PORTLAND, Ore.--(BUSINESS WIRE)--Economist Clarissa Allen and noted cannabis economist Beau Whitney, of Whitney Economics (WE), today released the results of “The Field of Dreams: An Economic Survey of the United States Hemp Cultivation Industry.”
A top line finding, based on the data from the survey and on research of the overall market, once fully realized, the hemp industry is poised to become the fourth major crop and a foundation to agriculture in the United States.
“This, in itself, shows not only the value of the industry, but the significance of the legalization of hemp,” Whitney said.
The survey also concluded that, in its first year, even if only a small fraction of the biomass produced by the U.S. during the 2019 season makes it to market, hemp has the potential to become the third largest agricultural crop in the United States by revenue, second only to corn and soy. Based on data from the U.S.D.A., the total revenue from cash crops in the U.S. in 2018 was $197 billion.
If hemp supply chain issues are resolved and the full value of the acreage is realized, the total value of the hemp biomass is an estimated $11.3 billion or roughly 6% of the total value of the entire U.S. cash crops.
Other key findings of “The Field of Dreams” include:
- 65% of farmers who responded to the national survey did not have a buyer.
- There is one processor for every four growers and the average acres per processor is 138 acres, signifying a major constraint in the hemp supply chain.
- The average acres per hemp farm in the US is 27.26 acres, with 75% of farms less than 20 acres.
- Licensed acreage has increased over 450% year over year generating nearly 150,000 jobs.
- Supply chain issues are impacting the industry resulting in roughly 1/3 of the licensed acres coming to market.
The full results of the survey can be downloaded here:
The survey, executed in partnership with Portland-based economist Clarissa Allen, was written for the purpose of better understanding the hemp market by deploying a first-of-its-kind survey to assess employment, wages, output capacity, pricing and the supply chain of hemp. The survey was sent to nearly 10,000 individual cultivators in 18 out of the 34 states that have hemp programs.
The objective of the report was to be a resource to operators, investors and policymakers from a data perspective and to articulate the nature of the hemp industry. It also creates a baseline of data for others to use as a reference point as the industry develops and matures.
“The intent is to outline what issues are associated with the deployment of the hemp industry in 2019, how to address them from a policy and business perspective and to predict the direction of the industry as it matures in the years to come,” Whitney said.
After years of prohibition and a series of U.S. congressional reform bills easing the prohibition against cannabis used for industrial purposes (i.e. hemp), the initial limited business opportunities significantly increased with the passage of the 2018 Farm Bill and opened the floodgates for firms to begin to legally operate hemp-related businesses.
Within months after the bill was signed into law, investment monies and new firms poured into the market. In less than 12 months, Departments of Agriculture from 34 states had issued thousands of licenses for hemp cultivation, processing and wholesale distribution. In fact, at the time of this survey’s publication, between 450,000 and 500,000 acres of land have been licensed to grow hemp and nearly 20,000 licenses had been issued.
About the Authors:
Clarissa Allen has a bachelor’s degree in economics and is pursuing her master’s in economics at Portland State University. Her research interests include environmental economics, sustainability, and survey methods and design.
Beau Whitney is an economist and the founder of Whitney Economics. As a recognized analytics expert and cannabis economist, Whitney brings extensive experience and sophistication on every aspect of the supply chain in a vertically integrated cannabis economy.
About Whitney Economics:
Whitney Economics is an economics and business consulting firm based in Portland, Oregon. It has clientele in the U.S. and internationally from multiple industries, including high tech, software, as well as cannabis for adult-use, medical and industrial purposes. Whitney Economics also performs business valuations, provides expert witness testimony and helps develop business and strategic plans for large corporations and small family owned businesses.
About Global Extraction (helped support the costs of publication)
Global Extraction was founded by American Hemp Seed Genetics. Global Extraction delivers large scale ethanol hemp processing with disruptive technology. Custom engineered facilities tailored to each client's specific needs deliver turnkey, fully compliant operations along with full support staff to ensure successful operation. www.GlobalExtraction.org
About Matron Loop (helped support the costs of publication)
Matron Loop was founded by farmers with the goal of helping our dear friends, the forgotten farmer, to trustfully engage and navigate all aspects of the emerging industrial hemp industry. Our business is to help farmers get the most from their hemp crop by offering custom hemp harvesting and hemp drying services. www.matronloop.com/