Hemp farming is a growing industry that provides the highest quality of hemp and CBD to clients everywhere. It’s a wonder how these farmers are making a profit. Or is it?
Now that hemp and CBD are legal, farming it has become more common and profitable. It seems ridiculous to say that farming hemp can be profitable, but the reality of the situation is just that. Farming hemp can, and is, profitable.
Hemp Farming Facts
Hemp is a growing industry. There’s food, oils, drinks, and multiple ways to smoke it. So how do all these markets get it? The answer is simple: farmers. Hemp farming has become a growing industry over the years and many are trying to find out what makes it so special. It’s truly possible that something that sounds so basic can honestly provide that much profit. The question remains, how?
Current Profits of Hemp Farming
While so many countries have begun to jump on the hemp bandwagon, it seems Canada is thriving the most. They currently estimate profit per acre of hemp farms to be resting between $200-$250. This is an amazing outcome for any farmer, Canadian or otherwise. Many traditional crop farmers don’t see this high of a profit.
While, clearly, the Canadian farmers are doing well with their profits, Americans are certainly doing better. For a typical American hemp farm, profits are estimated right around $250-$300 per acre. This is quite a profitable sale for those farmers working with upwards of hundreds to thousands of acres.
Understanding Hemp Farming’s Costs vs. Revenue
As the founder of Atalo Holdings, Joe Hickey, says, the profitability of hemp relies largely on the purpose of the crop. Atalo Holdings is one of Kentucky’s most expansive hemp farming co-ops, currently involving more than 60 farmers. Hickey says there are three main products in the hemp farming market: grain/seed, fiber, and CBD. Here’s a breakdown of the costs vs. revenue for farming hemp according to the purpose of the crop:
- Hemp grain/seed. Hemp grain sells between $0.60-$0.65 per pound. The average farmer can fit about 1,000 pounds of hemp grain into one acre. The costs of farming hemp grain or seed run from $300 to $350 per acre. If you multiply the amount hemp grain sells for by 1,000 pounds per acre, then subtract the average costs of farming, you come to around $250 to $300 in profit per acre.
- Hemp fiber sells for a similar amount to hemp grain/seed. The average price is $260 per ton of hemp fiber. The average farmer can farm 2.5 to 3 tons of hemp fiber per acre. The costs of farming hemp fiber are the same as hemp grain/seeds: $300 to $350 per acre. If you do the math on hemp fiber costs vs. revenue, the average farmer can make up to $480 per acre in profit. The hemp fiber market can be volatile, however, depending on the industrial processing capacity in the national market.
- The math is more complex when farming hemp for CBD. The two main methods for farming for CBD are agronomic and horticultural. Agronomic hemp farming refers to growing it like any other crop. This method is cheap and low-risk, but it yields less crop for CBD. The horticultural method grows hemp under similar conditions as cannabis. It results in higher yields of CBD, but can be more expensive and higher risk.Cultivating hemp for CBD can yield incredible profits depending on the market and the farming methods. Selling CBD can generate anywhere between $2,500 and $75,000 per acre. It is such an expansive range due to the difference between agronomic and horticultural farming, as well as the learning curve when starting to grow hemp for CBD for the first time.
The costs of hemp production can range between $170 and $1,000 or more per acre depending on the type of equipment the farmer purchases. The average cost is around $500 for most farmers, not including the price to rent land. The average cost to purchase hemp seeds is $120 per acre. Hemp revenue is expected to only build from here. Experts predict the U.S. hemp market to grow to $1.9 billion by 2022. This is good news for industrial hemp farmers, who may expect even better cost vs. revenue averages in the coming years.
The Hemp Market is New & Evolving
While so many other industries are shutting down and many companies are having trouble keeping up due to trade issues and tariffs with China, the hemp market is steadily growing. As it continues to be legalized in more states, hemp has become one of the biggest money-makers in the country. Farmers are turning to it for their choice crop, businesses to sell it are showing up all over the map, and even the number of people talking about it has grown.
All of these changes within the U.S. based on the hemp market are a creation of new standards. With all the new ways you can be involved in hemp, there are endless possibilities to make money with this product. The profit per acre for farming alone should be enough to make anyone consider the possibilities of working with hemp in one way or another.
The changes due to the growth of hemp have brought on the reality that it truly is a money crop. Due to the business aspects, the farming of it, and even the sales and purchases; hemp has truly become one of the top products in the United States in recent years. It continues to steadily grow and be a source of great income and provision for many people.
With the ability to farm, cultivate, extract, buy, sell, and even have stock in hemp; it’s difficult not to have a new outlook on the world of hemp.