In 2019, droves of farmers got into the hemp game with the hopes of huge profits.
Now, many of those farmers are pulling out.
What has happened in the hemp industry is a classic case of managing expectations for a new, rapidly growing market.
Mass overproduction in 2019 caused two major problems for hemp farmers: cheap wholesale prices, and unsold harvests.
There’s no doubt about it: the hemp industry is a risky business for farmers who aren’t vertically integrated. The fact is, costs are too high for many to proceed with confidence.
Combine challenging market conditions with a fickle plant, and the result is what we’re seeing right now: a contraction of hemp acreage in key states and licensed producers shying away from the crop.
Take Montana as an example. In Hemp Benchmark’s May Report, they noted that the state’s licensed acreage was poised to decrease dramatically in 2020.
The main culprit?
A volatile CBD market.
You see, the value of cannabidiol was initially based on small-scale production coming from cannabis growers…
So when the CBD boom took off a couple of years ago, many of the farmers were basing their sales projections off of a product that had never been farmed on a mass scale.
That all changed when the U.S. Farm Bill allowed farmers to start farming hemp for CBD.
And it wasn’t just the United States that raced to cash in on cannabidiol. Both Canada and Europe began repositioning their already established industrial hemp markets, switching the focus from fiber and grain to hemp for CBD.
With so many people rushing into the game, an overcrowded marketplace skyrocketed the first-ever CBD surplus. Suddenly, the world’s most valuable cash crop simply wasn’t worth the return on investment for farmers.
And 2020 hemp projections come with even more uncertainty, due to COVID-19’s impact and unstable regulations. Many farmers who rushed into the industry have already become jaded about its potential.
Savvy hemp farmers are staying in the game. They’re simply taking a more cautious approach this time around.
Hemp Projections for 2020: How Farmers Are Reapproaching Their Fields
Many are plotting smaller acres and testing multiple strains to see which yields the most potent crop.
And for every hemp farmer who’s pulling out, there is another farmer applying for a license.
According to Hemp Benchmarks, Wisconsin’s Department of Agriculture, Trade and Consumer Protection had received 1,4999 hemp grower applications by June 12 of this year. These numbers aren’t far off from what the state saw in 2019, and half of those applications came from new hemp farmers eager to cash in on the lucrative potential of the crop.
Now, some hemp farmers have shifted their focus to growing industrial hemp for fiber or grain. However, the vast majority of the industry will continue to hone in on maximizing CBD production.
In reality, this isn’t an issue of a failed industry. Like any other industry boom, it’s an issue of growing pains. And the farmers who persevere will play a huge part in shaping the future of hemp.
“In emerging markets, especially during a pandemic, it can be hard to predict the future of an industry – Specifically, the hemp market,” says Advanced Hemp grow expert Justin Pullin.
The thing is, hemp’s growing fast and has experienced growing pains… However, with proper planning and a well-rounded game plan (with back up plans), you can set yourself up for success. The most important thing is to be prepared for any obstacles and implement the strategies you’ve put in place.”
The fact is, you can still succeed as a hemp farmer.
CBD sales projections still show a positive longterm outlook for the hemp market.
Industry advocates will continue to work on our side.
If you want to come out on top, you’ll need to have a solid game plan …
And a full team of expert support backing you along the way.
3 Action Steps for Persevering in Hemp – Even When Other Farmers Drop Out of the Race
- Start Small and Scale: Hemp for CBD is here to stay. So if you want to get into the space, you have to do it smart. Start small and experiment with the best hemp strains for your environment before going all in and increasing your hemp acreage.
- Have a Game Plan: We can’t stress this enough. Know what you’re doing with your hemp before you plant the first seed in the ground. Find your north star in the industry, and point your sails in the right direction.
- Only Feed Your Hemp the Good Stuff: Hemp is an accumulator plant. That means your crops are going to absorb nutrients in the deepest layers of your soil, including unrefined raw materials. When you feed your plants Advanced Hemp, your crops enjoy refined raw materials in the exact ratios your plants need to thrive. And with solid nutrients backed by 21 years of science, you can be confident in the product quality you’re putting out to the market.
Curious to learn more about how we can help you level up your hemp game in 2020? Talk to a hemp expert today.