Hemp Farming Profit
With the U.S. hemp industry still in its early stages of growth, farmers across the nation are wondering, “What is the potential for hemp farming profit?” It’s a fair question, and a look at historical and global trends may offer answers.
In the United States, hemp was a top cash crop for 150 years before it was banned over fears regarding marijuana use. Now, with legislation loosening restrictions on hemp cultivation, more farmers are turning to this hardy plant as a profit maker.
The retail market for hemp in the U.S. is approximately $600 million and expected to increase year over year. Globally, the market for CBD (the medically active ingredient in hemp) tops $33 billion per year. And with industrial hemp used in 30,000 products worldwide, demand is strong. But what does this mean for farmers who want a slice of the profits for hemp farming?
Hemp Profit per Acre Can Be Substantial
Industrial hemp can be cultivated for seed, fiber, or pharmaceuticals (CBD oil). Seed and CBD command a much higher price than fiber. But all forms of hemp have good potential as cash crops for national use as well as export.
What are the numbers? To put things in perspective, commodities like wheat and soy may yield only $40-80 per acre. In contrast, farmers in Canada have been earning $250-300 per acre for hemp crops. U.S. farmers hope to do the same—or better. Some growers speculate that U.S. hemp could generate $1,800 per acre in revenue.
Such a s steep rise in hemp farm profit could be caused by:
- Increased market demand for industrial hemp
- Development of more productive cultivars
- Scaling and refinement of agricultural processes for hemp
- Continued research showing additional health benefits of CBD oil
Even as things stand now, hemp can be a serious money maker for farmers who are willing to learn the ins and outs of cultivating this cash crop.
Why Is It Easy Growing Hemp for Profit?
Hemp has many characteristics that make it an ideal cash crop. Here several reasons farmers get excited about the potential of industrial hemp.
- It grows fast. The cycle from seed to harvest is only about 120 days. This means hemp can be planted before or after the growing season for other crops, allowing farmers to reap an additional cash crop from the same acreage.
- It is hardy. Hemp can be grown virtually anywhere in the United States. At some point, agricultural experts will determine the “ideal” growing conditions for hemp. But in the meantime, farmers are finding that it thrives in a variety of soil conditions. It can even be used to help restore depleted soils.
- It has few natural enemies. Biological pests that plague other crops tend to leave hemp alone, reducing the need to use pesticides. Hemp’s fast-growing nature also means it crowds out weeds. In the first six weeks of growth, hemp plants develop into a thick canopy of leaves that shade the ground, discouraging intrusion by unwanted plant species. This means herbicide and pesticide savings are substantial compared to other crops.
Factors That Can Negatively Impact Hemp Growing Profit
There are many mistakes that can lower the profitability of a hemp crop. From seed quality to product storage and transportation, farmers can’t afford to cut corners. In particular, the market for hemp-derived CBD favors quality over quantity.
There’s also a learning curve that goes along with any new endeavor. For example, labor costs can be high depending on how the plants are tended and harvested. Farmers are wise to reach out to experienced growers and organizations that promote hemp agriculture for insight into proper cultivation methods. Educational institutions like Cornell University provide hemp growing resources that can help.
Farmers who let their hemp grow too long won’t profit at all. As the THC content builds up in the growing plants, they may become “hot” and get classified as marijuana. The difference between legal and illegal is tiny. Products that contain more than 0.3% of THC (the active component in cannabis) can’t be sold as hemp. That means instead of selling their product, growers must pay to have it incinerated.
Hemp Farming Profits Depend on the Marketplace
Not having a place to sell the hemp is another critical issue for farmers. Until hemp becomes established as a publicly traded commodity, farmers must sell their crops privately. Growers face a real challenge with not being able to get their product tested and sold in a timely manner. The longer they must store the crop before sale, the lower the profit. And if they can’t find a legitimate buyer at all, hemp farming profit drops to zero.
HempTech is dedicated to solving the hemp marketplace problem by providing a secure, reliable network of validated buyers and sellers to facilitate hemp transactions. Our goal is for every American hemp farmer growing a quality product to reap the rewards of their hemp farming profit.