The hemp market, after riding the highs of the “green rush” in 2021, faced significant challenges in 2022, similar to the broader global cannabis market downturn. This period was characterized by notable corrections in cultivation and prices. However, a recent report from the United States Department of Agriculture (USDA) brings promising news: the market is showing signs of stabilization.
Key insights from the USDA report
The USDA’s National Agricultural Statistics Service released a report indicating positive trends in the hemp industry:
Market value and acreage: The value of outdoor hemp production rose to $291 million, an 18% increase from the previous year, with a stable growing area of approximately 27,000 acres nationwide. The report highlighted that the unprotected segment of the hemp market (areas not covered by specific hemp programs) reached a production value of $258 million.
Yield improvements: Interviews with farmers revealed that the increase in market value is partly due to improved yields in various hemp categories, including grain, fiber and floral hemp. The report, now in its third consecutive year, aims to standardize agricultural research and focuses on CBD and non-intoxicating cannabis crops, designated as “specialty crops” by the 2018 Farm Bill.
- Fiber hemp yield for 2023 was estimated at 4,053 pounds per acre, a significant increase from the previous year.
- Floral hemp yield was estimated at 1,088 pounds per acre, also showing improvement.
- Hemp grain yield was estimated at 779 pounds per acre, marking a notable increase.
Leading states: South Dakota (3200 harvested areas), Montana (2300), Oregon (2900), and California (2100) have emerged as the top hemp producing states, collectively accounting for nearly half of the hemp growing area of the country.
Prices: For various categories of industrial floral hemp prices were recorded as follows:
- Dried flowers at $4.38 a pound, bucking the trend at $6.35, hand-cut at $87.8 and $59.2 for other shapes.
- In particular, there was a decrease in the price of dried flowers, which in 2022 was $11.90 per pound.
- However, the price of Bucked Hemp saw a significant increase, doubling from $3.12 a year earlier.
The bucking process, which is an industrial method used to separate cannabinoid-rich flowers from the rest of the biomass, highlights the differentiated price based on the level of processing of the hemp.
Why hemp matters
Hemp is gaining attention for its environmental benefits and versatility. As a gluten-free crop with an excellent nutritional profile, hemp offers a sustainable alternative in the production of food, fiber and building materials. It requires fewer pesticides and less water than cotton and is twice as efficient as trees at absorbing carbon, positioning hemp as a crucial crop for environmental sustainability.
This USDA report highlights the resilience and growth potential of the hemp market, highlighting the industry’s adaptation to challenges and its role in sustainable agriculture.