To grow hemp, or not to grow hemp? That is the question. The Texas Hemp Growers Association sponsored a seminar at the recent Amarillo Farm Show where experts gave producers enough information to try to help them determine the answer to this question.
Dion Oaks, co-owner of Wright-Oaks LLC near Del Norte, Colorado, started growing hemp on his operation six years ago. They began with a few hundred plants, growing them indoors. The next year they went to 30 acres, then 300 acres, then 600 acres and this year they planted 2,500 acres. Oaks says they grow industrial hemp for cannabidiol or CBD, grain and fiber. Other than hemp, they grow potatoes, wheat, alfalfa and barley.
“We swath everything and take off the top of the industrial hemp, if we’re going for strictly grain,” he said.”
Oaks says his operation is getting more into no-till with their hemp. He says the main reason he decided to go into growing hemp was for water savings, but hemp also provides soil health benefits for the other crops they produce. For instance, with the potato and corn crops, nematodes are often a challenge, but hemp alleviates a lot of this pest problem.
Oaks says in the last four to five months the CBD market has dropped dramatically for multiple reasons. He says it has declined 70 to 80% since April.
However, the hemp industry is ever changing and new developments will improve the success of the crop. Hemp crop insurance will be available next season, but the Farm Service Agency wants to learn more about it so administrators can create programs to help farmers. It is also important to remember crop insurance will not cover a crop with high Tetrahydrocannabinol, or THC. Additionally, Oaks says the American Bankers Association recently sent out a notice to all Federal Deposit Insurance Corp. banks telling them to start treating hemp as a regular agricultural crop.
What is this cannabis stuff everyone is talking about?
There are two different types of hemp. CBD hemp, which is in the pharmaceutical products sold on just about every corner these days, and then there is industrial hemp, used for paper, textiles, fuel and biodegradable plastics.
“CBD oil is made from the flower and the trichomes,” Oaks said. “Hemp can be very brittle and difficult to harvest while keeping the combs intact.”
Corbett Hefner, vice president of research and development for Formations Ag, says keeping the trichomes unharmed is one of the drivers for the designs of the equipment his company develops. He says in some cases producers can lose between 50 and 90% of their crop at harvest due to equipment that destroys the trichomes.
If you intend to grow for CBD, buying the proper equipment is key to success with this crop. There are multiple ways to harvest, including combines, whole plant harvesters and balers.
For industrial hemp, the grain is the seed that is produced inside the flower material after it has been pollinated.
“With industrial hemp, you are looking at the grain, fiber and flower and it could possibly be a dual or tri-crop,” Oaks explained.
The fiber and hurd, or the inner woody cored of hemp, is a secondary part of the industry and the market needs more time to develop. Once hurd is mixed with lime and water it becomes fire resistant and great for insulation. It can also be used in bedding, plastics, biochar and loss circulation material.
“The woody material of hemp is very versatile as far as temperature, durability and ability to maintain strength under harsh environmental conditions,” said Calvin Trostle, professor and Extension specialist at Texas A&M University. “That’s one reason why it’s valuable for so many products.”
Trostle said he has heard a lot of people comparing the hemp craze to the emu market in the 1990s, however he says there is a key difference between them.
“My assertion is that hemp, CBD or other cannabinoids, grain and fiber each have inherent value in a way that emu meat and oil never achieved.”
One myth Trostle says is a common misconception is hemp’s water usage. He said he keeps hearing that hemp uses one half the amount of water that cotton uses, but in reality he believes it will require more moisture. Another comparison he had been given from a hemp producer is that hemp could be grown on about 40% less water than corn.
“If you’re growing for CBD or you have such a high investment in that crop, I do not foresee any dryland production in the Texas High Plains,” Trostle said. “In fact, I think the combination of rainfall during the cropping season and acclimated soil moisture need to be at least 15 inches if you are going to go without irrigation. The bottom line is you cannot start a crop into profitability, so prospective producers must take water requirements into account.”
However, he believes hemp fiber production on dry land in West Texas might be a viable opportunity. Trostle also views hemp as a reasonable rotation crop. Most of the established producers he has talked to in the Texas High Plains see one to two years of possibility of CBD production, but their interest long-term is fiber.
The right seed at the right price is crucial
Where to buy seed is one of the biggest dilemmas in the hemp industry. Oaks says there are a lot of lawsuits right now relating to seed quality and seed type. The pricing is all over the place and can make a big difference when the plant is harvested and sold. Growers must decide what kind of hemp they want to grow and properly vet the seed source to protect their investment.
“Genetics for a grain or fiber crop are totally different from a CBD crop,” Oaks said. “There are seed genetics that overlap between the two types of hemp, but for the most parts, if you’re looking at CBD percent, fiber quality or seed yield per acres, there are a lot genetics to pay attention to and decide which avenue you want to take.”
Similarly to watermelon, hemp has both male and female plants.
“A strong majority of people assume you need a zero tolerance policy to any male plants in the field for CBD production, although they say for fiber it does not matter,” said Trostle. “The standard thinking is if you have males in the field, it makes pollen available so seeds develop and it will reduce CBD levels and that crop will produce less high quality material for CBD extraction.”
Trostle says there is feminized seed available for purchase that will produce almost all female seeds.
“Feminized seed can be $1 per seed, and imagine planting 1,500 of those per acre. Ever had any cotton or corn seed cost about $1,500 per acre? Of course not. That might be one of the first things to consider about hemp.”
However, Oaks says his operation grows male and female plants together in the same field for CBD.
“We’re looking for anywhere from six to eight CBD percentage—so we’re not going for super high grade,” he said. “That also cuts down the risk because high CBD genetics are on a really tight curve with the 0.3% THC that you’re allowed legally. Having a higher CBD percent means a higher THC percentage.”
Trostle says if the THC percentage is above that level, the crop will be treated like marijuana and will have to be disposed of.
Plan before you plant
“The first thing to do with harvesting is start planning right now,” Hefner said. “You cannot believe the number of people who will call right before harvest and say I’ve got 1,000 acres. What do I do with it?”
Facilities that will take harvested hemp are limited in the states it is legal in, so always have a destination for the crop prior to planting. Trostle says let the buyers available to you determine the type and quality of hemp you decide to grow.
“It’s not a crop you can grow and just take to the elevator once harvested,” Oaks added. “You really have to decide what you’re growing for and find a buyer. Be careful with buyers, question their intentions and always read the fine print.”
Hefner says harvested hemp is quite bulky because it is light, so producers have to have a lot of space to store it. He says in some climates producers are able to field dry hemp, but there are risks such as excessive moisture after cutting, which could lead to a mold problem. Some growers air dry in facilities by hanging plants from cables. However, Hefner warns it takes roughly 44,000 cubic feet to hang dry an acre. He says hemp can be dried on the ground with air flown underneath it, but it takes about 18,000 cubic feet.
“You have almost exactly two hours to get some kind of air under the crop before it will start to get hot,” Hefner cautioned.
Trostle wants perspective growers to be realistic about yields.
“Anything that we grow, we do not shoot for maximum yield,” he said. “There are very rare instances where that might be possible, but maximum yield is not maximum economic profitability. Input costs are just too high to produce maximum yield.”
According to Trostle, one Colorado farmer says his costs are about $13,000 an acre. The United States Department of Agriculture reported an average farmer spends about $19,000 an acre. However, costs should come down with economies of scale.
“Don’t risk more than you can plow under,” Oaks explained.
The take away is hemp can be a successful crop if farmers plan ahead, are cautious of who they do business with, go into it with reasonable expectations and do not bet the farm on incredible yields.
“This is a chance for you to be an entrepreneur, create demand for a product and really help your bottom line,” Hefner said. “You can be as creative as you want and the opportunities here are endless. The advocates will tell you there is 25,000 uses for it and there’s ways to make money in this thing whether it’s small scale or large scale.”