September 11, 2019<\/p>\n
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The discussion of industrial hemp, particularly for cannabidiol (CBD), continues unabated in Texas.\u00a0 Colleagues report they hear as many as four hemp processing facilities being proposed in a local area. \u00a0I can only imagine there are double and triple the number of CBD processing facilities being proposed versus those already in operation in other states. \u00a0Texas A&M AgriLife is increasing our knowledge of industrial hemp.\u00a0 Several information programs across the state are being planned by Texas A&M or AgriLife personnel are participating as program speakers.<\/p>\n
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Prospective producers notice there are several organizations and websites seeking to be a voice in the future of Texas hemp.\u00a0 AgriLife is aware of just one Texas organization that is fully farmer-driven and coordinated by farmers.\u00a0 They will be going public later this month.\u00a0 AgriLife encourages prospective attendees at hemp information meetings to keep an open mind and ask pointed questions.\u00a0 Again, beware the hype.\u00a0 For example, a planned CBD processing facility: \u00a0only when you see dirt move and walls going up will the uncertainty about these many plans be eased.<\/p>\n
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Recent Colorado & New Mexico Farm Visits<\/em><\/p>\n <\/p>\n Texas A&M AgriLife staff visited CBD hemp farms in Rocky Ford, Colorado on August 20th<\/sup> (Fig. 1).\u00a0 I made an additional visit to a completely different type of hemp farm\u20143,200 acres in hemp production\u2014later in the day.\u00a0 You hear repeatedly for CBD production there must be no male pollen near the field.\u00a0 The second Colorado site challenges that concept.\u00a0 Planting from seed, about 50% of the plants in the irrigated field are male.\u00a0 Planned harvest is for hemp CBD and seed (Fig. 2). \u00a0I dearly hope we will learn what %CBD was achieved\u2014that result will have a huge impact on how CBD may be produced moving forward.\u00a0 These fields were managed with conventional sprinkler irrigation and without the expense subsurface drip irrigation and\/or plastic mulch sheeting that is often advocated.\u00a0 The farmer also had dryland hemp (Fig. 3).<\/p>\n <\/p>\n An AgriLife Today news release summarizes the trip, see https:\/\/today.agrilife.org\/2019\/08\/27\/agrilife-extension-explores-hemp-issues-answers-in-oklahoma-colorado-tour\/<\/a><\/p>\n <\/p>\n Fig. 1.\u00a0 Wide spacing of transplants with furrow irrigation for high %CBD industrial hemp production, Colorado.<\/p>\n Fig. 2.\u00a0 Colorado industrial hemp production from seed, which includes ~50% of male plants (lighter colored due to senescence), using sprinkler irrigation.\u00a0 Harvest yield of lower %CBD will be of interest to compare to more expensive production using transplants or feminized seed.\u00a0 Irrigation levels approach 15\u201d. Fig. 3.\u00a0 Colorado dryland production of industrial hemp from seed (hence male plants in the field).\u00a0 Harvest will separate grain (potential planting seed) from plant biomass for CBD processing.\u00a0 Analysis of CBD yield and grain will determine economics of production.\u00a0 Will %CBD be high enough to merit processing?\u00a0 (The grower is hoping for 5 to 6% CBD.) \u00a0Summer 2019 rainfall is slightly below average but deep soil moisture at planting was very good.<\/p>\n <\/p>\n <\/p>\n I made a subsequent visit to a farm that planted over 2,000 acres of hemp in Union Co., NM.\u00a0 I will follow this up with a visit to a hemp breeding program in Corona, NM on September 13.\u00a0 The information I am learning will be helpful in aiding Texas producers making decisions about whether to try growing hemp and if so, how it will be done.\u00a0 The Union Co. example highlighted a sound principle that may help Texas growers manage risk.\u00a0 Not only did the farmer have a detailed contract\u2014reviewed by his own attorney\u2014with the buyer, but especially, the buyer provided the genetics (in this case feminized seed).\u00a0 Cost of planting material (seed, feminized seed, transplants, clones) is the source of some of the most excessive expenses a prospective producer faces.<\/p>\n <\/p>\n One Colorado grower said a producer absolutely should not pay more than $4 per single transplant, but this is still excessive.\u00a0 Do they really cost that much to produce?\u00a0 Or does feminized seed truly cost $1 per seed?\u00a0 These are prices AgriLife expects will fall considerably soon, perhaps even as early as next year.\u00a0 Therefore, I like the concept of the above NM farmer\u2019s buyer\u2014who would be in a much better position to know what the actual cost should be (and not overpay)\u2014providing the genetics.\u00a0 Going forward, as a prospective producer ask potential contractor\/buyers how they will help you manage huge economic risks.\u00a0 Sharing arrangement on genetics could be one key consideration.<\/p>\n <\/p>\n Status of Hemp Regulations for Texas<\/em><\/p>\n <\/p>\n USDA has still not released their proposed regulations for public comment.\u00a0 Once those come out then states (who probably already have a good feel for what they will be) will begin finalizing their own draft rules.\u00a0 I am still unsure when the process will be completed.\u00a0 Or when Texas hemp farmers and businesses may begin applications for licensing, etc.\u00a0 We hope they are here early in 2020, especially as we are learning from growers in CO and NM that they believe they should be planting earlier (e.g., possibly by March 1 for the Lubbock area?\u2014AgriLife sees time of planting a likely area for initial research).<\/p>\n <\/p>\n Another area of regulation or application of standards that producers should be highly interested in is the hemp seed industry.\u00a0 As noted above most hemp seed and feminized seed sources are not pure.\u00a0 Standards need to be applied in the seed industry to protect growers from off types or planting seed that claims a genetic variety but is not.\u00a0 For the current cost of the seed, farmers need this assurance.\u00a0 A Midwest farmer notes deception and fraud in the hemp seed industry as a major concern for hemp growers.\u00a0 You can read his comments in a Farm Journal report at https:\/\/www.agweb.com\/article\/hemp-pitfalls-and-promise-alarm-sounded-midwest-grower<\/a>\u00a0 This is recommended reading for many other reasons as well (many hemp farming risks that are excessive).<\/p>\n <\/p>\n Perspective on the Retail Cost of Hemp CBD Products\u2014What does the farmer receive?<\/em><\/p>\n Last week I examined three examples of CBD products (tablets, liquid) that sell commercially for $30 per unit.\u00a0 Each contained 250 milligrams (0.00882 ounce) of CBD.\u00a0 (A similar commercial product containing 250 mg CBD pictured at right; sales price of this brand is unknown.)\u00a0 My question<\/u>:\u00a0 how much of that sales prices goes to the producer<\/u>?\u00a0 I make some reasonable assumptions based on 2018 prices paid to a farmer, processing efficiency, etc. \u00a0($4 per each percent of CBD in 1 lb. of dried raw material; some Colorado producers report their agreements are just $2 per one percent of CBD).\u00a0 The result?\u2014only $0.22<\/strong>, or as little as 0.7% of the $30 commercial sales price!\u00a0 (By comparison, the value of wheat to produce bread is 6 to 7% of the sales price.)\u00a0 So even though under current economics there is potentially very high revenue to a CBD<\/p>\n producer, you can see there is a tremendous mark-up through processing and sales.\u00a0 And for products whose effect is largely uncertain.\u00a0 A producer growing 10 acres for CBD that yields 750 dry pounds or raw material at 10% CBD would yield about 1.2 million of the 250 mg CBD sales units.\u00a0 How many CBD producers with the potential acreage noted above in CO and NM will saturate the market for CBD?\u00a0 Which means prices\u2014for producer and retailer\u2014should collapse.\u00a0 (Furthermore, is there near the capacity to process all the potential CBD raw material that could be produced?\u00a0 Oversupply of CBD raw material could occur quickly.)<\/p>\n <\/p>\n Also, since there is no current U.S. Food & Drug Administration regulation of hemp CBD products there is little third-party assurance that buyers are receiving what is labeled.\u00a0 This may not affect hemp farmers, but with the hype and uncertainty around CBD this area is ripe for misleading claims or worse.<\/p>\n <\/p>\n Texas A&M AgriLife and Potential Hemp Research<\/em><\/p>\n <\/p>\n AgriLife is confined by the same issue of legality and forthcoming rules that prospective growers and processors in Texas face.\u00a0 Until we are licensed, we cannot legally conduct research on industrial hemp.\u00a0 AgriLife leadership is in discussion with some industry concerns for possible funding and research partnerships, but no agreements have been finalized.<\/p>\n <\/p>\n Once permitted, early AgriLife testing will include evaluation of currently available industrial hemp germplasm.\u00a0 This research will cost much more and be more time consuming than our work on other crops due to reporting and testing of materials for \u2264 0.3% THC.\u00a0 I anticipate AgriLife may first test varieties listed on nearby states\u2019 approved lists for CBD, grain, and fiber production.\u00a0 This is a priority for me.\u00a0 Testing will evaluate germination (including cold temperature), seedling vigor, stand establishment, and regional adaptation in varied Texas environments. \u00a0Though this research would preferably culminate in evaluation of CBD production, grain yield, or fiber biomass and quality, the duration of that work to harvestable plants will require expensive testing for THC.\u00a0 Projects that terminate before formation of floral structures would not require THC testing.<\/p>\n <\/p>\n In addition, we will assess genetic purity of each line.\u00a0 Industrial hemp workers in other states note that few hemp varieties, clones, etc. appear to be genetically pure.\u00a0 There are off-types or the seed is contaminated.\u00a0 Perhaps future state level department of agriculture seed certification will minimize this issue (higher seed standards).\u00a0 Furthermore, we would like a minimum of two years of data before conclusions about suitable genetics.\u00a0 I expect this work may identify lines that might not be a preferred variety for CBD or fiber, but if it grows reliably, then that will be an important consideration.\u00a0 Failure in stand establishment in other states is a common occurrence though transplanting seems to reduce the concerns (but in turn increases cost for preparation of transplants, labor, specialized machinery, etc.)<\/p>\n <\/p>\n AgriLife Extension Resources for Hemp Production<\/em><\/p>\n <\/p>\n Initial resources for Texas hemp at http:\/\/lubbock.tamu.edu\/hemp<\/a> focused on industry\/market considerations.\u00a0 An AgriLife systemwide website is being prepared to replace this temporary webpage, which will route viewers to the new webpage when completed.<\/p>\n <\/p>\n If you have questions about potential future hemp production in Texas contact myself or members of the AgriLife Industrial Hemp Education Initiative Team, https:\/\/today.agrilife.org\/2019\/07\/09\/texas-am-agrilife-creates-team-to-answer-hemp-questions\/<\/a><\/p>\n <\/p>\n![\"\"](\"https:\/\/agrilife.org\/texasrowcrops\/files\/2019\/09\/fig-1-300x225.jpg\")
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