hemp field
Kern County farmer Travis Fugitt plans to grow 600 acres of hemp this year, all for CBD extraction. (Photo: Anton Watman / Shutterstock.com)

By Ching Lee, Assistant Editor, Ag Alert

Reprinted with Permission from California Farm Bureau Federation

The buzz about industrial hemp becoming the next big cash crop didn’t last.

Kern County farmer Travis Fugitt examines a hemp plant during the 2021 harvest season. He plans to grow 600 acres this year FUGITT

Soured by the heavily regulated nature of the crop and market instability, farmers who dabbled in growing hemp say they’re bowing out this season, choosing to go back to farming more traditional crops.

This comes four years after the 2018 Farm Bill legalized the production of industrial hemp. Since then, the crop has experienced some growing pains.

Much of the hemp that’s been grown in the state and across the nation has been focused on the production of cannabidiol, or CBD, which is marketed as a health and wellness product and as a potential treatment for a range of conditions.

With hopes of cashing in on a newly legal crop and demand for CBD, farmers rushed to plant hemp. Now they face an oversaturated market and lower prices. Some are plowing under their crop or storing it until they can find a buyer.

California farmers planted 2,650 acres of hemp last year, according to the U.S. Department of Agriculture. Nationwide, acreage totaled 54,200.

Some farmers are trying to move beyond CBD, eager to return to hemp’s roots and a broad array of products.

“The market can only bear so much CBD. That’s why it’s busted,” said Sutter County farmer and hemp grower Justin Eve, who serves on the state Industrial Hemp Advisory Board. “But the market can bear livestock feed, textiles, clothing, oil, and paper products.”

Kings County farmer Tom Pires, who also manages a cotton gin in Riverdale, has been working with a hemp supplier in experiments growing hemp for fiber. A converted cotton gin is processing the hemp, keeping employees working as state cotton acreage plummets from historical levels, Pires said.

His goal, Pires said, is to grow hemp for seed to get the best varieties and cultivars for the San Joaquin Valley, then get farmers to grow hemp for fiber.

Shay Martinez, a hay broker in Kings County who’s working with Pires to develop hemp fiber markets, said she worries about declining hay acreage and its impact on her business. As farmers grow less of it, she is exploring “where hemp can lead.”

Pires said he’s already selling hemp products from his experimental plantings, and Martinez is marketing some of the fibers as animal bedding. But to get farmers interested in growing hemp fiber, Pires said he’s looking for contracts and buyers who are willing to pay some costs upfront.

After “an incredibly poor experience,” including not getting paid for some of his work, Kern County farmer Greg Tesch said he will consider growing hemp again only on contract. Until then, he’s focused on peaches, cherries, and other crops.

“We are farmers; we like to gamble, but there’s no more gambling in the hemp thing,” he said.

Regulations for growing hemp are challenging, farmers say, and can discourage them from growing it while stifling the growth of hemp markets. Besides various rules for planting, growing, and moving crops that California farmers already follow, hemp growers are subject to hemp-specific requirements in state and federal law.

Under federal law, industrial hemp cannot contain more than 0.3% THC, the cannabis compound that gets a person high. Crops that test higher must be destroyed. Counties are responsible for testing the crop for THC prior to harvest.

“It makes it really difficult for the grower,” said Sutter County Agricultural Commissioner Lisa Herbert. “They have their CDFA program that they’re responsible for; that’s all the laws and regs. But then the county can put additional restrictions or fees on them.”

Sutter County has its own hemp ordinance and fees because its contract with the state recovers only $12,000 annually, though the program costs $100,000 to run, Herbert said. The county ordinance allows her to charge growers a license fee on top of the $900 state registration fee.

With “all the testing, all the rigamarole” and having to go through a background check, Plumas County farmer and rancher Dave Roberti said hemp regulations seem set up “to find you in criminal contempt.”

“It makes you feel like they think you’re a drug dealer of some kind,” Roberti said. “It’s just frustrating to have a deemed agricultural crop be treated so different than anything else.”

While jumping through state and federal regulatory hoops is difficult, Roberti said he is also discouraged by the lack of markets for hemp, which makes it “not worth the risk of going through all the hassles.” He said he won’t be growing any hemp this year, though he said he would reconsider if the market turns around.

A key reason for the current glut on the market, said Imperial County grower Chris Boucher, is “we built the car, and the engine really isn’t ready yet”—with the engine being infrastructure, processing facilities and investments. “On top of that (is) the regulatory nightmare that’s being imposed on farmers,” he said. “Nothing is straightforward.”

Boucher is known as a pioneering figure in the hemp movement. He first grew hemp legally in 1994 at the USDA Research Station, only to see enforcement agents tear it down. He went on to help craft and promote legislation for legal cultivation.

These days, he grows hemp in the Imperial Valley and sells hemp seeds and juice powder as a superfood ingredient. He calls hemp “the greatest crop that’s happened” and said regulators should be “rolling the red carpet out and helping farmers” rather than “treating (hemp) like it’s radioactive and dangerous.”

For Derek Azevedo, executive vice president of Bowles Farming Co. in Merced County, times are different now compared to when Congress legalized hemp in 2018. He noted how farmers struggled with low commodity prices from 2017 to 2019, with many of them “eager to find something that they could grow profitably.”

“A lot of folks would be less likely to take a flyer on hemp today,” he said, because crop pricing is higher and input costs are far more expensive. “You’re risking more chips on the table today.”

Bowles Farming planted an experimental crop in 2019 to explore whether hemp would be a good fit for the operation. Azevedo said he learned the industry was too undeveloped and markets for the crop too undefined. The risk was too big, he said, so the farm never went further.

Others, such as Kern County farmer Travis Fugitt, have found a place for hemp. Fugitt, who also farms other field crops such as cotton, corn silage, alfalfa and wheat, will be planting 600 acres this year, all for CBD oil extraction.

With this being his fourth year growing hemp, he has refined the process through mechanization with an automated transplanting system that he said will reduce labor costs. Even so, he said the business is “down to nickels and dimes on the profit margins,” with “not a lot of room for error.” What’s made it work for him, he said, is his crop has been “planned, marketed and sold before it’s planted, so we’re not hoping that someone buys our stuff.”

“I don’t see that I have a lot of competition,” Fugitt said. “Everybody that was attempting it already is out of the game. I feel bad for everybody that got caught sideways, because there was a lot of hopes and dreams.”

With less hemp grown last year and even fewer acres expected this year, Roberti in Plumas County said inventory is beginning to dry up.

He and Fugitt have already fielded calls from buyers looking for hemp biomass for CBD extraction. Roberti said, “That market’s starting to come back a little bit.”

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