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 marked by considerable corrections in cultivation and prices. However, a recent report from the U.S. Department of Agriculture (USDA) brings promising news: the market is showing signs of stabilization.
Key Insights From 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 open hemp production rose to $291 million, an 18% increase from the previous year, with a stable cultivation area of around 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 increased 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” since 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 an improvement.
Grain hemp yield was estimated at 779 pounds per acre, marking a notable increase.
Leading States: South Dakota (3200 harvested area), Montana (2300), Oregon (2900), and California (2100) emerged as the top hemp-producing states, collectively accounting for nearly half of the country’s hemp cultivation area.
Prices: For various categories of industrial floral hemp prices were recorded as follows:
Dried flower at $4.38 per pound, bucked at $6.35, hand-trimmed at $87.8, and $59.2 for other forms.
Notably, there has been a decrease in the price of dried flowers, which stood at $11.90 per pound in 2022.
However, the price for bucked hemp experienced a significant increase, doubling from the previous year’s $3.12.
The process of bucking, which is an industrial method used to separate cannabinoid-rich flowers from the rest of the biomass, highlights the differentiated pricing based on the processing level of hemp.
Why Hemp Matters
Hemp is gaining attention for its environmental benefits and versatility. As a gluten-free crop with a great nutritional profile, Hemp offers a sustainable alternative in food, fiber, and construction material production. It requires fewer pesticides and less water than cotton and is twice as efficient as trees in carbon absorption, positioning hemp as a crucial crop for environmental sustainability.
This USDA report underscores the hemp market’s resilience and potential for growth, highlighting the industry’s adaptation to challenges and its role in sustainable agriculture.
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