What’s the benefit of growing hemp? Farmers may question why to switch over their crop to something so newly legalized. But, statistics are showing that it’s quite often a lucrative choice. Here’s the scoop on hemp profitability.
The expansion of hemp crops
According to a recent study from the Brightfield Group, farmers can increase their profits by growing hemp. This idea is already catching on. Data shows that farmers began rapidly expanding into the hemp market as soon as the 2018 farm bill legalized the industry. Some 285,000 acres of industrial hemp were planted in the United States in 2019. That’s more than triple the 78,000 acres planted in 2018.
The majority of the hemp grown in the United States, about 87 percent, gets processed into CBD. This cannabis compound has a host of pharmaceutical benefits.
Hemp profitability beats out low commodity crops
Brightfield attributes the increase in hemp acreage to farmers seeking a hedge against low commodity prices for corn and dairy. Another motivation is the desire to increase profits so that family farms survive for the next generation to inherit.
And, the profits are already considerable. Brightfield calculated a single acre of hemp could bring in more than $40,000 in revenue. This is huge when compared to the average $1,000 per acre for corn.
Hemp profits don’t stop after harvesting
The real value for hemp farmers is to take their crop all the way through processing and extraction to have a final product to sell. Having a quality compound to deliver to a manufacturer makes hemp even more valuable than in its crudest form.
For example, if a farmer has between 1,500-2,000 plants in an acre, and each plant produces around one pound of flower, then a single acre of hemp can yield between 15-50 kilograms of CBD. Based on 2019 market prices, the average revenue for this yield could be anywhere from $30,000 to $50,000.
Growth isn’t stopping anytime soon
The United States is the global leader in hemp production. Currently, there are about one million total acres planted. China and Canada aren’t far behind. This information is already telling that hemp is taking precedence for many farmers.
Brightfield Group projects that the hemp industry will grow 75 percent each year through 2023, reaching 2.7 million acres. At this point, the CBD market could reach $20 billion as well.
New products may take center stage
With this growth, a more diversified portfolio of products will emerge. We’re already seeing increased demand for CBG, CBN, and CBC. As more products develop, farmers may shift the purpose for their hemp crop, allowing them to fit more plants in a single acre, and use different best practices.
Hemp profitability always brings concern about supply. Investing as a hemp farmer requires a demand for a domestic product. If manufacturers start going elsewhere for hemp, local farmers can run into issues, but projections for the future look good. Brightfield research shows that domestic hemp quantities will keep up with demand. Manufacturers can then avoid a reliance on imports. This means more profit for local farmers.
Supporting hemp farmer success
For Alabama farmers looking to transition to hemp, Arbor Vita8 is a great partner. From seed to sale, we offer a full assortment of services and support to guide you through the entire hemp processes. Our mission is to help you find the greatest success with superior facilities and knowledge. Contact us today to learn more.