CBD News Blog – Anyone who follows the hemp market is aware of how prices have collapsed under the weight of too much supply and not enough demand. But what if demand increased not from new recreational pot users and health conscious consumers, but from animal feed providers?
An economics consulting firm is projecting that could happen as a growing share of hemp acreage could become devoted to grain products used for livestock feed.
For some background, there are now 22,473 cultivation licenses in the U.S. representing 494,374 acres, according to a new study by Whitney Economics. That number had dropped by 27,820 acres in 2019, but has seen an increase in farmers.
Price declines forced many farmers to either plant less or plow under what had been planted, since the cost to harvest was higher than the price that would be paid for the crops. A lack of clear guidance on insurance left many farmers without the ability to purchase crop coverage and the delay from the Food and Drug Administration on regulatory language has also placed a burden on the industry. Investors have been pulling away, as many farmers either give up or scale back considerably.