After a summer where many farmers were battling to get their crops to harvest, many are now finding that they have few opportunities to sell their crops. They may have overcome drought in some areas, corn earworms or southern blight in another, but now they still might not be able to turn a profit.
Farmers across the country jumped at the chance to cash in on this new crop. Many made costly mistakes along the way and learned the hard way that this crop doesn’t always just grow like a weed.
If farmers are lucky, they are storing their crops away, waiting for a rainy day. Many more farmers put everything they had into their crops, and won’t be able to stay afloat if they can’t sell their biomass soon.
Processors can’t keep up.
The explosion in farmers growing hemp from 2018 to 2019 is the cause of this problem. Eager farmers overproduced on the crop. Now processors can’t keep up with the demand. The expensive equipment needed to process raw hemp into CBD oil is hard to come by. Processing the hemp is a huge bottleneck for the industry, and will continue to be for the foreseeable future.
Many banks are still wary about getting involved with the industry until the regulations are more clear. This leaves the middlemen to fend for themselves and grow more slowly than they could if they had access to capital.
All this has led to the price of hemp to drop significantly. By November 2019, the price of industrial hemp biomass was half of what it was in April. This might rebound in the future, but it likely won’t rebound completely.
There are no other markets to sell it.
Unlike with other crops, hemp farmers also have their hands tied. They may be responsible for growing the hemp, but they have little or no say on how it’s sold. There are few options to sell your hemp, and your only real option is to sell to a hemp processor.
There are dried hemp flowers being packaged without processing and being sold as a smokeable flower. However, this is only a small portion of overall crops, and only high-grade hemp makes the cut.
Right now, there are no middlemen who will take the plants and get the farmers paid. Processors are few and far between, and exporting the crop would likely yield little profit.
In Tennessee, there was even an International Hemp Auction, where farmers offered up their wares to potential buyers. While this idea may pan out in the future, this year produced lackluster results. The overproduction caused low bids that were few and far between.
The projections for the growth of the hemp industry predicts a tremendous amount of growth over the next few years. This will likely happen as infrastructure catches up to the enthusiastic farmers. Industrial hemp will be a cash crop for a long time to come, but people’s dreams of instantly becoming millionaires aren’t likely to come true.