Infant Hemp Industry Struggles With New Production Hurdles


By Markie Hageman

Federally legalized in the 2018 Farm Bill, hemp production has created a buzz in the agricultural industry. Hemp, Plant Cannabis Sativa, is technically marijuana, with lower THC limits. Industrial hemp will be harvested for its fiber, CBD oil, and grain. While the crop has been federally legalized for research, legalization for production and further research is determined on a state by state basis.  Alabama, Georgia, Hawaii, Idaho, Iowa, Louisiana, Mississippi, New Hampshire, Ohio, South Dakota, and Texas are the only states that have yet to legalize industrial hemp production.

Processing, insurance coverage, and reliable seed to ensure appropriate THC levels are all new issues growers face. Hemp crops can only have three percent, or they are classified as marijuana — a controlled substance. While this commodity has been a hot topic for quite some time, the most recent Farm Bill opened the gates for more opportunities with risk management and regulation.

ProAg Insurance Group Chief Operating Officer, Grant Adams, spoke at a recent event regarding industrial hemp and its future after the Farm Bill.  The crop will only be legal for commercial production once regulations by the Risk Management Agency have been established. At this point, it’s only legal for research purposes. Regulations are expected to be published by fall of 2019. The use of hemp will primarily apply to the auto industry, textiles, animal feed, human consumption, pharmaceuticals, and fibers.

Considered a high-risk crop, whether industrial hemp will be covered under crop insurance is a concern. Adams said until regulations have been established, no federal coverage will be provided. Once coverage becomes available, it will vary vastly, depending on the crop’s purpose and farming practices that are followed. Good Farming Practices must be followed in order for coverage, however, these standards haven’t been established.

Due to the ease with which the crop can reach higher levels of THC, seed reliability is also a major concern. All seed must be able to grow with THC levels under three percent, but seed genetics have yet to provide that security. The molecule cannabinoid can be triggered in plants during stress and can easily cause THC levels to go above the allowable limit. States will have to provide testing centers in order to assist farmers in monitoring THC levels.

In another conversation about industrial hemp, The Future Of Agriculture podcast, created by Tim Hammerich, hosted two guest speakers to discuss the ins and outs of the hemp industry. The “Live Hempinar” revealed a much more in-depth conversation regarding the challenges hemp productionfaces.

The first speaker, Zev Paiss, of Farmer’s Support Group, has an extensive background in the legalization of hemp. He founded the National Hemp Association (NHA) and became a broker following his role as Executive Director of the NHA. He estimated between 75,000 — 100,000 acres of hemp are grown across the U.S., despite being a relatively new and complicated crop.

“Processing certainly is a bottleneck in the industry,” he said. “It could be processing the grain for oil and seed and protein powder. You could be processing fiber.  The CBD portion is certainly the most developed, the infrastructure is there.”

Dr. David Williams, Professor of Agronomy at University of Kentucky, has been working in the hemp industry since 2014 when the last farm bill made research possible. Williams agreed largely with Paiss’ remarks, but said supply and demand for the crop is still uncertain.

Williams said the bottleneck in the industry will be the capacity to process whatever the consumer demands. The majority of approximately 1,110 applicants for the 2019 Farm Bill program were interested in CBD oil production.

Williams discussed cultivation of the crop, noting the importance of choosing the right variety for both the desired end product and the climate it is produced in.

“We are looking at high productivity land, not low quality land, if yield is the goal. It depends on what you’re growing it for. The variety that you would choose to produce each of the harvestable components will absolutely define success or failure. Variety selection based on the latitude where you’re producing the crop is paramount to success,” he said.

Additionally, strenuous manual harvesting will be another issue, considering no mechanical equipment has been invented.

Paiss said the end consumer has the power to drive demand for the product. Research so far has focused on CBD Isolate on the pharmaceutical side and with large drink companies such as Coca Cola and Budweiser. Body care and body building industries are heavily involved in the research of hemp as well. To date, hemp production is only at the research level considering the risks and lack of infrastructure that face the burgeoning industry.  There are many uncertainties facing the future of Industrial Hemp but it provides many hopeful opportunities.

“This plant is incredibly adaptable, there’s many many different complements to it, so it’s going to be a while before we understand what to expect and as more and more companies start to figure it out, it’s just going to continue to drive what farmers end up doing because they can see the market’s evolving,” Paiss concluded.

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