Craft Industrial Hemp: The Promise of Profitability
The Beginning of the Craft Hemp Market: Press Release
Colorado Farmers Unite to Create the Nation’s First Craft Nutraceutical Hemp Market
Several Colorado Industrial hemp farmers who are growing hemp for CBD have come together to focus on development of high CBD, feminized hemp seed, propagation and cultivation techniques to supply hemp biomass and hemp oils to leading nutraceutical product manufacturers. Chimney Rock Farms CEO and Founder Rich Becks recruited farmers from throughout the United States to who share passion for breeding legal CBD seeds that are stable and capable of meeting USDA regulations compliant with THC levels at less than 0.3%.
“The market fixation on CBD isolates, while an attempt side step THC concerns is actually undervaluing the full potential offered by registered craft hemp growers. The potential “Entourage Effect” from over one hundred cannabinoids and terpenes contained within the hemp plant are being overlooked in the rush to make hemp an industrial commodity.” stated Mr. Becks.
Other industries once dominated by older commodity oriented manufacturers whose focus was price now include the beer and wine industries who have both experienced major market shifts towards premium craft products:
More about Chimney Rock Farms:
Chimney Rock Farms is a privately held feminized seed breeder of full spectrum phytocannabinoid hemp strains registered in Colorado. All products grown by farmers supplying the Chimney Rock Network are tested both internally and independently by third party test labs for potency, purity, consistency and compliance. Chimney Rock Farms cultivation methods go well beyond traditional organic practices without chemically based herbicides, fungicides or pesticides. Chimney Rock Farms is pioneering no-till hemp cultivation to regenerate depleted agricultural farmland while rebuilding soil ecosystems. Chimney Rock Farms maintains full trace-ability and lot control of each batch to ensure consistency of all quality control measures. All hemp or hemp based oils are derived from 100% Federally legal industrial hemp that is registered with the Colorado State Department of Agriculture and conform fully to the 2014 US Farm Bill section 7606 which federally legalized the cultivation of industrial hemp under certain federal mandated conditions which Chimney Rock Farms, its farming partners and suppliers conform to fully.
Learning How to Grow Industrial Hemp for CBD
"A farmer has to be an optimist, otherwise he wouldn't still be a farmer" Will Rodgers
According to the the latest Iowa State University Costs of Crop Production for 2017 report it costs about $4.10 to produce a bushel of corn in Iowa. At the current selling price of roughly $3.50 per bushel the farmer is losing about 60 cents on each one they produce. While the cost per acre has been as high as $830 per acre it means that growing 200 acres of corn will cost about $150,000 to plant this year. Consequently that farmer is on track to lose about $35,000 during 2017. Unfortunately the numbers for soybeans and hay are similarly bleak.
Farmers are getting crushed by falling commodity prices on one side and rising input prices on the other. It's not rocket science: something has to change if farmers are to survive. Right now growing commodity crops looks like a going out of business strategy so it is not hard to see why Industrial Hemp is attracting so many new farmers willing to risk it all to try a more profitable crop. However, most farmers don't know what they are getting into. There is no business I know of where rules change constantly, the processing infrastructure is still hypothetical and each State gets to set their own regulations. On top of all that you still have to compete against a black market where rules are just inconveniences and you'll have to find a buyer through a broker "who knows a guy, who knows a guy who needs some flower..." Maybe Will Rodgers was right; farmers must be optimists.
For over two years Chimney Rock Farms has been helping farmers make the transition to hemp. As an Organic farm for over a decade we too were getting hammered by falling food prices and rising costs, especially labor. While the commodity farmer pays one person to drive a tractor at about $13 an hour the transitioning hemp farmer is faced with much higher labor costs to transplant, tend and harvest each plant. Understanding how to manage these costs are critical to success of any farmer entering this business as we figure out how to scale this industry and grow hemp for CBD for biomass and hemp flower rich in CBD and full spectrum cannabinoids..
Since our mission is to research and develop new methods and technologies to help small and midsize farmers become profitable, hemp was a natural transition crop for us as well. While we know industrial farming is necessary to "feed the world" what isn't well known is that commodity grain and beans are mainly a source of calories the world needs not necessarily the nutrition it must also have. For that fruits and vegetable farming will need to move closer to where people actually live for our agricultural system to become truly sustainable over the long run. We believe it will be necessary to re-localize much of our food system, including animal production, and to do that we are going to need a lot more farmers. If those farmers enter agriculture through hemp then we will have accomplished our mission.
Learning by doing: cloning and seed propagation
We offer full-day Boot Camp training sessions for farmers and their lead growers to learn how the hemp business actually works; how grow hemp for CBD, how to propagate and cultivate hemp, how to control costs, and how to find a market niche by growing the right genetics. We have had very positive feedback from farmers and growers who have attended and are always asked for more in depth coverage around business issues such as hemp yields, THC compliance and how to get started.
Beginning 2017 we started an Intern program which will now be made available online. The online program will cover plant breeding, genetics, propagation, field planting and go-to-market market strategies as well as how to navigate the ever evolving State and Federal hemp laws. Courses will cover seasonal topics such as State reporting,, harvesting, drying and processing. We will look at the whole supply chain to determine who is really making money and how to align your business model to be successful.
To attend a Boot Camp or talk to an Agronomist, go here:
Industrial Hemp Goes Big
The excitement around growing Industrial Hemp is building and spreading from state to state as visions of hemp fields flowing over the horizon captures our imagination. Think about it for a minute. For the first time in over 70 years we are attempting to reintroduce a plant once banned and slated for eradication. It never really disappeared though but rather continued to grow in plain sight in the ditch rows of the Midwest farmers fields or in the basements of urban cannabis growers. With hemp products pouring into the US and estimated to be worth nearly $600 million dollars a year farmers are logically asking why not pay our own farmers to grow it?
"Get big or get out" ... Earl Butz, 1970's USDA Secretary
We might want to take a moment though and consider what "Industrializing Hemp" might mean. In 1935 there were 6.8 million farms surrounding small rural towns all across America. Today there are only about 2 million families still farming and their survival is in question. Sixty percent have gross cash income under $10,000 meaning nearly all of them are losing money. Most farmers need to work off-farm jobs just to keep their land. When we mourn the loss of "family values" today we never really think about how we gutted rural America, the birthplace of those values: work hard, play fair and take care of each other and the land.
Today commodity crops such corn, soybeans and wheat are so oversupplied that farm income has dropped over 75% in the last few years! Corn at $3.40 bushel is a losing proposition for all but the largest agribusiness farmer who has connections and contracts. Just 2% of the farms in business today produce over 47% of all the farm production output.
Earl Butz got his wish. We planted fence row to fence row chasing new demand from overseas markets like Russia in 1972, or flawed ethanol policies in the eighties that now consume over 40% of all the corn produced. Incidentally, the net energy we get from ethanol is very close to break even, meaning we put just about as much energy into it in terms of diesel fuel, chemical fertilizers and pesticides as we get out of it mixing it with gasoline and burning it in a car.
Before we "Industrialized" our food system in the seventies "when farmers produced too much and prices began to fall, the government would pay farmers to leave some land fallow with the goal of pushing prices up the following season. When prices threatened to go too high, payments would end and the land would go back into cultivation. The government would also buy excess grain from farmers and store it. In lean years — say, when drought struck — the government would release some of that stored grain, mitigating sudden price hikes. The overall goal was to stop prices from falling too low (hurting farmers) or jumping too high (squeezing consumers). A side goal was to go easy on the land. The New Deal policymakers had seen how high-production agriculture could devastate land’s productivity. The “dust bowl” was a fresh memory." Grist: "The Legacy of Earl Butz"
Now we are ready to go big again but this time with industrial hemp. Before we institutionalize all the incentives and penalties to do it let's consider some possible unintended consequences. Hemp is a wild plant that hasn't been mono-cropped in the US for a long time. What will happen when we plant hundreds, perhaps thousands of acres across a county? How long will it take for it's natural pest resistance to wane? There are plenty of insects that really like cannabis: aphids, root worms, spider mites, grasshoppers and beetles.... Wild Hemp manages just fine but what happens when we crowd it like corn? What about weeds? Are we OK soaking the ground in Glyphosate? Is a GMO Hemp plant coming?
At Chimney Rock Farms we are researching ways to grow hemp without herbicides or pesticides using Integrated Pest Management approaches. In another blog we will discuss growing hemp for CBD by selecting the best seed and regenerating the soil. We believe hemp is a gift to farmers we can either use wisely to heal the land and each other or not and plant it like just another commodity crop that externalizes the costs to future generations. Let's pause for a moment to think it through before we plant fence post to fence post.