2021
The hemp industry continues to struggle to find its balance in the agricultural economy. As the industry continues to work through hemp inventories produced in 2019, 2020, and 2021, which have continued to suppress farm gate prices, retail pricing remains sticky. For example, in Kentucky, 1,675 acres of hemp were harvested in 2021 representing a 63% decrease over 2020. Multiple states around the country are experiencing these types of declines. Hemp production destined for extraction continues to dominate the national market. Consumers of hemp products are loyal and purchase mostly online. However, there is market confusion within the industry as consumers need additional education on the differences between hemp and marijuana, according to our research.
2022
For the market to move forward in 2022 the industry needs to educate consumers on the differences between hemp and marijuana. Furthermore, uncertainties around regulations, THC content, pet and livestock feed approval, inconsistent smokable laws between states, and FDA approval continue to hinder growth in the hemp sector. Some processors continue to explore new marketing channels by focusing on cannabinoids other than CBD (i.e. CBG, CBN, etc.) or other THC attributes (i.e. delta 8,10). However, significant increases in floral hemp production are not expected until current stocks are processed (or destroyed because of storage issues) or demand shifts. Conversely, the grain and fiber industries are starting to see an increase in demand as investment in these sectors continue to increase. Hemp continues to be a small sector of agriculture that needs stability before significant increases in acreages are realized.
Figure 1: State and Region Hemp Biomass Price
Mark, Tyler. “Hemp Review and Outlook“. Southern Ag Today 2(4.3). January 19, 2022. Permalink
