Hard data is difficult to come by at the end of Pennsylvania’s first commercial hemp harvest in eight decades, but it’s clear prices and demand haven’t been nearly as high as many had hoped.
“My overall impression is that whether it is an independent growing group with dry hemp in their barns, or marketers in the process of extracting and then looking for buyers of crude or refined product, very little (money) is exchanging hands at this point,” Jeff Graybill, an agronomy educator at Penn State’s local Extension office, said in a recent email.
Lancaster County had permits for more growing locations than anywhere else in the state — 180 of the 812 statewide — and most of the fields here were relatively small ones planted for a compound extracted from called CBD.
For those who grew without contracts, Graybill said, the market is reportedly very slow. And, he said, many of those who did have arrangements with farmers are not paying “until they see what the market is” for CBD.
Holtwood farmer Steve Groff, who planted 70 acres of hemp for CBD and worked with dozens of Amish farmers growing smaller amounts, calls the glut an artificial one because lack of extraction capacity has created a huge bottleneck.
Pennsylvania's top five industrial hemp growers this year were all in counties bordering Lan…
Some processors are offering very low prices right now “because farmers are desperate,” but he’s choosing to wait, believing demand for CBD is strong and as the market works itself out, quality product and personal relationships will result in a fair price.
Groff is planning to grow hemp again next year but hasn’t decided how much yet, and says it’s probably good that the euphoria over hemp is being tempered a bit.
Reports from across the nation show similar situations after growers jumped in hoping to profit from the new market as CBD, which does not cause a high and is often sold as dietary supplement, showed up in all kinds of products over the past year.
A big three-day hemp auction held in Tennessee late last month drew a lot of attendees, then disappointed them.
Wate.com, a Knoxville TV station, reported that the hemp sold for about $6 a pound — roughly a quarter of what farmers had been expecting to get.
It quoted Ryan Rush, the owner of Rush Hemp Farms in Maryville, Tennessee, as saying that worked out to about $18,000 for a field yielding 3,000 pounds, which would be a money-losing price for many, given that hemp is “an extremely high labor crop right now.”
Vote Hemp, a national advocacy group, reported in September that more than 511,000 acres of hemp were licensed across the U.S. this year — more than quadruple 2018’s total.
In late November, hempgrower.com quoted Vote Hemp President Eric Steenstra as guessing that more than 95% of the farmers were growing for CBD.
He expects to see some reshuffling in the market, he said, as some growers drop out and others continue on and become more successful as the market matures.
Price drop since summer
The monthly hemp report from online trading platform Panxchange.com shows a significant price drop since this summer.
“For November, biomass transacted in the range of $0.80 to $1.40 per percentage point of CBD content per pound,” it said.
By contrast, in June the platform showed that range was $3.75 to $4.70.
Hemp can also be grown for fiber and seed. Those varieties generally need more processing and specialized equipment, but the products can be used in or thousands of products, including automotive interiors, textiles, paper and foods.