In Tennessee, the recent end of the first International Hemp Auction did not go as many farmers had hoped. Farmers had hoped that they could start bidding wars between buyers and turn their growing season around, but for most, that wasn’t the case
There was not an abundance of sales that took place, and the ones that did were not heated. Many farmers, disgusted with the low prices being offered, simply packed up their products and left.
Many farmers were offered a quarter of what they expected. They were being offered as low as $0.50 for a percentage point per pound. The math roughly comes out to the farmer being offered $6 per pound instead of $24.
Talking to the press, Ryan Rush of Rush Hemp Farms mentioned that part of the reason for this was because the market was flooded with low-quality product. The percentage of CBD per pound for many of the flowers up for auction wasn’t very good. He said that unless a product was above 10% CBD, he wouldn’t even break even processing it.
He believes that one of the biggest growing pains for the industry will be for farmers to learn how to grow quality hemp. There are farmers who are producing really good material right now, but there are many who aren’t.
“The average yield on an acre is between 2-3,000 pounds, so you’re talking $12,000 to $18,000 for something that is an extremely high labor crop right now. Whereas if most people were to take that price, they’re just losing money,” Rush said.
With some desperate farmers selling their crops at lower and lower costs to get rid of their subprime crops, buyers are using these lower prices to bring down the price for seasoned farmers who grew great hemp.