Hemp is a new crop for many farmers in the Southeast. For states new to growing industrial hemp, such as Mississippi, growers interested in the market are left to navigate uncharted waters. The National Hemp Growers Cooperative's goal is to work alongside farmers to help them learn the business.
Nick Walters, one of the founders of the National Hemp Growers Cooperative, discussed the hemp market as well as how the cooperative plans to help those getting started in the hemp industry.
The co-op's roots
What seed will work best on your farm? How do you harvest hemp for CBD oil? How do you harvest it for fiber? These are just a few of the questions the cooperative plans to answer for those new to growing hemp.
"During my tenure as being state director of Rural Development, we had a whole division that helped to develop co-ops, and I learned a lot about how they worked," Walters said. "We started out wanting to put together a value-added hemp processing business for extraction to do CBD oil. That project, which was in Alabama, did not come together.
"Nevertheless, I started looking closely at the hemp industry and asking questions like, 'Who is going to buy your product and how are you getting paid back?' The more I looked into the hemp industry, the more I realized it's like the wild, wild West."
Due to the diversity of the plant, there is no one way to grow and harvest hemp. Also, unlike growing other row crops such as cotton and soybeans, there aren't as many resources on how to grow hemp for oil or fiber.
"If you're a state like Mississippi, growing hemp wasn't even legal until a few months ago," he said. "I knew that there were people who got burned starting out growing hemp. The more I saw misinformation in the hemp industry, I knew there was a need for a cooperative model to come together."
Walters along with Roger Ford, Max Howell, and Larry Tyler formed the National Hemp Growers Cooperative, which will become a member-owned co-op.
"We haven't yet formed the nonprofit entity itself, but we are currently connecting with a group of growers who are interested in being a part of the program as soon as it launches," Walters said.
"It will help anybody who doesn't want to learn the business alone. It will resolve questions like, who is going to buy my crop? What are you growing it for? Are you growing hemp for fiber? Are you growing it for CBD oil? This all needs to be figured out on the front end of the business."
Growing the co-op
The cooperative will work together on getting prices for seeds as well as educate about how to grow hemp.
"Ultimately, our main litmus test is building wealth for our members," Walters said. "If what we're doing is not building wealth, then that is not anything we're interested in. Our primary goal is to help our members' bottom line."
The cooperative will be doing everything from investments to retirement to money management to legal services to purchasing seeds and even sharing equipment.
"Another benefit will be helping navigate the markets," he said. "The hemp plant is so versatile, so finding out how to go from seed to shelf takes a lot of homework. We're trying to cut down the learning curve for our members.
"Let's say we've got a contract we have negotiated for X tons of hemp to be grown by Y date, and we're going to pay Z dollars per ton for that hemp. We can bring the information to our members and say, 'Who wants to grow this? Who wants to help us fill this order?' Now, they know they have a market for their crop before they have even planted it."
Another aspect of the cooperative is that each member is going to share in the dividends and any value added for any commercialization piece across the country.
"We are already developing a hemp commercialization facility in central Alabama," Walters said. "Our first venture is going to be a biofuels option where we are going to be turning renewable natural gas into bio-crude oil. Hemp is also going to be a part of this, including renewable natural gas and some fiber-based products we're going to produce."
The founders plan to do projects like the one in central Alabama throughout the country based on where their members live.
"It looks like the CBD oil market will be saturated for the next couple of years. Some extractors have oil sitting on their shelves," Walters said. "Some producers grew hemp and were told they would make a lot of money only to find out that buyers have already bought all the oil they can. There's an excess of CBD oil available right now."
Demand for CBD oil is still good, but there is an oversupply.
"Three years ago, it was the opposite," he said. "The demand continued to grow, and the supply was low. There were plenty of hemp growers who made a nice return on their investment. Unfortunately, there were too many others that planted and didn't have a contract in their hand before they went to plant. They assumed because there was such a short supply, they would be able to make the same money other growers had made a few years prior. Unfortunately, this wasn't the case."
There are good resources available for those interested in growing hemp for CBD oil such as the Alabama Extension service. However, growing hemp for fiber is not as widely known.
"Hemp fiber needs to keep growing while for CBD oil you're growing for the buds and flowers," he said. "You got about a 90-day growth period, and it's completely different on how you plant and harvest it."
The cooperative intends to offer information on the different ways to grow hemp for oil or fiber.
"BMW in Germany is using hemp fiber in the body panels of their cars," Walters said. "Think how neat it would be if in the future we were able to grow for automotive manufacturers in the Southeast.
"Our goal for the next 12 months is to do a series of test plots on a few acres to know how the seeds are going to grow in different areas. We are also going to learn more about harvesting. Some places grow hemp like hay and bale it up the same way. In other places, you need to know what kind of combine to use for the tougher stalk.
"With all our ideas for the National Hemp Grower Cooperative, we have plenty to do for the next several months. We are excited to see how the co-op grows and helps producers interested in hemp."