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US Hemp Horror: Danger Signs as Harvests Drop and Values Plunge Through the Floor

US Hemp Horror: Danger Signs as Harvests Drop and Values Plunge Through the Floor

Total U.S. hemp fields harvested plunged by nearly 50% in 2022, dropping to just 18,251 acres, according to figures reported by producers to the U.S. Department of Agriculture (USDA). American farmers harvested about 33,500 acres in 2021, the first year USDA officially recorded industrial hemp data.

Hemp Today

19 May 2023 at 11:00:00

Hemp Today reports that the total value of hemp harvested fell even further in the USA last year, dropping 71% to just $238 million, down from $824 million in 2021. Flowers grown both indoors and outdoors brought in $205 million as harvested acres fell 43%, from 13,000 in 2021 to 7,105 acres in 2022; fiber fields produced $28.3 million in value as acreage dipped from 12,690 in 2021 to 6,850 last year; and grain valued at $3.63 million was turned out in 2022 as those fields shrank from 8,255 to 5,379 acres year-on-year, according to the report.

‘Little surprise’

In total, U.S. farmers planted 28,314 acres last year, but only brought in about two-thirds of those crops, the USDA figures show.

“The decrease in committed field production should come as little surprise as the reality continues to reconcile with the hype,” said Vermont-based consultant Joel Bedard. “This very simple data is directly proportionate to the traditional financial investment as well.”

The drastic falloff in hemp production was revealed Wednesday in a second annual national report by the USDA’s National Agricultural Statistical Service (NASS). Data was collected by NASS under authority of the Domestic Hemp Production Program, which is managed by the USDA’s Agricultural Marketing Service. The research is shaped by a number of federal agencies.

Root rot

Of relatively small value but perhaps most symbolic of the crash in the U.S. is the almost total collapse of business at the root of the hemp value chain, where acres grown to multiply cultivation seed brought only $1.48 million, as growing area harvested fell 92% between 2021 and 2022. 

Similarly, hemp clones and transplants, grown for cannabinoid-producing flowers, reached just 1.26 million plants, down 94 percent from 2021 as the value dropped 98% to $576,000.

U.S. hemp fields harvested are now at one-third of a peak hit in 2020, when crops were brought in from nearly 37,000 acres, according to estimates from non-USDA sources. The boom was led by flowers harvested for CBD, a market that was overhyped and fell far short of demand estimates, leaving farmers and investors burned as the biomass needed for production went unsold across the country, and prices plunged by as much as 90%.

“The USDA and NASS report clearly shows there is a real hemp war going on in the USA. Many states are enacting very conservative illogical regulations and fees on hemp foods and non-psychoactive hemp CBD products,” said Chris Boucher, CEO at California-based Farmtiva, a hemp ag services company and CBD consultancy. “This discourages new hemp startup companies, which affects farmers and others who may want to enter the hemp marketplace.”

Bright spots are few

South Dakota, one of only four states that showed gains in 2022, led all states with 2,550 acres harvested, up from 1,700 in 2021. Oregon, the second biggest grower last year, saw fields stabilize at roughly 1,900 acres, and total fields in Missouri showed a slight year-on-year gain, from 1,150 to 1,400 acres.

The biggest losses were recorded by CBD-centric Colorado, which saw a massive falloff in fields from 3,100 harvested in 2021 to just 480 in 2022, and California, where fields shrank from 2,250 to 870. Montana, the 2021 harvest leader with 4,500 acres, also saw a significant decrease year-on-year, with fields shrinking to 1,470 last year.

“I am a little dismayed, but not completely surprised, by the NASS report,” said longtime Colorado hemp activist Caren Kershner. “The demand for hemp-based products dropped in Colorado as more states established extraction facilities and began using locally grown hemp. The supply exceeded the demand.”

Basic changes needed

Structural changes are desperately needed if the hemp industry is to develop, according to Chicago-based attorney Sanford Stein of “As Congress considers reauthorization of the Farm Bill this year, it must include incentives for the hemp industry, just as it does for corn and other crops,” Stein said. “A proper function of government is to give incentives to nascent industries. A simple tax credit for use of hemp fiber in textiles and other products would be a huge boost.”

Hemp’s association with marijuana continues to handicap the industry, especially when it comes to the cost of some services, according to Florida hemp veteran Bob Clayton. “Banks still deny checking accounts and lenders refuse to lend,” said Clayton, with those that do provide services to hemp companies charging as much as $1,800 per year.

“Insurance is still unobtainable. I was quoted 3-times, 5-times, and 11-times what a common business would pay for a common business liability policy,” he said.

Also, testing costs are extreme and of poor quality, according to Clayton. “They block many innovative harvesting schemes since you must work around testing delays. You pay $400 for a quarter acre or a hundred acres. You can’t start small and grow,” he said.

What now?

While many stakeholders had hoped hemp fiber farming would begin to pick up the slack following the massive crash in hemp flower production for CBD over the past three years, the nascent fiber subsector appears still to have not reached bottom.

Colorado hemp consultant Richard Rose said food is a more logical play for the future.

“The answer to this debacle is staring us in the face, the one stable, proven, 100% legal segment which also already has the most consumers and retailers, current and potential: food from grain,” said Rose, the founder of the U.S.-based Hemp Food Association. “If we’re serious about making hemp a success, that’s the low-hanging fruit.”


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