Wisconsin farmers stressed by stagnant dairy and grain markets are showing strong interest in growing industrial hemp this year, but a state agricultural official is warning them not to count on the niche crop to solve their financial problems.
“I’d say interest from farmers is almost extreme,” said Brian Kuhn, who heads the plant industry bureau of the state’s Department of Agriculture, Trade and Consumer Protection.
“The calls we take every day about hemp are very high, and our website hits blows away numbers for almost anything we’ve put on our website in some time,” he said. “We’re getting distinctly higher numbers (for hemp) than what we’re used to, which is a good thing.”
But while the niche crop has the potential to create more income than corn or soybeans, Kuhn said farmers will get burned if they don’t follow rules for selling hemp that are different from rules for selling corn, soybeans and other mainstream crops.
“I’m telling farmers to be very cautious,” Kuhn said. “I don’t look at this as the savior for the farm economy. The farmer who’s on the edge shouldn’t be rushing out there to put 500 acres into hemp. While it’s got great potential and great promise, it could also cause great harm if they haven’t worked through the details of the market side.”
State lawmakers approved a plan in November that allows farmers to grow industrial hemp as a research pilot program, permitted by the 2014 Farm Bill. Thirty other states have started similar programs with industrial hemp — a nonpsychoactive cousin of the cannabis plant that produces marijuana. Its uses include many high-tech, health, manufacturing and food applications, many of which are largely untapped.
The crop, which once thrived in Kentucky, was historically used for rope, clothing and mulch from the fiber, hemp milk and cooking oil from the seeds, and soap and lotions. Other uses include building materials, animal bedding and biofuels.
More than 50 producers have already sent in applications to obtain one-time licenses to grow industrial hemp since DATCP opened the nearly two-month application period in early March, Kuhn said.
“I’d say that is on the high end for what other states have seen in their first year,” he said, adding that Minnesota had about 30. “I wouldn’t be surprised if we had upwards to 100 applications by the time it’s all said and done.”
Some of the farmers who get licenses aren’t planning to grow hemp this year, Kuhn said. That’s not unusual. Kentucky has 150 licensed growers and 12,000 acres of licensed acreage for hemp, but about 100 farmers are currently growing it on about 4,000 acres.
“People are licensing for the max and then, based on reality and markets and all the other details that have to come together, what gets planted is much lower than what is licensed to be grown,” he said.
The biggest factor for farmers is finding a buyer for their crop before they plant the seeds, Kuhn said. That is a different process for state farmers, who often sell their corn or soybeans after harvest.
Ken Anderson, the owner of seed company Legacy Hemp, cautioned farmers to also be on the lookout for scam artists: phony buyers who are promising a big payday at the end of the season.
“But at the end of the day, if that person the farmer talked to doesn’t have the money to pay for it, the person who will be hurt is the farmer,” he said. “I’d rather make three cents a bushel on corn than nothing a bushel on hemp.”
Anderson is building the state’s first hemp grain processor in Prescott and has contracts with 18 organic farmers to grow hemp on 1,800 acres this year. He expects to contract with more farmers over the next few weeks because more receiving centers are opening their doors to hemp farmers in western Wisconsin.
Besides processors, the state’s hemp industry also needs more receiving centers where farmers can have their hemp grain cleaned, conditioned and stored, according to Anderson.
“The grain doesn’t do very well as soon as you take it off of the plant,” he said. “Farmers can lose an entire crop if they don’t have a post-harvest plan in place and get it cleaned and conditioned quickly after harvest.”
Many of the farmers already under contract are in the organic-rich Viroqua and Eau Claire areas, but Anderson has growers signed up from around the state. While a few are growing hemp on 300 acres or more, most will grow on about 40 acres, he said.
Anderson also said he’s contracting with only organic farmers because conventional grain is stockpiled in Canada and prices have dropped. “The way to make farmers profitable right now is through organic, but I think that the market shift will be to conventional grain also,” Anderson said.
Companies working with organic and conventional hemp are showing interest in building processors and other businesses in Wisconsin, but most are taking a wait-and-see attitude, Kuhn said.
Anderson doesn’t mind paving the way for future niche buyers of Wisconsin hemp grain and stalks. An international cardboard maker who uses hemp for his products is looking to build a stalk processor in the United States, and Anderson is looking to bring him to Prescott. That would give hemp farmers the opportunity to make dual sales every harvest.
“His input costs will go down if he builds it here instead of California, and we also have some good connections with building supply companies in Wisconsin that would love to spearhead it for him,” Anderson said.
Anderson is waiting for the day when the consumer and business interest in hemp matches the farmers’ interest in growing it.
“The more companies put hemp into their product lines, the more contracting we can do,” he said. “In Wisconsin, we’re starting to see more of these companies who are interested in putting hemp into their product lines. So, that’s exciting for us.”
The Associated Press contributed to this report.