WOOSTER, Ohio — Brad Bergefurd is a horticulture specialist with Ohio State University, with 25 years of experience with Extension. Hemp, however, has him “a little scared.”
“You could be the best farmer in the world, but if Mother Nature doesn’t cooperate with you … you could just lose $10,000 an acre,” he explained to attendees at Ohio State’s first Growing Hemp in Ohio workshop Jan. 24 in Wooster.
“Don’t be in a hurry for hemp. Take time,” Bergefurd later added.
Workshop
Hemp has drawn a wide range of interest across the state and country. Over 150 people attended the workshop, ranging from farmers, to extension educators, to people in the pharmaceutical industry, to others attracted by talk of a growing industry and potential high returns on investment.
Historically, Ohio has been behind others, since the state did not participate in research pilot programs and did not legalize the crop until months after the 2018 Farm Bill legalized it federally. It may be catching up though.
“At the end of December, we went from being towards the very tail end of the industry to being one of the first three states to be approved [by the U.S. Department of Agriculture],” said Craig Schluttenhofer, of Central State University.
The USDA has since approved more state and tribal plans. Several other states, including Kentucky, have opted to continue operating under the 2014 pilot program.
Ohio finalized its state plan last month. The rules went into effect Jan. 29.
Markets
CBD is currently the biggest market for hemp, since there is little infrastructure for hemp fiber, and since CBD has the largest demand and largest potential return right now. Schluttenhofer said farmers could receive $20 per pound for their crops.
Steve Ayers, of Acela CBD, which works with over 100 hemp farmers, said in 2018, farmers could receive about $75,000 per acre. In 2019, however, that number dropped to about $20,000 per acre.
“We’ve still got a profit margin here of about $10,000 per acre, but we don’t know what the 2020 crop’s gonna be yet,” Ayers said. He noted that the University of Kentucky estimated crops could be worth about $17,000 per acre in 2020.
Nehlia Mcintyre, of Hudson, Ohio, is a beginning farmer hoping to add hemp to her crops this year.
“I’ve always been into wellness, and I heard about the properties of the plant,” she said.
Her mother used CBD to help with pain management and sleep when she was diagnosed with cancer, and Mcintyre has also used it for her own sleep. She is currently researching and gathering resources on the crop and hopes to grow hemp in a greenhouse on her land in Hudson this year.
CBD sellers, however, must be careful about how they market their products.
While there is anecdotal evidence that CBD products can provide some benefits, the U.S. Food and Drug Administration is still working on regulations for CBD products, and CBD sellers cannot legally market their products as dietary supplements or with unproven medical claims. Some expect the industry to grow once the FDA comes out with more regulations.
Testing
THC testing remains a major concern for farmers and educators alike. Ohio State researchers began growing hemp in August, far later than the normal planting season, after Ohio legalized the crop in July. They used plasticulture systems in three field locations in London, Willard and Wooster.
They found that THC levels could vary drastically within fields, and that higher CBD levels, which are desirable for the CBD market, seem to correlate with higher THC levels, which can result in a crop being legally classified as marijuana if it exceeds the 0.3% limit. They also found that weather conditions seemed to affect THC levels.
Schluttenhofer suggested that farmers test their crops throughout the year, instead of waiting to check the levels until the ODA-required sampling and testing 15 days prior to harvest.
“Monitoring the crop is critical, because if you go over that 0.3% limit, then you’re going to have a non-compliant crop and it’s going to have to be destroyed,” he said.
Some organizations, including the American Farm Bureau Federation, are lobbying to raise the THC level limit to 1%. David Miran, the ODA’s hemp program director, said regardless of the limit, keeping crops under the THC level limits will always be a challenge for growers.
“No matter what the limit is, I’m always going to be worried about people going over it,” he said. “People are always going to push that envelope, and therefore there’s always going to be people that test above that limit.”
Legal challenges
The new industry comes with other legal challenges. Peggy Hall, agriculture law specialist with Ohio State, said there are many lawsuits pending related to the hemp industry right now.
“The legal outlook is not great. It’s really a mess out there,” Hall said.
She emphasized the importance of contracts to help minimize legal risks. Experts have advised farmers to set up contracts with companies interested in buying their hemp before they begin planting to ensure that they have a market for their crop.
“We have to have a specially tailored contract for hemp because of the nature of the product that you’re dealing with,” Hall said.
In some states, hemp growers have faced challenges with law enforcement who do not understand the crop and may believe it is marijuana. Miran noted that the department is working with law enforcement to make sure police officers can identify where hemp fields are planted by licensed growers to limit issues for growers.
Insurance
Insurance is another issue for hemp farmers right now. The USDA is offering a pilot crop insurance program for 21 states for hemp in 2020, but Ohio is not on the list. Pennsylvania is, but to be eligible for the program, farmers must have at least one year of experience growing hemp and must have a contract in place to sell their hemp.
“The only insurance policy you’ll have in Ohio this year is growing with plastic,” Ayers said.
The USDA’s Risk Management Agency is also adding coverage for hemp farmers through the Whole-Farm Revenue Protection policy for 2020. Neither program available for 2020, however, covers having hemp with THC levels above the compliance level. The USDA expects to add more insurance options for 2021.
Labor
Hemp can be a labor-intensive crop. While hemp grown for grain or fiber can be harvested using combines, hemp grown for CBD is almost always hand-harvested, Schluttenhofer said. Farmers also need space to dry their crops after harvesting.
Schluttenhofer, and many other speakers at the workshop, advised farmers to start small for the first year.
“I’m not trying to scare anyone off, but I’m also not trying to give anyone an idealistic view of what this crop is,” Schluttenhofer said.
