Industrial Hemp: Fiber and Grain
The future of hemp is bright, but it has been a long road for hemp cultivators, processors and manufacturers. U.S. hemp cultivation has atrophied, with fewer farmers on smaller plots (In 2022 the Average farm was 17.1 acres), but at the same time, other markets are beginning to ramp up. For example, significant inroads are being made in the areas of grain exports for animal feed, hemp fiber for plastics and the automotive industry. Additionally, hemp fibers used for pulp and paper are attracting the attention of state legislators, and particularly those in states that have been impacted by declines in timber industry activities.
Hemp-Derived cannabinoids have seen a significant ascension in 2023. The most recent economic impact report we published in 2023 indicated a total potential market for hemp-derived cannabinoids of $28.4 billion. Most of this revenue is already realized through legal sales.
The question for 2024 is: Can the momentum of hemp-derived cannabinoids be sustained?
In 2024, look for more clarity in terms of federal hemp policy. A major risk to operators is that states have been responding to hemp-derived cannabinoids with legislation that directly impacts opportunities for hemp fiber and grain. Hemp operators will need to monitor state policies to avoid the potential impacts from anti-cannabinoid policies. Conversations are ongoing, in terms of what hemp-specific issues should be addressed in the upcoming 2024 farm bill. Whitney Economics provided hemp data and insights to the staff of the House Agriculture Committee. It was an honor to be invited to have a seat at the table.
We are forecasting a rebound in terms of hemp cultivation in 2024 and 2025. The future, while murky in the near term, remains bright for business operators in U.S. hemp.
Excerpt taken from The Whitney Wire – Sign up HERE
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