Farmers in the United States have been facing hard times in recent years. Between tariffs and trade disagreements and poor weather, the revenue on common cash crops has dropped significantly. For some, this means, turning to alternative income streams such as solar or wind energy, but the 2018 Farm Bill may have brought back a shred of hope to American agriculture. With the passing of the 2018 Farm Bill came the legalization of industrial hemp production, which had been outlawed since 1937.
A recent study shows that farmers may be able to generate tens of thousands of dollars by growing industrial hemp. Farmers can see great returns in the cultivation of hemp because the hemp-derived CBD market is expected to reach US$23 billion by 2023. Numbers from the Brightfield Group expect that farmers can make about US$40,000 per acre from growing hemp.
Compare that to the US$1,000 per acre that corn farmers make, it’s easy to see why more farmers are looking to cash in on the industrial hemp boom. The acreage of hemp grown in 2019 increased over 2018’s numbers by 72 per cent. So far, in the United States, 87 per cent of the hemp crop was grown exclusively for CBD producers, though it’s worth noting that hemp has a vast number of uses outside of cannabidiol production. Though the amount of hemp grown for CBD production is expected to decrease, hemp will likely remain a lucrative cash crop.
Despite the rewards of planting hemp, there are also a number of challenges and risks that farmers will face when turning to the plant for economic salvation. Those looking to produce hemp for CBD production will find that it is difficult to find the correct type of seed needed that guarantees high CBD yields. Some farmers have found that they lost thousands of dollars on seeds that didn’t sprout or flower as advertised.
The worst of it though is that cultivating hemp is labour-intensive. It takes an additional investment, often costing tens of thousands of dollars to get equipment and the necessary retrofits to harvest the plants. And after harvesting comes trying to find a market for the crop. After its long history of being outlawed, it may take some time for farmers to embrace the infrastructure that can harvest and process hemp, especially when the CBD demand dwindles.
As alternative uses for hemp catch on, there is a chance that the market will improve. Though the crop has the potential for great profits, getting into the sector comes with great risks. New farmers looking to break into this sector are urged to take caution.