Evaluating the U.S. Hemp Market: From Producers to Consumers

Grants and Contracts Details

Description

Since the reauthorization of hemp production through state pilot programs in the 2014 Farm Bill, U.S. industrial hemp acreage has grown from zero to over 54,000 acres in 2021 with an estimated production value exceeding $800 million (USDA NASS, 2022). The 2018 farm bill put in place a national regulatory framework and USDA published a final rule for hemp production in March 2021 that standardized U.S. hemp production licensing and testing, and also enabled USDA to develop insurance, conservation, direct loan, and other farm programs specially tailored for hemp producers. Yet, despite the rapid growth in domestic production, relatively little is known about this emerging industry and its market in particular – with much of the current literature focusing on regulatory hurdles to hemp producers and outcomes observed in state pilot programs (Malone and Gomez, 2019; Ebert et al. 2020; Mark et al. 2020). The lack of market information poses many challenges to the U.S. hemp industry and its stakeholders. Without transparent market information, it is difficult for producers to obtain the best price for their product, for lending institutions to extend credit to producers, and for partner agencies to support producers through administration of federal programs (such as crop insurance, the Farm Storage Facility Loan Program, and FSA credit programs). Additionally, more than half of U.S. hemp producers are beginner farmers, and this group has been identified as being among the most vulnerable to financial stress (USDA NASS 2022; Katchova and Dinterman 2018). This highlights the need for timely economic research on hemp markets to inform current and prospective growers as well as policymakers and industry stakeholders. In partnership with university collaborators, researchers at USDA can play a critical role in meeting this need.
StatusActive
Effective start/end date9/30/229/30/24

Funding

  • Economic Research Service: $140,000.00

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