Hemp Harvest 2019: Six ways farmers may still profit this season

Farmers across the United States who produced hemp this year are using any means necessary to sell crops that are either still waiting in their fields to be harvested or drying postharvest.

From posting hemp for sale on LinkedIn to working with brokers, farmers this season are looking for strategies to profit from hemp even if they didn’t secure buyers before planting. Others are looking for additional buyers.

Experts say that profit opportunities aren’t lost even for those who haven’t yet sold their hemp crops – as long as cultivators are able to harvest and take steps to protect their hemp from dampness, mold and other potentially ruinous dangers.

Hemp Industry Daily talked with hemp experts across the country to find out the best strategies to optimize profit from growing hemp in 2019.

Here are six they suggest:

1. Preprocessing and storage

First things first, farmers must get their hemp off the field and dried before it can be sold.

Joel Bedard, CEO of The Vermont Hemp Co. in Corinth, Vermont, recommends hang-drying plants in clean, well-aerated barns.

“If they can keep it together for a couple of months, I think we’re going to see the demand start to peak, probably by the end of this year,” Bedard said.

Next, farmers who can’t sell their raw crops immediately or get them to an extractor should try to do as much preprocessing as possible to buy themselves some time, he said.

Preprocessing machines that can help include:

  • Buckers, machines that strip the biomass off the stalk.
  • Hammermills, which grind the biomass.
  • Pelletizers, which press milled hemp into pellets that can be stored.

Preprocessed dry material can be stored in large white sacks or totes and plastic bins until farmers find a buyer or an extractor for further processing, Bedard said.

But even well-stored, dried material shouldn’t be kept beyond six months, Bedard said.

2. Processing to crude oil

Farmers who can get their hemp to an extractor for processing should try to have it processed into winterized, decarboxylated crude oil.

That’s because it’s the most efficient way to condense the crop for a longer shelf life while preserving cannabinoids and terpenes that can degrade with heat and light exposure, according to William Goodall, CEO of Denver-based Eco Extract Labs, a company that works with smaller farmers to process and sell their crops.

“The sooner that you can extract it and get it into a concentrated oil and then sort in a barrel, preferably a cool location, the more you’ll get out of your plants,” Goodall said.

Farmers may have the option to do a tolling split, in which the farmer pays for processing. But they should pursue this only if their team has the bandwidth to market it, according to Julie Lerner, founder and CEO of Denver-based online trading platform PanXchange.

“In some cases, the processing facility will sell the oil and then share the profit with the farmers, so it can go either way,” Lerner said.

However, most processing centers or extraction facilities are at capacity and can’t handle or buy any additional crops, Bedard said.

That could change as demand increases, which is what happens in more mature markets, according to Lerner, who added that there is no guarantee that prices will increase.

3. Network, network, network

Some farmers have found that posting photos and details of their crops on social media can help move preprocessed material.

Wesley Ray, co-founder of Combined Hemp in Bend, Oregon, actively posts photos and updates from his farm on LinkedIn.

“Comments turn into (direct messages) and then eventually farm visits,” said Ray, who noted he has two visits lined up in the next week based off LinkedIn connections.

But it’s not easy out there, said Allison Justice, co-founder of The Hemp Mine, a South Carolina CBD wholesale company. Justice recently posted hemp crops for sale from a farmer in Kansas.

“It hasn’t been very useful, to be honest,” Justice wrote in an email to Hemp Industry Daily.

Justice’s business partner, Travis Higgenbotham, agreed – with one caveat.

“For gaining brand awareness and attention from prospective customers and interested parties … that’s a different story,” he said.

Farmers selling on social media must be wary.

“If someone asks for tens of thousands of liters or kilograms (of product), you should just hang up the phone,” Eco Extract Labs’ Goodall said.

4. Online hemp exchange platforms

Crops can be sold and purchased in a variety of forms through online exchange platforms, which vet buyers and sellers.

Companies offering online trading platforms include:

  • The Hemp Marketplace, which began operating two years ago.
  • Hemp Exchange, which began facilitating deals in March.
  • PanXchange, which opened its online trading platform in August.
  • Swissx Bank of Cannabis, a cryptocurrency exchange that includes a hemp-trading platform and launched in July.
  • Kush.com, a marketplace and events company that launched this summer.

5. Live auction

Auctions are another sales avenue.

While common for commodity crops such as tobacco, auctions are new to hemp and give farmers another way to sell their crops.

For example, a hemp auction planned next month in Nashville, Tennessee, touts the ability to see and sample help before buying.

But auctions bring other unknowns, said Lerner.

“As far as sampling, who’s to say you didn’t grab the jar of bud off from your neighbor’s car?”

Even if a sample is genuine, “that’s not a guarantee that the entire (lot of products) are that quality,” she said.

“You need to be able to focus more on negotiable terms than sight, smell and sample.”

6. Stay aware and be smart

Savvy marketing is key to getting the best price, and it’s critical to stay informed on prices, demand and processing bottlenecks, Lerner advised.

Farmers shouldn’t be afraid to ask potential buyers tough questions about how long their businesses have been around – or for proof and references for verification.

Finally, farmers should consider selling close to 80% of their target price and not wait for something better.

“A rule of thumb in trading is, never try to pick market bottom or top – you’ll miss it,” Lerner said.

Silver linings

Bedard, the Vermont hemp business owner, said trading challenges faced by hemp producers this year may not be as dreary as some feared.

Despite the widespread worries of a glut of hemp produced for CBD, Bedard said he’s not convinced there will be an oversupply this year. That’s because of weather-related crop loss and inexperienced farmers who may not get their crops out of the field.

“We’re probably not going to (see) anywhere near as much quality product as people thought,” he said. “I think the processing will be able to handle it, but it’s going to need to be stretched out.”

Laura Drotleff can be reached at [email protected]

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5 comments on “Hemp Harvest 2019: Six ways farmers may still profit this season
  1. David Harde on

    Hi Laura,

    Thank you for the informative article on the post harvest handling of hemp. I understand more fully the post harvest process of hemp. We are a 1 acre, first licensed, hemp cultivator in El Dorado County, California. As our CCOF certified, USDA organic hemp is currently drying, our post harvest preservation and marketing plan is evolving. Building the ship as we are sailing, so to speak!

    Cheers!

    Reply
  2. mike on

    is it worth the time and will any one make any thing off this is my concern . it’s not a new business hemp has been around for as long as america a well as the processes (not so much extracting oil as for consumables) this we know but is there enough people who can buy this equipment or product within reason or will this just be another big hit for farmers that today are having a hard time making even enough to pay for their crop then cannot find a market with in a few months i know most crops are sold before their even planted today sounds a bit risky as of today to put your self and family out there on a whim that this may help make a profit.. i do hope it’ works out i am also a farmer we grow hay but it’s a known process and we still struggle at the end of the year and in spring when it’s time to get fuel and equipment up to speed just don’t know if this is a viable option for farmers yet …that are already struggling

    Reply
    • David on

      I understand both your frustration and hesitation. Starting with 1 acre is smart. You probably learned a lot your first year.

      Reply
    • Jordan on

      What are your options to move up from the issues you experience with your current operations (hay)? Do you wait for variables outside of your control to bring up prices, where you’re not struggling during the winter and spring? Or do seek out other options- go on the offensive- so to say and figure out a new game plan that brings you into a better farming situation? My background: not a farmer, but live in the heartland of row crop operations. A lot of farmers are struggling, what’s the solution? I think the greatest show of strength is for the farmers to get it done themselves, no subsidies, we all figure it out.

      Reply
  3. Daniel Fantz on

    I think this Industry will shake it’s self out. but to be there when it does You have stay on the pony.
    watch, look,listen,and protect your self. if you cant sell your convert into oil the set on it. at least you have an asset that won’t deterioate as time go’s by.

    This is just an observation of the chaos.

    Reply

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