PORTLAND, Ore. (KOIN) — Two-thirds of hemp growers in the U.S. may not have a buyer lined up for their product, which could leave more than a billion dollars worth of biomass without a home at the end of the harvest season.
That’s one of the early findings of a nationwide survey conducted by local economist Beau Whitney. The survey officially closes Friday and was sent to every licensed hemp grower in the country. Whitney tells KOIN 6 News the data received so far has been “fascinating.”
“Oregon has roughly 60,000 acres licensed for hemp production this year, and if that’s fully utilized then that would be 120 million pounds of biomass alone and based upon market prices right now, that would be over a $2 billion crop,” Whitney said. “Now, that would be the largest agricultural sector in Oregon. So, it’s gone from very low volume to very high volume very quickly, but there’s risk associated with that.”
Adding to concerns of oversaturation, Whitney said there are hiccups in the supply chain.
“There’s not enough drying capacity for the hemp once it’s harvested, there’s not enough processing capacity to convert the biomass into CBD oil,” he said. “And because there’s those little hiccups to the supply chain, there’s a lot of risks to that supply and to me that means risks to farmers and farmers well being.”
Another challenge facing growers and processors: banking.
“Right now, even though there’s been policy indicators that say, ‘Hey this is a legal crop, it’s an agriculturally viable crop,’ bankers are still stigmatizing hemp similar to the way that they have with cannabis at a higher THC level,” Whitney said. Lawmakers, including both of Oregon’s senators, are pushing legislation that would change that, but there’s no telling if and when that will pass.
It’s not all doom and gloom, though.
“I think the market in Oregon for industrial hemp is very very robust. Because I have met a lot of folks that are trying to take the fibers and do something with that,” Whitney said. “Some say that there’s 50,000 applications for industrial hemp, from fiber to plastics. BMW uses it in their car manufacturing. So does Subaru. There’s hempcrete that’s used in construction.”
Nationally, hemp is poised to have a huge impact on the marketplace.
“If all of the biomass in the United States is realized and sold into the system, it would be 10% of all of the cash crops sold in the United States,” Whitney said. “That’s $195 billion total market. Hemp could be $20-40 billion of that so it would be on par or slightly less than corn, wheat, or soy. So a lot of farmers right now across the United States are talking how hemp is the fourth crop, the fourth big crop.”
Whitney expects to publish his official report in mid-September. KOIN 6 will report on all the findings when it is available.
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