Ask Our Experts: Is There Still Demand for Hemp?
Q: I am planning on growing hemp this season; is there still a demand for it?
By New Frontier Data
A: Given accounts of difficulties, a newcomer to the hemp industry might be forgiven for some pessimism. Falling prices, a shortage of hemp processors, and a glut of biomass are some of the real challenges facing current and prospective operators in the space. Realizing that, it is likewise important to remain circumspect about conditions and opportunities alike.
Certainly, the market is experiencing some growing pains. Nevertheless, the market remains
The lack of hemp processors is understandable, given that the crop had been federally illegal for most of 80 years prior to passage of the 2018 Farm Bill. As the market is established and expands, processors will appear to fill the void and then the various needs within the marketplace, and excess biomass will be eliminated through adjustments.
Hemp prices are falling not because of lack of demand, but rather more due to an imbalance in the proportionality of U.S. hemp grown for CBD: In 2019, 92% of cultivation in Kentucky was dedicated for CBD, even though that market, too, has been characterized by uncertainty and frustration.
For those who can survive current saturation in the CBD market, opportunities will remain and arise for those farmers pursuing strategies focusing on the fiber, seed, and grain markets. There is strength in diversity and patience, despite fated frustration for any who hoped instead to reap absurd profits margins and get rich quickly.