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Hemp: A good economic choice for farmers

(posted 10/31/08)

Hemp Markets Are Growing

Hemp food sales grew by 55% from Dec. 2006 to Dec. 2007, or by $3.4 million, to a total of $9.7 million in '07. The sales data, collected by the market research firm SPINS, was obtained from natural food stores only, excluding Whole Foods Market and mass-market food and pharmacy stores, and thus under-represents actual sales by a factor of two to three. The total hemp foods market is estimated to be $20-30 million.

CanAgriculture, Agri-Food Canada and Statistics Canada data all show that the quantity of hemp seed exports increased 300%, and hemp oil exports increased 85% from 2006 to 2007.

The data on annual retail sales of hemp food compiled by Leson & Associates shows a 50% increase, from an estimated $8 million during the 12-month reference period in 2003/04 to almost $12 million in 2004/05. During the same period, retail sales of hemp body care products grew by 15% from $35 million to about $40 million. Market wide data on the much larger sales of hemp fiber-based products such as clothing, paper and auto parts was not part of this new research.

U.S. Retail Hemp Sales Are Estimated At $300 Million/year

It is unfair that trucks full of Canadian hemp can deliver industrial hemp to American markets, while American farmers miss out on this $300 million market.

Hemp Is Being Used In Millions Of Cars In North America.

Industrial hemp is used in the natural fiber composites that have rapidly replaced fiberglass as the material of choice for vehicle interiors. Hemp hurds, the interior woody core of the hemp stalk surrounded by the fiber, is over 50% cellulose, the building block of paper, plastics, and bio-composites. European plants are making hemp auto panels that are biodegradable, half the weight, more durable, and safer than fiberglass counterparts. At least three million cars in North America already have hemp-based components in them.

Canadian Hemp Cultivation Continues To Grow

Hemp cultivation exceeds 50,000 acres in Canada, compared to 24,000 acres in 2005, 4,000 acres in 2002. Europe hemp cultivation is now estimated at 40,000 acres.

Canadian Farmers Reporting Net Profits Of $200 - $250 Per Acre

Saskatchewan Hemp Association holds that the hemp market is vulnerable to price fluctuations dependent in part on supply. Successful hemp farmers in Saskatchewan have emphasized quality, and created enduring relationships with buyers. In 2005 production was contracted at $0.45/ib for conventional, and $0.85/lb for certified organic hemp seed. A good yield is about 800-900 lbs an acre, but average yields of 500-600 lbs. are more common.
      .85 x 900 = $765/acre is the top end.
      .45 x 500 = $225/acre as the low end.

According to Shaun Crew of Hemp Oil Canada and Mike Fata of Manitoba Harvest, in 2004 the average yield was 750-900 ibs of seed per acre.
      45 lbs of seed are needed to produce 1 gallon of oil.
      750 lb = 16.6 gallons. 900 ib = 20 gallons.
The average price of hemp oil was $40/gallon in 2004.
      16.6 x $40 = $664/acre.
      20 x $40 = $800/acre.
The production costs per acre were estimated at $200 per acre. Thus profits would average between $434-600/acre. Add to this whatever a producer can get for the hemp stalks.

Yield Expectations
Hemp grain yields over the years have been variable. Yields in Canada have been reported from 100 to 1,100 pounds per acre. New growers should expect 300-400 lbs/acre grain yield (clean, dry basis), while the experienced farmer using the best of current varieties could be in excess of 600 lbs/acre (clean, dry basis). Check out mmpp.com for yearly yield data from Canada (source Health Canada).

Hemp Is The Ultimate Green Crop
Hemp is the ideal green cop because it can produce food, fiber, pulp, and cellulose for thousand of industries without using toxic pesticides, herbicides, fungicides or even fertilizer if grown in a proper crop rotation. Hemp amazingly doesnÕt need toxic chemicals in its processing either. Because it doesnÕt require toxic crop chemicals it lends itself to the explosion of organic food market, and the organic clothing markets.

Hemp Is Tops In Cellulosic Biomass
In Montana, and in the Midwest, agricultural hemp would produce the most cellulosic biomass of any plant, which would make farmers the most possible money per acre. Cellulose is the building blocks of paper, plastics, and bio-composites (auto panels). Biomass is plant matter. The more plant matter a crop produces per acre, the more money the farmer gets. The higher that biomass is in cellulose, the more money the farmer generates.

Hemp Farming Would Build Up New Green Montana Industries
HempÕs biomass is very bulky and requires that processing and manufacturing facilities be within a 200-500 mile radius to be cost effective. This would create several green local and regional transportation, processing, and manufacturing facilities that would be built up around the reemergence of agricultural hemp.

Hemp Is The Ideal Crop For The 21st Century
Hemp farming is ideal because it distributes money from the bottom up starting with the farmer, who stands to make much more money if hemp were legal. Next in line are the local and regional transportation, processing, and manufacturing industries that would be created if hemp were legal. Hemp farming could help bridge the gap between the rich and the poor and make the American farming industry viable again, and all without harming the environment.

There Are Thousands of American Hemp Companies Already
American and Montanan hemp businesses could greatly benefit from state/U.S. grown hemp. In Montana there are several businesses that sell hemp, many are sponsors of the Missoula hempfest, including: The Kettle House, Authentic Creations, The Good Food Store, etc. The hemp industry is clearly ready to expand. It is fast becoming a part of a brighter tomorrow.

Huge Corporations Want Hemp
Interface, Inc., a $1.2 billion carpet business, has researched and tested hemp as a fabric for its carpets, and wants to use domestically-cultivated industrial hemp in its productions.

 

   

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