News

Hemp boom dropping markets

While hemp has created excitement for a new commodity in the ag industry, new entrants are worried about its stability.

“Just from last year to this year, the prices are dropping insanely fast.”

Organic farmer and co-founder of HempScience Luke Zigovits says his company is creating a value-added niche for retailers.

“I like the idea of one to five acres of production versus people calling me with 42 acres and no market.  It makes a lot of sense to do it better and smaller.”    

He expects once the CBD boom fades away, industrial uses will become a more predominant market.

Paul Mitchell with the University of Wisconsin tells Brownfield he’s worried farmers will continue to oversupply the market and prices will drop more.

“This profitability will not continue at the levels I’ve been hearing about.  I think longer-term; we’ll see an equilibrium that will not be this high of profitability.  It’s going to come down to growing the demand, we need to create markets.”  

Right now, Mitchell says growing hemp for fiber production is the least profitable and suggests marketing to the CBD or hemp seed markets.