CNS Canada — With a large carryover from last year’s crop, hemp acres in Canada are expected to be down this year along with the price.
“We had a bit of overproduction in 2017. It doesn’t take much to overproduce a crop when you’ve got 100,000 acres. So it’s a delicate, delicate balance,” said Russ Crawford, president of the Canadian Hemp Trade Alliance (CHTA) and a Calgary-based director of B.C. hemp processor Naturally Splendid Enterprises.
Even with the oversupply, there are producers who will be starting to grow hemp. Winnipeg-based Fresh Hemp Foods, for example, has contracts for this year with a small number of new growers.
“There are people that are still discovering the crop and looking at ways to include it in their rotations,” said Clarence Shwaluk, director of farm operations for Fresh Hemp Foods.
Even with a price lower than in years past, farmers can still get a sizeable return from hemp — and pricewise, he said, it’s comparable to growing canola.
“Even though the price has corrected there still is profitability in this crop,” he said. “We think that’s going to continue to attract growers.”
According to Crawford, conventional hemp prices have dropped about 20 cents this year, to around 55 cents/lb.
“It was crazy good before so there’s still incentive to produce hemp but certainly at a lower number perhaps than in previous years,” he said.
While conventional prices have dropped, organic hemp prices are still higher, at around $1.80-$1.85/lb., according to Crawford.
“We expect higher acres in organic versus what we did in 2017,” he said. “We will see some growth on that side of things and very little carryover on the organic side.”
For conventional, there have been some changes on the international marketplace. Canada used to sell a lot of hemp to South Korea, but China has started exporting there at a lower price — another reason Canadian prices are lower this year.
“The consumption of hemp in South Korea has dropped and it’s also been displaced by seed from China,” Crawford said.
Crawford said he has also heard rumours of Chinese hemp making its way into the Canadian marketplace, but doesn’t think that’s the case as he hasn’t seen any news in government reports about Chinese hemp seed imports.
However, he said, he does think Chinese hemp seed is making its way into the U.S., one of Canada’s main marketplaces.
State-level laws have also been changing in the U.S. to allow for production of industrial hemp, but there aren’t a lot of processing facilities stateside, which could lead to U.S. hemp seed making its way into Canada to be processed.
“Our exports to the U.S. are down quite a bit this year as well, and so we’re in a competitive state,” Crawford said.
Australia last fall approved hemp for human consumption, where previously it had only been allowed for pet food.
Naturally Splendid Enterprises was the first company to ship a container of hemp food product into Australia, while Fresh Hemp Foods is now in contact with potential customers there.
Canada’s hemp industry is also part of the Protein Industries Canada supercluster, one of five chosen last month to share a five-year, $950 million federal funding commitment. The CHTA is optimistic this could help to grow the industry.
— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow her at @ashleymr1993 on Twitter.