The fog of regulatory ambiguity is fading with the rollout of official guidelines for industrial hemp growers in the U.S.
The USDA has outlined provisions to approve domestic hemp production, and sets requirements for its producers. Those requirements include licensing, maintaining information on the land where hemp is grown, complying with procedures and provisions, testing updated THC amounts, and handling policy violations.
The 2018 U.S. Farm Bill directed the USDA to establish a national regulatory framework for domestic hemp production. The commodity is used in fabric, paper, construction materials, food products, cosmetics and the production of cannabidiol or CBD. Industrial hemp is already produced in Virginia, with 1,142 registered growers and 2,244 acres planted, according to Tony Banks, senior assistant director of agriculture, development and innovation for Virginia Farm Bureau Federation.
While provisions require hemp farmers to report planted acreage, the new rule also makes hemp eligible for federal crop insurance, USDA loans and numerous conservation programs.
“A tremendous amount of agronomic research must be pursued to determine the best methods for producing industrial hemp for whatever intended purpose — fiber, grain or oil,” Banks said. “We need to look at the varieties that are currently available to see which ones produce the best for given end-use in Virginia.”
As the USDA finalizes its regulations, Virginia growers are being cautioned about entering an increasingly saturated market.
Through the first full year of legal hemp growth in 2019, registered U.S. hemp acreage boomed from 78,176 acres in 2018 to 511,442 acres in 2019. With a market expected to surpass $10 billion by 2025 and regulations being put in place by the USDA, the industry expects that trend to continue.
However, Banks told farmers attending a VFBF Specialty Crops Advisory Committee meeting Dec. 11 that there is estimated to be about 80 times the amount of CBD and hemp than the market needs, and that wholesale prices were down as much as 75% since spring 2019.
Some estimates show growers could realize revenues of $10,000 to $15,000 per acre for producing hemp for CBD oil. However, the Food and Drug Administration has yet to approve CBD oil as safe for food, feed or dietary supplement which compounds the current oversupply and will weigh on the market until the issue is resolved. As markets begin to take shape, Banks anticipates a shift away from the current “Wild West atmosphere” of speculation and overproduction.
“Farm production of hemp is going to become specialized,” Banks said. “If this crop makes a go of it long-term, some company or buyer is going to source hemp with specific characteristics for a specific end-use. For the majority of hemp growers, it’s going to be like contract poultry or hog production. You’re growing for that specific market and that specific buyer and that’s going to be it.”
Source: www.lancasterfarming.com