To the Editor:
The hemp market is not the ‘pot of gold’ that many would have you believe. South Dakota farmers and businessmen should take note.
Thousands of U.S. farmers jumped into hemp production following passage of the 2018 Farm Bill, and “many of them are now trying to survive a glut that has flooded the market … driving down prices, and in some cases leaving farmers with few buyers” (Reuters, Nov. 3).
“About 65 percent of U.S. hemp farmers lack a buyer for their crop this season, leaving them few alternatives, according to a July survey.” A Whitney Economics hemp commodities pricing analyst summarized the effects: “People entered in on speculation. The results could be tragic for some small farmers.”
The Wall Street Journal recently confirmed (Nov. 3): “Farmers Rushed Into Hemp. Now They Face a Glut — Prices for the crops are falling, and some growers are struggling to unload their product.”
A record number of farmers grew hemp for the CBD market in 2019, and many encountered expensive regulatory setbacks. “For farmers trying to grow high-quality CBD flowers, getting a crop within the 0.3 percent THC window can be challenging. The two cannabinoids “move together,” so when CBD concentration goes up, so does THC (NPR, Nov. 16).
Unlike soybeans and canola, it's possible that hemp can go “from one day being a legal crop to the next day being an illegal crop, in terms of THC content.” Weather changes, along with hemp aging can also impact THC concentrations.
There is a growing oversupply of cannabidiol, or CBD. ���A massive oversupply in the CBD markets can lead to a violent crash by the end of the year” (Hemp Today, Sept. 25). The U.S. is currently growing “eight times more CBD hemp than can reasonably be consumed in the domestic market, there are clearly rough waters ahead.”
South Dakota farmers should keep eyes wide open regarding hemp market pitfalls. Legislators should insure overall benefits of any prospective hemp plan will fully justify the added burdens and cost incurred by state government in regulating the legal production, transport, and processing of hemp products.