The U.S. industrial hemp sector experienced a significant decline in 2022, with the total value of hemp production plummeting by 71% to $238 million, according to the USDA’s 2023 Annual Hemp Report. The value of hemp grown in the open and under protection fell by 70% and 77% to $212 million and $26.1 million, respectively.
“The decrease in committed field production should come as little surprise as the reality continues to reconcile with the hype,” said Vermont-based consultant Joel Bedard. “This very simple data is directly proportionate to the traditional financial investment as well.”
National planted area for all utilizations decreased by 48% to 28,314 acres in 2022. The area harvested for all purposes in the open fell by 45% to 18,251 acres. Floral hemp production in the open dropped by 66% to 6.78 million pounds, with a 56% decrease in harvested area, totaling 7,105 acres. The value of floral hemp grown in the open declined by 71% to $179 million.
Grain hemp production in the open shrank by 44% to 2.43 million pounds, and its value dipped by 39% to $3.63 million. The area harvested for grain hemp reduced by 35% to 5,379 acres. Fiber hemp production in the open declined by 37% to 21.0 million pounds, with a 46% decrease in harvested area, totaling 6,850 acres. The value of fiber hemp grown in the open contracted by 32% to $28.3 million.
Seed hemp production in the open saw a 92% reduction to 146,000 pounds, with the harvested area decreasing by 77% to 812 acres. The value of seed hemp grown in the open plunged by 96% to $1.48 million.
In 2022, hemp growers utilized 4.58 million square feet under protection for production, a 71% decrease from 2021. The production of hemp clones and transplants grown under protection declined by 94% to 1.26 million plants, with their value falling by 97% to $738,000. Floral hemp production under protection dropped by 66% to 105,238 pounds, with a value decrease of 62% to $24.7 million. Hemp grown under protection for seed contracted by 64% to 1,476 pounds, and its value fell by 98% to $576,000.
“The USDA and NASS report clearly shows there is a real hemp war going on in the USA. Many states are enacting very conservative illogical regulations and fees on hemp foods and non-psychoactive hemp CBD products,” said Chris Boucher, CEO at California-based Farmtiva, a hemp ag services company and CBD consultancy. “This discourages new hemp startup companies, which affects farmers and others who may want to enter the hemp marketplace.”
As the industry faces these challenges, some experts believe that structural changes and government incentives are needed to help the hemp sector develop. Chicago-based attorney Sanford Stein of CannabisLaw.com stated, “As Congress considers reauthorization of the Farm Bill this year, it must include incentives for the hemp industry, just as it does for corn and other crops.”
Colorado hemp consultant Richard Rose suggested focusing on food from grain as a more logical play for the future. “If we’re serious about making hemp a success, that’s the low-hanging fruit,” he said.
Editor’s Note: Texas Hemp Growers has long warned that as industrial producers pushed legislators to crack down on CBD cultivators and end markets, that it would invariably hurt the whole industry. This USDA report on the state of hemp cultivation in the US seems to validate our concerns. In the wake of numerous states banning critical hemp markets, and the federal government now talking of the same, not only has hemp cultivation for CBD plummeted by 71%, but grain and fiber operations have also plummeted by 40%. It was illogical to ever think that cracking down on CBD would push those farmers to grow industrial hemp. Instead, any experienced farmer would avoid hemp like the plague, seeing how it’s been attacked by their peers and legislators at every turn. Why would a grower invest their life savings only to have punitive legislators and salty producers destroy their business in a year? But many industrial producers have used their platform to attack and demonize the CBD industry and encourage this anti-CBD environment. The unfortunate reality now is that the whole industry may be doomed to fail.