A USA story about hemp benchmarks - very interesting, very real.

Here is a really clear and undestandable story from the USA about their hemp industry. there are some very close parrells to what is happening here. Worth the 5 minute read to consider where we go next.

As hemp enters its fourth year of being federally legal in the U.S., the industry has not taken off as many had hoped. The CBD and cannabinoid sector is facing stagnation and uncertainty after an early boom period. Meanwhile, those working in hemp grain and fiber are attempting to establish footholds for their products in the midst of an upheaval in global commerce due to the COVID-19 pandemic and Russia’s invasion of Ukraine, among other shocks to domestic and international markets. 

For this article, Hemp Benchmarks spoke to stakeholders and other experts about the issues that need to be overcome if hemp is to develop into an established crop that is incorporated into the mainstream food, fiber, and wellness industries.

Supply Chain Blues

One of the biggest obstacles facing the development of a mature hemp sector is building supply chains for the various segments of the industry. Courtney Moran is Chief Legislative Strategist with Oregon-based Agricultural Hemp Solutions, a national government relations firm that works on hemp policy. “There’s inherent risk in agriculture and hemp has its own, unique risks associated with it,” she told Hemp Benchmarks. “And a lot of that is because we’re still developing our supply chain. We still are working on securing the right investment into our infrastructure, and we need to work in collaboration with folks that have the financial backing that can bring money not only into our farms but also into our supply chain.” 

More specifically, Moran added: “We need more decorticators, we need more fiber processing facilities, we need more grain processing facilities,” she said. “And we need them local to the farms, so that we aren’t having such high transportation costs.”

Meanwhile, the hemp cannabinoid sector continues to be weighed down by what is actually in its supply chain. Tyler Mark, an associate professor at the University of Kentucky’s Agricultural Economics Department, noted the excess hemp biomass “still sitting on the market” from the past several years continues to depress prices. 

However, he also pointed out that there is significant uncertainty as to how much of the production of previous years remains marketable. “My question is how much of that really is still viable, and what form is that in?” he told Hemp Benchmarks. “If it’s in crude, it’s probably still okay; if it’s in extract, it’s okay. If it’s still in flower form, maybe, depending on how it’s been stored.”

FDA Inaction

Federal regulation – in particular whether the U.S. Food and Drug Administration (FDA) will ultimately approve CBD as a dietary supplement and food ingredient – remains a constant issue for hemp stakeholders. According to Mark, “The elephant in the room is still the FDA and what role they’re going to play moving forward.”

Regarding the FDA, “something has to happen,” said Jane Kolodinsky, Associate Dean of Research at the University of Vermont’s College of Agriculture and Life Sciences. Hemp-derived CBD products, she told Hemp Benchmarks, could be classified by the federal government as GRAS, or Generally Regarded as Safe. 

However, Kolodinsky noted, the FDA allowing CBD products to be marketed as supplements could end up being a double-edged sword for the hemp industry. “If you label it as a supplement, then nobody’s controlling the supplement market right now,” she said, pointing to the fact that supplements are not FDA-approved to treat specific ailments or produce particular effects. Instead, Kolodinsky continued, “you can have [CBD products] FDA-approved and get that FDA stamp of approval … on the consumer side of things, consumers say they would really like to see some certification.” In other words, if the FDA were to allow CBD products to be sold as supplements it would open up new sales channels for businesses, but the lack of any formal approval from FDA would not help with consumer confidence.  

That mindset is echoed by Courtney Moran with Agricultural Hemp Solutions. “Once we get clarity from the FDA on the end products, that will really help our cannabinoid sector,” she said. “I do think it’s going to take federal policy reform to make that happen. And through that, there will be additional trust built, not only within our industry but for our industry from the general public.”

Research and Support for an Industry in its ‘Infancy’

Kolodinsky, emphasized that both the agricultural community and the general public will naturally have a learning curve in coming to appreciate legal hemp after an 80-year absence. “This is one of the few industries that truly is in its infancy,” she said. “There are very few industries that are just re-emerging. We really are at the beginning again.”  

According to the University of Kentucky’s Tyler Mark, “the industry is still so fragmented, in terms of different groups representing different pieces, that it hasn’t coalesced yet like you would see in a traditional commodity.” He also noted that, since legal hemp has gone through several years of a speculative, “wild west” phase, academics and researchers must work to better explain hemp’s potential. Federal agencies like the USDA, he said, are “still playing catch up. The universities are slightly ahead of them, because we were able to get into the game before them, because they couldn’t step in until [the 2018 Farm Bill]. Many of us were [researching hemp starting] in 2014, so we kind of have that learning curve.”

Mark also noted, “There has been quite a bit of money put into this, and I would applaud the USDA on their efforts.” He pointed to an announcement made in April by the USDA’s National Institute of Food and Agriculture (NIFA), regarding dozens of hemp-centric research projects it is currently funding. “In fiscal years 2021 and 2022 alone,” the statement reads, “NIFA has invested well over $20 million in hemp-related investigations. From large multistate efforts to grants supporting small businesses developing innovative technologies, these projects are seeking to develop the know-how that will help producers, processors, regulators, and officials make the best decisions about cultivating industrial hemp.”

Part of the overall educational process regarding hemp, said Melissa Nelson, is assisting the agricultural community in understanding the benefits of the hemp fiber and grain sectors. Nelson is co-owner of South Bend Industrial Hemp in Kansas. She also works as an independent research scientist, assisting farmers in her state with advice on growing hemp fiber and grain as economically viable crops. “It’s a different target audience [from CBD hemp cultivators],” she said. “Fiber is focused on large-scale commercial agriculture.” Nelson said programs like the one she has established are helping mainstream farmers understand the new options that hemp fiber and grain are making available to their operations, while keeping them price-competitive.

Changing Perceptions Among Farmers and Finding Hemp’s Niche

On the production side, veteran hemp cultivators say it appears the tide has finally turned when it comes to how traditional farmers are viewing hemp as a crop. In Kansas, Nelson told Hemp Benchmarks that mainstream farmers “watched us in 2019 and 2020; they became involved in 2021. We steadily grow [the hemp market] off of sound practices that are data-driven, farmer-focused. And we don’t encourage specialty equipment. We say [to farmers] don’t bet your farm on this, just use it as another tool in your tool box.”

Nelson acknowledged that hemp production cannot compete with such mainstream crops as corn and soybeans. However, she added, “let’s instead chase after the sorghum / milo market.” Sorghum, Nelson said, “is a crop that [hemp] can supplement, not replace, particularly as we target the acres that need water.” 

According to the National Sorghum Producers, an industry group, seven million acres of sorghum – an ancient grain that is used for food, animal feed, biofuel, and other products – was planted in the U.S. in 2021. In comparison, the USDA’s National Agricultural Statistics Service reported that 33,480 acres of hemp “for all utilizations” were harvested in the U.S. last year, illustrating how much room the hemp industry has to expand. 

“At the end of the day it’s a plant,” Nelson said. “You need to treat it like any other. If you feed it, have a good nutrient program, plant it at the right depth, it’s going to flourish. We’re trying to reduce the stigma that it’s some novelty crop.”

This was taken from; 
https://www.hempbenchmarks.com/hemp-market-insider/where-does-the-u-s-hemp-industry-go-from-here/
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Published May 17, 2022

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