The University of Missouri Extension developed four guides to help farmers plan for growing hemp. The Missouri Department of Agriculture will open applications for grower permits starting Dec. 2.
The four guides created by Ray Massey, MU Extension professor in ag business and policy, include planning, agronomy, budgeting and marketing. The budgets included with these guides also come in a free, downloadable Excel spreadsheet. The entire guide provides more information on agronomic considerations before planting.
Industrial Hemp for Grain Planning Budget. This budget is for farmers who want to grow hemp for grain. It offers income estimates based on October 2019 prices of 70 cents per pound. Overall operating costs are estimated at $270.35 per acre. Not including machinery and land, the budget shows farmers clearing almost $430 per acre. All the calculations are done based on 40 acres.
Industrial Hemp for Fiber Planning Budget. Farmers interested in growing hemp for the fiber market can plan with this guide. Since this is Missouri’s first year with industrial hemp, the budgets used information from states such as Kentucky, Tennessee and North Dakota. Income and costs with this budget show farmers profiting $250 per acre, not including land and machinery. Adding in those ownership costs and farmers see just a $77-per-acre profit.
Industrial Hemp for Grain and Fiber Planning Budget. Massey also created a an excel spreadsheet guide for producers looking to grow hemp for both grain and fiber.
Industrial Hemp for CBD Planning Budget. By far, growing hemp for CBD is the most lucrative, but also the most time consuming for farmers. And most of the time, this is not done on 40-acre plots, but on a much smaller scale. Still, Massey ran the numbers for growers. He found that income over operating costs per acre was near $8,000. Income over total costs including land, machinery, drying, storage and irrigation was near $5,600 per acre. Massey says there is still volatility in the market when it comes to CBD prices.
Massey believes farmers will likely lean toward growing industrial hemp for fiber or grain, as they will find these production systems more in line with their existing equipment. Labor needs for growing industrial hemp for fiber or seed are also similar to conventional crops, he adds.
Industrial hemp presents risk. There has been much industrial hemp grown in the U.S. this year, with limited processing capacity currently available from many startup businesses, according to Massey. Farmers should secure a contract before planting and make some safeguards that the company will fulfill its end of the contract.
Also, harvesting hemp is more difficult than traditional crops. Producers should budget for additional equipment costs.
The MU Extension industrial hemp budgets are part of a comprehensive industrial hemp feasibility study to be publicly released in December. The study was funded by the Missouri Agricultural and Small Business Development Authority and commissioned by the producer steering committee that formed the Missouri Hemp Producers Association.
Find the free, downloadable MU Extension industrial hemp planning budgets and guides on the MU Extension website on its Hemp page.