South Dakota farmers tout industrial hemp industry as 'emerging, profitable' venture

In John Peterson’s first year of producing hemp crops on his Wakonda farm, he said he saw yields at about 28 bushels per acre

Shown here are several hemp stocks, seeds and several products derived from hemp. The items were on display during Wednesday's group discussion on industrial hemp that was hosted by two South Dakota hemp growers.
Sam Fosness / Republic

MITCHELL — For the few South Dakota hemp farmers who have dabbled in the state’s new emerging industry, it’s been a profitable venture for some.

Derrick Dohmann and John Peterson are among the state’s small group of farmers who have produced industrial hemp over the past year and found strong success. In hopes of enticing more farmers to grow hemp and get in on the emerging market that became legal in the state roughly two years ago, Dohmann and Peterson hosted a group discussion Wednesday in Mitchell to provide tips in hemp production.

“When you break it down to bushels per acre, it is pretty dang attractive,” Peterson said during the discussion that attracted about 15 area farmers.

In Peterson’s first year of producing hemp crops on his Wakonda farm, he said he saw yields at about 28 bushels per acre, which he noted was better than some of his soybean crops last year. In total, Peterson planted about 36 acres of hemp last year.

The price for hemp in South Dakota is sitting at $24.20 per bushel. According to Peterson, the current price for organic hemp is worth double at $48.40 per bushel.


After his first year of hemp production, Peterson is delving further into the industry with his plan to open a hemp fiber processing plant on his Wakonda farm. There are just two hemp fiber processing facilities in the nation, which are in Kansas and Montana. With Peterson's plant, along with Ken Meyer's plant he intends to build near the Howard area, it would bring two fiber processing facilities to the state and reduce freight costs.

“Ours did 28 bushels per acre and about 1,200 pounds per acre. That 28 bushel out-yielded some of our soybeans,” Peterson said, noting he planted about 20 pounds of seed per acre. “That’s how a new hemp crop did in a drought year in South Dakota, and that’s what’s got me excited about this.”

Peterson’s processing plant will accept round and large square hemp bales.

Dohmann and Peterson primarily grow hemp and harvest the stalks and seeds for its fiber, which can be used to make a myriad of products such as food, clothing, fuel, paper, building materials and rope, to name a few.

While many farmers produce hemp for cannabidiol, commonly known as CBD — a popular pain relieving alternative — Dohmann stressed that CBD isn’t the only avenue to produce hemp and flip a profit. The meeting centered around industrial hemp to show area farmers the type of profit to be had on the industrial side of hemp production.

As of now, there are 20 licensed hemp producers in the state, while there are just four licensed processing plants.

In the first year of the state’s legal hemp growing season, there were 1,675 acres of hemp planted in South Dakota. Of that, 15 acres were CBD hemp.

Growing, harvesting industrial hemp

With the versatility of hemp and abundant ways to harvest the crop, Dohmann said farmers who have basic equipment are able to plant and harvest the crop. According to Dohmann, who has been growing hemp on his Willow-Lake area farm for several years, once hemp is planted it takes about 90 to 120 days to grow and be harvested.


Dohmann said hemp has the ability to grow well on a variety of soils such as loamy soil and rich black dirt. As for planting the crop, Dohmann recommends planting seeds about a half inch into the ground.

Seed selection is also a vital part of the process to grow industrial hemp that meets the quality specifications set by the state. Dohmann is the lone hemp seed seller in the state, and he's been finding success in a variety of seeds.

For hemp to be considered legal under state law, the crops cannot have more than .3% of Tetrahydrocannabinol (THC) – the psychoactive ingredient contained in hemp that produces a “high.” To avoid growing hemp crops that later test over the amount of .3% THC, Dohmann said it’s important to carefully select seed products.

“Whatever you have on your farm, you will be able to use. You’re not going to have to go out and spend $150,000 on a dual cut header for this stuff,” Dohmann said. “After you plant it, just watch it grow. That’s what’s nice with this crop.”

One of the most vital steps in the process after harvesting the crop, Dohmann said, is placing the stalks in a bin that allows aeration.

“There is no letting it sit in the combine or grain cart overnight because it will all be garbage the next morning. You have to get in the bin that night,” he said.

According to Dohmann, the fiber processing plants prefer the hemp stalks to have a moisture level of about 10 to 12%. To dry the hemp to be processed into fiber, Dohmann said producers should not apply heat.

Another method to dry the crop is done by retting, which is a controlled drying process.


“In order for this to be stable, you need to have it dried down to 10% or less," Dohmann said. “You don’t want to use any heat because you could toast that oil or cook it and we can’t take the seed.”

Peterson noted that producers must have at least 20 acres of the industrial hemp planted to receive crop insurance. For CBD hemp producers, producers must have 5 acres planted to receive crop insurance.

Dohmann said there has been ongoing research involving hemp-derived products being used for animal feed, which he noted could open up a whole new market.

“Once the seed gets into the animal markets, look out. It will be a big market,” Peterson said.

Sam Fosness joined the Mitchell Republic in May 2018. He was raised in Mitchell, S.D., and graduated from Mitchell High School. He continued his education at the University of South Dakota in Vermillion, where he graduated in 2020 with a bachelor’s degree in journalism and a minor in English. During his time in college, Fosness worked as a news and sports reporter for The Volante newspaper.
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