As the U.S. enters its third year of hemp production nationwide, after decades on the controlled substance list, the U.S. Department of Agriculture’s National Agricultural Statistics Service released its first National Hemp Report Feb. 17. It’s a big step forward for the crop. But some industry groups say it shows the industry is struggling under current regulations.
““This survey, and other similar non-governmental reports, continue to demonstrate a steep decline in hemp production and commodity prices nationwide,” said Jonathan Miller, general counsel for the U.S. Hemp Roundtable, in an emailed statement to Farm and Dairy. “It’s clear, an industry that was once projected to hit more than $20 billion by 2024 continues to suffer from the lack of regulatory framework for CBD products combined with the burdensome testing and THC requirements for growers and processors that create too many industry barriers and complications.”
Report
The hemp report focused on the 2021 growing season. U.S. growers planted about 54,000 acres of hemp in the open in 2021. But they only harvested about 60% of that hemp, or about 33,400 acres. Growers also used 15.6 million square feet under protection for hemp production.
In Ohio, growers planted 280 acres and harvested 180. Pennsylvania farmers planted 350 acres and harvested 310. West Virginia growers planted 65 acres and harvested 43.
There are multiple reasons for that, USDA NASS staff said in a Feb. 17 event discussing the report. THC level limits have been a challenge for growers since they began — the limit is currently 0.3%. Weather in general, and dry conditions in particular, could have contributed. And because it’s a new, or returning, crop in the U.S., there aren’t a lot of advanced genetics and growing practices.
Miller said much of the unharvested hemp acres were due to crops testing over the THC limits. On top of that, he added, compared to industry reports from 2019-2020, the USDA report shows a 50-75% decline in hemp acreage.
Value
The National Hemp Association said while the numbers of acres planted and harvested may seem small compared to other crops, the economic value compared to the acreage shows a lot of potential for hemp. The total value of hemp produced in the U.S. for 2021 was $824 million.
The majority of that value was in the 16,000 acres of floral hemp, or hemp grown for CBD and other metabolites, at $623 million.
According to the 2021 report, growers harvested about 8,200 acres of hemp for grain, valued at nearly $6 million. Growers harvested about 12,600 acres of hemp for fiber, at a value of $41.4 million. They also harvested about 3,500 acres for seed, at a value of $41.5 million.
Future
Floral hemp has been the main focus over these first few years of hemp production nationwide. Miller noted it accounted for about 75% of the value of hemp crops produced last year. But commodity prices for hemp have declined significantly in the last few years, and a lot of that is coming from a lack of regulation for CBD markets, he said.
He urged Congress to pass regulations for CBD products, and better regulations for CBD hemp, on things like THC levels. Some in the industry have been seeking a 1% THC level limit, instead of the current 0.3% limit.
But the National Hemp Association said it is “seeing the tide turning more” to hemp fiber and grain.
“We hear from manufacturers all over the country seeking domestic sources of fiber and grain but without significant investment in fiber processing facilities growth will continue to be slow,” the association said in an emailed statement. The association hopes hemp could still live up to its potential.
“The entire world is looking for sustainable and plant-based solutions to mitigate climate change and we continue to see a very bright future for hemp,” the association said.
The USDA plans to keep doing surveys and reports on hemp production annually, as long as funding is available. In a Feb. 17 release about the report, NASS administrator Hubert Hamer said the results will help both USDA agencies and farmers make decisions about hemp production, and could also influence policy decisions on hemp.
“The release of this landmark report provides a needed benchmark about hemp production to assist producers, regulatory agencies, state governments, processors and other key industry entities,” Hamer said.
