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Kentucky Hemp Summit speakers preach caution




Indiana Correspondent

LOUISVILLE, Ky. — The message – loud and clear – from each speaker at the Kentucky Department of Agriculture’s first Hemp Summit on Dec. 4 was cautious optimism.

Ag department Commissioner Ryan Quarles provided an overview of where the state stands in terms of hemp production to kick off the event.

“There are a lot of growers and processors who took the risk to make hemp great again – and Kentucky took the lead,” Quarles said.

In the 1900s, 75 percent of the hemp produced in the U.S. came from Kentucky, and with the passage of the 2018 Farm Bill and the work done in Kentucky, the state has the opportunity to be first again, he said.

The state saw about 26,000 acres planted in 2019 and some of those acres are still being processed. That’s up from 33 acres in 2013. About 750 people have started the application process to participate during the 2020 growing season.

Quarles recognized Doris Hamilton who leads the hemp team at the Kentucky ag department, calling her the “queen of hemp” across the U.S. He said she has advised 46 states this year.

“We continue to learn about what we need to do to improve the program,” Quarles said. “It’s worth noting, here in Kentucky, we have gotten zero dollars for the program from the General Assembly. The program is run because of your enthusiasm and success.”

Admitting there is work to be done, Quarles said relationships, trust and networks need to be built to be sure hemp is treated like other agricultural commodities.

“The bottom line – don’t risk more than you’re willing to lose,” he said.

He also outlined several glitches that need to be addressed – including a need for working capital, glitches with transporting hemp products and materials across state lines, work with the EPA on pesticides in the pipeline for approval, in talks with the FDA, in contract disputes between farmers and processors, a lack of product standards and more.

“We’re in a unique position to advise the USDA. Reach out to our department to be sure we continually improve,” Quarles said.

“It’s like building an airplane while you’re flying it.”

Also speaking was USDA Under Secretary Greg Ibach who said Kentucky regulations have provided a model for the USDA’s Interim Final Rule on hemp.

“I think it will be a pretty easy transition for you moving from Kentucky regulations to the federal guidelines,” Ibach said, adding the USDA has spent a lot of time talking with farmers, processors and consumers.

He said the Interim Final Rule is a way to get regulations on the books quicker, adding the process usually takes 18 months to two years.

“We don’t have that kind of time,” Ibach said. “We’re in a comment period now, so there’s still an opportunity for interaction. We will reopen the comment period at the end of the (2020) season and release the final rule for the 2021 season.”

He cautioned that rule doesn’t regulate processors, labeling or marketing claims – all three are under the jurisdiction of the FDA.

Ibach said one issue that has come to the forefront this season was that production ramped up, but the processing didn’t as quickly.

“We’re stressing to farmers that they need to manage their risk. Be sure you have an outlet for your product at the end of the season.

“I think we have great opportunities for processors.

“Kentucky has a more mature industry than any other state in the nation. I think you will see states starting to specialize according to the type of crop they can grow,” Ibach said.

“I have optimism for hemp, for another crop farmers have to choose from to diversify their operations.”

Bob Pearce, an Extension professor at the University of Kentucky, has a background in tobacco research and has transitioned into hemp research. His topic was basic agronomy for growing hemp, although he said he could only begin to scratch the surface in 30 minutes.

Pearce said there are three major production systems - “how you grow it depends on what you want to do with it.”

Growing for fiber can be done with low inputs, seeded at a high density, harvested mechanically with marginal returns per acre, and needs to be close to processors.

Growing for grain-seed oil can be done with moderate inputs, seeded at moderate density, harvested mechanically with a moderate return potential.

Growing for floral material (CBD) may be directed seeded but is mostly transplanted. It requires an all female plant population and high labor costs for weed control. Input costs are high at $1-2 per feminized seed or $2-8 per clone. It’s typically harvested, dried and processed by hand. The return is potentially high.

Pearce went on to dispel some common myths about growing hemp, including:

- Hemp will practically grow itself.

- It thrives on marginal soils.

- It does not require fertilizer.

- There is no need for weed control.

- There are no insect pests.

- There are no disease problems.

- Hemp will be a direct replacement for tobacco.

Other challenges faced by producers include a lack of appropriate varieties for the Kentucky climate, tightly-controlled genetics, poor seed quality and limited pesticides available for hemp.

His advice: “Start out small. Get a contract with a processor. Research the processor before you enter into a contract and know the terms of the contract.”

And echoing the advice of every other speaker: “Don’t spend more than you can afford to lose.”

Economist Will Snell from the University of Kentucky focused on the broad picture saying there’s a lot of uncertainty and volatility in hemp’s economic future.

“What we know is consumer demand is growing and Kentucky farmers have the resources and the skills to produce this crop. Ultimately, for hemp to be cost competitive, consumers have to be satisfied with the product’s benefits and it has to be affordable, and farmers have to have a profitable crop with access to inputs and trusted buyers,” Pearce said.

“While product demand is increasing, in the short term, we’ve increased production beyond the potential demand. We have an excess supply situation. One thing we do well is that we learn how to overproduce.”

Pearce quoted someone else for his bottom line on the outlook for hemp: “The long-term prognosis is generally favorable across a range of product categories and downstream markets, but the road getting there is likely to be a rough-and-tumble ride, with as many losers as there will be winners.”

He urged his audience to “educate yourself, examine the integrity of everyone in the sector and evaluate your own risk/reward tolerance.”

Other speakers discussed tips for organic hemp production, research efforts at Western Kentucky University, availability of USDA crop insurance, the legal landscape for hemp production and a summary of the Kentucky licensing program.


Kentucky Hemp Summit speakers preach caution

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