Hemp

An area farmer holds up hemp seeds he planted last year in a field in Williams County in this file photo. Hemp has been popular in the U.S. for health food and organic clothing, but could also open up entirely new and innovative markets now that the 2018 Farm Bill has made it legal. Growers, however, will still have to register their crop with their state's Department of Agriculture.

At first when Wade Fischer was harvesting his industrial hemp, he thought he had a pretty good yield. 

That was before he weighed the crop.

“I thought we had 800 bushels, but it’s so light,” Fischer said. “We only had 500. I’m definitely not making money on that. I’m going in the hole on it. Pretty bad.”

Fischer was one of 37 producers statewide to try growing industrial hemp this year. It is the third year running for the state’s pilot of the federally regulated crop. Between them, they had 3,000 acres in production. Fischer had 7 percent of that.

There’s no crop insurance for industrial hemp, and the market is not yet well-defined in North Dakota. The crop also faces many restrictions, because it is listed as a Schedule 1 controlled substance. 

Industrial hemp is a close cousin to marijuana, even though it doesn’t itself contain any appreciable amount of the psychoactive THC. But because it’s in the same plant family and has a visually similar appearance, it has been federally regulated for decades.

The 2014 Farm Bill paved the way for U.S. states to begin growing industrial hemp for research purposes. It allowed state departments of agriculture and universities to apply for permission to begin a pilot program. 

However, states wanting to start pilots have had to walk a fine line with the Drug Enforcement Agency, and some, like Kentucky, did run afoul of the federal agency. The DEA confiscated Kentucky growers’ seed, and it took a court battle to retrieve them.

“I am making sure DEA isn’t impeding our ability to do what Congress has given us the right to do,” North Dakota Agriculture Commissioner Doug Goehring said. “But I don’t need to be sideways with DEA or the federal government. I’m trying to make sure all the i’s are dotted and all the t’s are crossed, and that I have a defensible position in everything I do.”

Among those efforts are out-of-state sales, Goehring said, as well as additional processors so there are more options for farmers trying to market their crops.

 

No free market

Since it is listed as a Schedule 1 substance, industrial hemp comes with a lot of rules that other crops don’t have. 

Industrial hemp can’t just be harvested and taken to a grain elevator to search out the best price. It must be sold within the state, and right now, North Dakota has just one buyer.

That individual is on the east side of the state and interested only in buying the seed for food-grade oil. 

There are other potentially lucrative products for hemp. The stalks can be harvested for use in textiles. But there’s no processor in North Dakota to buy it for that.

So the stalks, which might have been a secondary crop to boost Fischer’s bottom line, will likely be wasted. Fischer isn’t even certain whether the rules would allow it to be used for cattle bedding.

The prices for Fischer’s crop came out a few weeks before Fischer harvested it. They were disappointing, particularly compared to last year.

“I can’t believe the price they came out with,” Fischer said. “It’s less than half of last year.”

The problem, Fischer said he was told, is that China is importing a lot of hemp, and that’s driven market prices down. But Fischer believes that 3,000 acres was simply too much for North Dakota’s tiny, one-company market.

“All of us were pretty upset with the price,” Fischer added. “A lot of the growers haven’t signed the contract yet.”

Growers aren’t allowed to just keep the seed, however, Fischer added. 

“Eventually we will have to give in,” he said. “Though there is one guy trying to see if he can sell it out of state. He said he is making progress, so maybe so.”

 

Hemp has hoops

It’s not just the federal regulations, however, that make industrial hemp a difficult crop.

It’s also more labor intensive than Fischer had expected. It requires drying after harvest, so it doesn’t go moldy and spoil. His fields will likely have to be burned of stubble, because there’s no market for it, and the stubble is brutal enough to puncture tires.

There are also expenses to consider once the harvest is done. After it’s dry enough, the hemp must be cleaned to ensure it is food grade, which will cost Fischer $2,500 a semi-load. 

Then there’s the long haul across the state to the sole buyer. Yet another expense.

He knows a fellow grower in Williams County who grew about 10 acres of hemp. That person has a canola crop going across the state. He wanted to put his hemp crop in the back of the semi to deliver it to a closer market. He was told his driver would have to have a background check because of industrial hemp’s designation. That is if, of course, he can get permission to send the crop to a buyer across state lines. 

“There’s no money to haul it across the state for the amount he has,” Fischer said. 

 

Still hope for hemp

It was still remarkable to get a crop at all this year, Fischer acknowledged. Grenora was among the driest areas in the state. The area lay in exceptional drought through much of the growing season.

Fischer seeded his hemp May 25 and 26, just after a brief rain he hoped would help the crop germinate. It evaporated too quickly, however, to raise the crop.

A June 14 rain of about 33 hundredths of an inch brought the crop out of the ground, and then a June 17 rain of 40 hundredths of an inch helped sustain it. Areas that had snow melt looked best.

There were occasional sprinkles of rain here and there during the growing season. Another 9 hundredths of an inch one week during the worst part of the drought visibly helped the crop. 

“We didn’t get a lot of the rains that Williston did,” Fischer said. 

But every rain they did get helped the crop, even the late-season ones. 

Wheat is generally hurt by late rains, but the hemp seemed to improve.

“It yielded fair,” Fischer said. “I think in a good year, I know what I would have yielded. With today’s market prices, though, we would barely have come out ahead. The quick cash is gone. Everyone wanted to jump on it this time, but now it’s like a normal crop, where you can lose a buttload of money.”

And there’s no crop insurance to mitigate that risk.

 

Looking ahead

Goehring believes what will help industrial hemp the most at this point is a simple reauthorization in the farm bill.

“That kind of solidifies its position and place in U.S. agriculture going forward,” Goehring said. “At this point, it’s still a state’s right issue. Some don’t want it in their state, and they don’t want it to go across their state line. We are trying to respect that, and I’m working with my colleagues to identify what states are doing it and what states are not. It makes it a bit of a challenge moving forward, but we are trying to impose our will on anyone.”

Fischer, however, isn’t sure he’ll try hemp again, and he’s betting a lot of other farmers who tried it feel the same.

“It’s hard not to be bitter on it,” he said. “The state needs to change some things.”

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