A paper in the upcoming March 2020 Industrial Crops and Products journal provides a basis for the future of large scale hemp production agriculture utilization of dual or tri-crops. Researchers at the University of Reims Champagne-Ardenne affiliated with the French National Research Institute for Agriculture, Food and the Environment (INRAE) conducted laboratory simulations of field-retted hemp (hemp moistened or soaked in water to loosen fiber bundles) for hemp harvested at flowering and seed-maturity stages.
A major finding was that flowering stems had a faster decohesion of fiber bundles than stems harvested at seed maturity, due to higher initial solubility & lignin (complex organic polymers) content. This finding has potential significant implications for the emergence of high production hemp agriculture in America, particularly the Midwest.
To date, American hemp production has been largely dominated by flower & biomass crops, as non-THC cannabinoids like cannabinol (CBD), cannabigerol (CBG), etc, have reached the consumer markets and offered early entrants to the market high profit markets. However, with the significant expansion of hemp production since the signing of the 2018 Farm Bill, some experts believe that the market is heading towards conditions of CBD market oversaturation, if it isn’t there already. In her year end 2019 note, PanXchange CEO Julie Lerner says:
“PanXchange believes that the current oversupply is significantly more than many in this market assume. As shown with Charlotte’s Web, one of the largest CBD product manufacturers need only an estimated 500 acres or 800 kg of distillate to reach $95 million in revenue. In our second scenario using Brightfield’s $4 billion of 2019 CBD sales, we project that the market would be satisfied with 32,600 kg of distillate. Taking the longer view, the same report has projected sales of CBD products to exceed $24 billion in 2025. If the same math was used, the 2025 market would be supplied on just shy of 200,000 kg of distillate, which would still be covered by the 2018 harvest. Note that these numbers do not account for smokable hemp or any non-CBD industrial purposes.”
Although the market emergence of other minor cannabinoids will provide some expansion space for flower crops, Lerner’s analysis implies there is a relatively small and finite space for flower crops in market -- possibly just a couple hundred thousand acres worth.
As production acreage increases, one route that will become increasingly popular are dual or tri-crop hemp varietals, where a flower, fiber, and/or seed hemp crop is grown for multiple uses. Assuming good yields, hemp fiber or seed production per acre from a single crop is projected in the $400-$600/acre ballpark, implying that being able to additionally harvest a flower or biomass product from the same acre will provide American farmers with a profitable alternative to corn or soybeans, which are barely profitable in current markets. Identifying areas of possible efficiencies is key to the development of future hemp production and pathways to market in America.