handling or growing it must be licensed and follow strict guidelines. Industrial hemp does not have high levels of THC such as marijuana, yet possession without a license is punishable.
Kentucky’s program called “Agricultural Pilot Program”, is a phase of studying growth, cultivation, or marketing. The purpose of the pilot program is to expand the industry. Ultimately, the research will help to approve industrial hemp as a commodity.
From a risk management standpoint, industrial hemp is risky. Until it is defined as a commodity, there is no crop insurance coverage. Markets are still developing, so it’s not as simple as hauling a load of corn to the elevator and picking up a check the next day. You must have a solid plan several months in advance. Small buyers are risky by nature in terms of capital backing. You can produce without crop insurance, but not be paid. We haven’t had problems with payment or production, but it makes me nervous.
The agronomy aspects haven’t been overly difficult. Having a consistent stand is the primary objective. Weed control can be a challenge too. We did a burndown, but no more chemicals afterward. Luckily, the industrial hemp grew more quickly than the weeds. Our product is seed, so the same draper header for soybeans was sufficient. The biggest issue one of our friends experienced was physical damage from a thief. The crop was cut down on multiple acres, likely because it appeared to be marijuana.
The 2018 farm bill could fully legalize industrial hemp. I hope this happens because we need new rotation opportunities in Kentucky. From the number of questions I’m receiving, I can tell other farmers want the same. I'm also pleased with community support-- I did not know what to expect living in a very conservative region. I expect we’ll will stick with primarily corn and soybeans in the future, yet wish to increase industrial hemp acres.
For more information on Kentucky’s Industrial Hemp Research Pilot Program:
Email Katie at [email protected]