As Hype for Hemp Winds Down, World Ag Expo Gears Up for New Season
By Eric Singular, Director, Hemp Business Journal
In an optimistic harbinger of regaining some measure of pre-pandemic normalcy, more than 100,000 attendees gathered outdoors last week in Tulare, CA, for the 55th annual World Ag Expo. Billed as the largest event of its kind, the event drew more than 1,450 exhibitors spread out across some 2.6 million sq. ft. of exhibition space featuring vendors of innovative agricultural technology and farm equipment.
In 2020, the event hosted its first-ever hemp pavilion in 9,400-sq.-ft. tent housing 30 exhibitors and a seminar stage dedicated to promoting the potential of the newly legalized cash crop. Back then, hopes ran high for CBD and cannabinoid extraction, which were prominently featured through both the event’s programming and show floor. Such enthusiasm and interest were soon dashed, however, as the CBD market quickly careened toward a crash after U.S. hemp growers had massively overproduced hemp for cannabinoid extraction by cultivating more than 511,442 licensed acres in 2019.
This year, CBD was basically treated like a four-letter word. Hemp’s representation at the show centered almost exclusively on the plant’s myriad industrial uses, particularly as a versatile renewable fiber, and through some revolutionary hurd applications. As Jessa Hughes, a plant breeder for Verve Seed Solutions noted, “there was a notable shift for hemp at this year’s expo, as most interest concerned grain and fiber due to the current volatility in the cannabinoid market.”
Though the consensus among most attendees seemed to be agreement that the hype for hemp has cooled since 2020, they asserted that if the price is right, hemp grain’s high protein and omega content would hold their interest along with the advantages of animal bedding made from hemp hurd. Unfortunately, for the price point to land in the range which the operators seek, it would require economies of scale mandating an exponential increase in hemp production.
Prospects for that are unlikely. According to the Golden State’s Department of Food and Agriculture, the number of registrants for hemp cultivation has fallen year-over-year, with an 84% decline in total hemp acreage since 2019. One reason for it is the high cost of farmland in California’s central valley, where growers tend to plant specialty crops (e.g., stone fruits, tree nuts, or grapes) which command a much higher premium than do row crops like corn, wheat, or soy.
Far cheaper real estate is why hemp production is soaring in America’s breadbasket – farmland in Midwestern states is seeing hemp thriving as an effective new rotational crop among staples with the upshot of providing a potentially regenerative impact on soil health.
Also hampering California’s hemp industry are regulations quite a bit more burdensome than in other states. Some municipalities have even placed moratoriums on hemp production, a move criticized as too drastic a measure to protect growers of all-female cannabis crops from any risk of pollen being spread by production of industrial hemp’s male plants. Perhaps a more practical concern is that a hemp cultivation permit in California costs $900 while limiting a producer to 160 acres, whereas a competitor in North Dakota is only charged $350 with no acreage limit.
Overall, spirits were high among hemp exhibitors looking forward to this year’s growing season. An interactive outdoor display showcased methods for decorticating baled hemp fiber, alongside a host of material applications for drywall, animal bedding, bioplastics, insulation, and concrete to illustrate the far-ranging uses for hemp beyond therapeutic or wellness products.
Some observations from exhibitors and stakeholders in attendance summarized the status of the industry and supply chain for U.S. hemp fiber and grain:
- “While there are still several companies trying to develop working equipment, most of them are lacking when it comes to producing good-quality long fiber. It has taken us six years to be able to produce textile quality fiber at Formation Ag. Now, we just need to get enough systems in the field to start to make a difference.”
— Randy Wright, VP of Sales, Formation-Ag
- “The majority of the hemp vendors and visitors were focused on grain & fiber, which is not surprising after the 2019 cannabinoid glut… We know there are thousands of uses, but until we innovate and create, there will not be enough demand. The more end-use applications, the greater the need for processors, and with more processing, the greater the need for farming at scale. Farmers should start small and grow different grain and fiber varietals now to learn how hemp performs in their fields, so that when it is time for large acreage, they will have a greater chance for success.”
— Drew Kitt, Director of Business Development, International Hemp Exchange
- “The biggest hurdle to fiber adoption is processing infrastructure. I’m happy to be partnered with UK-based Tatham, which offers a 4-ton per hour system compatible with round and square bales. There is room for a lot of different scaling, but I’ve concluded that ‘industrial scale’ means 2-ton an hour or more is where the numbers really start to work, and end-use customers get interested in the volumes they need to switch feedstocks… Significant adoption requires significant scale. I don’t think people realize the sheer volume of material that is required to maintain price points: A two-ton per hour system would require about 1,500 acres per year, per eight-hour shift to maintain capacity. It is critical to understand these dynamics to help justify the capex for industrial scale systems. This literally requires millions of dollars for each modest scale center.”
— Patrick Flaherty, Mechanical Engineer and Founder, PFDesignLab
- “California offers a unique vantage into the world of high-value agricultural production, especially given the diversity of crops grown in the state using specialized modern equipment… A Builders Group interested in hemp products is likely what’s needed in California for hemp to see wider adoption in the state… AOSCA Certified seed for fiber and grain crops is available with many varieties suitable to the Central and Northern valleys, which is exactly what the industry needs to get the bankers behind hemp.”
— Terry Moran, VP of Operations & Production, International Hemp
Photos from the event: