Thread: Industrial Hemp
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Old August 28, 2018   #11
PureHarvest
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Originally Posted by nbardo View Post
What can an acre of hemp yield? How much does it cost to produce? How much can a farmer sell it for, per acre, at current market rates? What is the total annual global production of hemp? I have heard all the miraculous claims about its beneficial properties but i have never heard these kinds of economic questions asked. If farmers could be making a lot of money growing and selling hemp, it would be more common. If there was an economic engine driving this thing it would have been made legal years ago. It seems very niche.


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It was not made legal years ago because it would be disruptive to many established markets for fiber, seed oil, animal feed, build materials, human-food grade proteins....
These large corporate gatekeepers are not gonna just let something come in and create competition when there is a convenient, albeit dumb, law in place that protects their space.
As far as economics, in June, it was reported that total sales in the US of hemp products totaled 700 MILLION.
The global market for hemp consists of more than 25,000 products in nine submarkets:
agriculture, textiles, recycling, automotive, furniture, food and beverages, paper, construction
materials, and personal care.
Raw material imports were about 67 million dollars in 2018.
What is the hurdle keeping it nich-like?: Current challenges facing the industry include the need to reestablish agricultural supply chains, breed varieties with modern attributes, upgrade harvesting
equipment, modernize processing and manufacturing, and identify new market opportunities.
Currently, the interstate commerce rules are creating a problem with producers that want to sell seed or protein meal across state lines.
Producers can grow it in approved states, but there needs to be seed dealers, feed processors/pressers, grain handling and storage etc. The companies that can do this are hesitant to invest in the infrastructure because the don't know where they can send and receive until the federal law allows free movement of raw feedstock of seed and fiber, and the movement of finished product.
Without this, farmers are reluctant to grow it if there is no market. Thus we have a vicious catch 22 to get the industry going, hence the push in the 2018 Farm Bill to re-classify hemp as a non-drug so that it will bust open the market.
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