Is There Profit in Farming Hemp? Here’s What You Need to Know Before Planting
With the passing of the 2019 Farm Bill, there has been a lot of interest in making money by farming CBD (cannabidiol) hemp. Here’s a new study that offers some guidance on what to expect, and what you need to know before planting hemp.
Hemp comes from non-drug varieties of Cannabis sativa and is viewed as a valuable source of food, fiber, and medicine. What differentiates whether a Cannabis sativa plant is categorized as hemp or marijuana is the level of tetrahydrocannabinol (THC) it contains. Oil extracted from the seeds of hemp is well known for its medicinal properties. For most purposes, the non-drug variety is typically referred to as “CBD hemp” when discussing it regarding farming of the crop.
A news release from the University of Connecticut states that a first-of-its-kind new report from UConn’s Zwick Center for Food and Resource Policy and Department of Agricultural and Resource Economics, reveals some relevant needed information educating prospective hemp farmers on what they need to know before planning hemp as a sustainable crop. Primarily, is it profitable?
“Hemp cultivation has been prohibited for so long and as a result there has been limited research and information on it,” says Jeremy Jelliffe, a researcher in the Department of Agricultural and Resource Economics in the College of Agriculture, who is the lead author of the study. “Since Connecticut approved the pilot program so growers could start growing in 2019, there was a call for additional information.”
The focus of the study is on the economic viability of CBD hemp farming that includes the cost of starting this type of business from scratch; the cost of actually cultivating the crop using good farming management practices; and, how much variation a farmer can expect in potential returns once his product is ready for the market.
“What we present is a little different than what I would think of as typical growing practices right now, but what we expect to become more widely adopted. Some practices we present include using plasticulture, drip irrigation, fencing, things that not everyone did (in the 2019 growing season), but after the first season I think more people will be inclined to do,” says Jelliffe .
Farming Hemp is Hard Work
For example, the new hemp farmer will discover that planting and growing hemp is much more involved than simply ploughing rows, planting seed, watering the growth and waiting for the dough to roll-in following harvesting. There are many steps toward creating a successful harvest such as:
1. Growing your own seedlings or buying them.
2. Soil testing and preparation.
3. Transplanting seedlings followed by post-transplantation irrigation and fertilization.
4. Rouging—Male and hermaphroditic plant removal from the field prior to the release of pollen.
5. Pre-harvest testing for CBD and d9-THC concentration.
6. Labor intensive harvesting that includes chopping, drying, de-budding and field cleanup.
What the Report’s Numbers Reveal about Hemp Farming
Basically, farming hemp can be profitable. The report states that a representative farm of 10 acres that yields 2,500 pounds of dry flower with 6.5% CBD, yields:
• A total cost per acre of $19,289 or $7.72 per pound of dried hemp flower. About two- thirds of the total cost per acre ($12,719) is variable, meaning that it changes with the level of production, and one-third of it ($6,570) is fixed.
• At the prevailing local price of $1.50 and 6.5% CBD, total revenues are $24,375 per acre, leading to $5,086 in profits per acre, or $11,656 per acre net return over variable costs.
However, the report also tells us that the future profitability of CBD hemp production will depend on individual technical abilities of farmers (dry flower yield and CBD content of crop) as well as external market forces, predominately CBD prices—that may and will likely change, especially as interest in farming hemp is expected to grow significantly.
“We are estimating that the local price will continue to drop this year with the large supply that is out there, and best case, we will see a price of one dollar and twenty-five cents per pound, per percentage of CBD, per acre,” says Jelliffe.
“The ones who make the most money are the ones who can do it most efficiently, produce the best quality, and market it at a premium. Farmers know that is how it works no matter what the crop is and they are all trying to produce the best they can. They balance this with the price they expect to be able to get.”
For information about hemp and health, here are Your Most Burning Questions About Hemp Benefits.
If you have grown hemp and have any advice for others on the work it takes, please respond below so that we may share your experiences with growing hemp.
Timothy Boyer has a Ph.D. in Molecular and Cellular Biology from the University of Arizona. For 20+ years he has been employed as a freelance health and science writer. Today, with a background in farming and an avid home gardener, Timothy continues writing about science with a focus on the connection between plant biology and gardening for healthy living. For continual updates about plants and health, you can also follow Timothy on Twitter at TimBoyerWrites.
Image Source: Courtesy of Pixabay
1. “The Numbers on Connecticut’s Newest Crop: Hemp” Elaina Hancock - UConn Today, April 2, 2020.
2. “CBD Hemp Production Costs and Returns for Connecticut Farmers in 2020” Jeremy Jelliffe, Rigoberto A. Lopez, and Shuresh Ghimire; Zwick Center Outreach Report No. 66, College of Agriculture, Health and Natural Resources at the University of Connecticut;
3. Fact Sheet: “CBD Hemp Production Costs & Returns for Connecticut Farmers in 2020”; Fact Sheet 1, Summary of Outreach Report No. 66, February 2020; Jeremy Jelliffe, Rigoberto A. Lopez, & Shuresh Ghimire Zwick Center for Food and Resource Policy.
4. U.S. Domestic Hemp Production Program (2018 Farm Bill)