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Hemp industry doesn’t come without risks

The hemp industry presents opportunities for farmers, but an analyst says it doesn’t come without some risks. 

Rabobank’s Steve Nicholson says the industry is untested.  “You don’t have any herbicides and you don’t have any insecticides,” he says. 

And, he says, there are also price risks.  “So far there is no interstate transport allowed,” he says.  “Which might change if the regulatory structure gets put in place.  There is no crop insurance for it.  There is no commodity program for it because we don’t have any information about the price structure.”

Grain and fiber production have income generating potential.  But the big money maker is the CBD, which legally must have a THC level below 0.3%.  “In some of the research that has been done, that content can change,” he says.  “For whatever reason, by the time you get to harvest that THC could be above the level could be above where it needs to be and the whole crop needs to be scrapped because it’s not legal anymore.”

The USDA plans to release its new rules for hemp production this fall, but the new regulations will not go into effect until the 2020 planting season. 

Hemp crops grown or processed during 2019 are required to operate within the state pilot programs authorized by the 2014 Farm Bill.  The Farm Credit Administration is expected to issue guidance to Farm Credit System members on making loans to hemp producers next week.

AUDIO: Steve Nicholson, grain and oilseed analyst, Rabobank