Average ROI of Hemp Biomass Per Acre

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When determining the ROI of hemp biomass per acre, it’s important to consider the type of hemp to be cultivated.

Hemp Farming Trends

Hemp is a fantastic plant with the potential to revolutionize the economy. More farmers than ever are turning to hemp cultivation as a lucrative way to grow a durable crop. According to Forbes, the number of hemp farms in the United States quadrupled in the past year.

Much of hemp’s success comes from its versatility. According to the National Hemp Association, “hemp can grow nearly anywhere in the world, in many types of soil, even in short growing seasons or in dry regions, and helps purify soil.”

In the best conditions, hemp can yield three to eight dry tons of fiber per acre. Additionally, it is often cheaper and more environmentally friendly compared to other crops because it requires no harmful pesticides.

Calculating Hemp Profits Per Acre

The price of hemp biomass per acre varies for many reasons. Most importantly, the return on hemp investments depends on the specific commodity at which the crop is targeted. Some estimate sales will reach $16 billion by 2025, with health and wellness products leading the way and food, beverage, beauty, and vaporizer products to also play a role.

ROI on Hemp Grain

According to Hemp Biz Journal, hemp grain averages $0.60 to $0.65 per pound and an acre of hemp produces about 1000 pounds of grain. After costs (usually between $300 to $350), hemp grain will bring in roughly $200-$300 per acre.

ROI on Hemp Fiber

One acre of hemp yields about 2.5 – 3 tons of fiber which sells for about $260 per ton. After costs, farmers can earn about $480 per acre profit. However, hemp fiber requires extensive processing and very few have the industrial capacity to do so.

The ROI of CBD Hemp Biomass Per Acre is Complicated

Despite the labor necessary to bring in a good harvest, hemp-derived CBD gives a much higher return than hemp fiber and hemp seeds. However, growing hemp for CBD requires very different conditions and more tedious labor practices.

Industrial Hemp is Not CBD Hemp

There is actually very little Cannabidiol (CBD) in industrial hemp. CBD primarily comes from flowers and industrial hemp is primarily male and therefore produces few flowers. Thus, very little CBD is harvested from hemp plants raised in an industrial cannabis setting.

“One Canadian certified industrial hemp strain produced an average of 0.6 percent CBD and 0.03 percent THC, according to a study overseen by Professor George Weiblen of the University of Minnesota, who has been studying cannabis since 2002.”

Calculating Hemp Biomass Per Acre

While hemp is lucrative, land prices vary. Hemp grown for cannabinoid production is the most lucrative. The current rate for cannabinoid-rich biomass is about $3.50 per percent of CBD. Those who grow a variety of hemp with an average 10 percent CBD content could make $35 per pound. Considering that an acre can produce about 1,500 pounds of biomass, CBD farmers could earn around $52,500 an acre.

As one Quora expert explains, “The 2018 crop should produce about 10 percent CBD content, and should bring about $25 to $35 per pound. With a yield of about one pound per plant and up to 2,500 plants per acre, that’s around $60,000 per acre.”

Understanding the Risks of Hemp Farming

Cultivating hemp is not without its risks. Prices for CBD made from hemp change sometimes on a weekly basis. Also, growing hemp is a labor-intensive process that includes clearing weeds and maintain the crop as it grows. Furthermore, the delicate hemp seeds need to be cared for prior to sewing. In addition, harvesting can be difficult and time-consuming. The nascent nature of the industry means that there are few standard practices for harvesting CBD hemp. Hemp grows quickly and must be harvested at the first sign of maturity, usually within two months after the flowering period starts.

There is also uncertainty about what hemp seed genetics could mean. Male plants, unfortunately, can lead to a significant loss of revenue and thus are not well-liked. One male plant can pollinate a large crop causing female plants to produce seeds which, in turn, lowers the plants’ CBD content. In addition, if crops contain too much THC they cannot be sold. Recent headlines abound with news of farmers having to destroy crops that tested too high for THC. Thus, we strongly encourage the use of reputable, female-only seeds when growing hemp for CBD. The amount of hemp biomass per acre of female-only hemp plants will witness a more positive return.

Hemp Farms: Risky But Worth It

Given the nature of the market, there is a considerable liability for hemp CBD farmers. However, it’s most certainly worth it. According to Insurance Journal, CBD oil is sold for thousands of dollars per kilogram which means farmers could theoretically make more than $100,0000 from their hemp biomass per acre. But that’s not possible with a grain and fiber variety of hemp which yields between $250 to $750 an acre.

If one farmer has 4,000 plants to harvest and each plant produces a half-pound of flower material that yields 18 percent to 20 percent CBD, the farmer 2,000 would have pounds of biomass to sell. If sold at $100 per pound that totals to a gross of $200,000.

Farmers, especially in Kentucky, are taking advantage of the boom since hemp grows well in the soil there. Most farmers in Kentucky seed 1,500 to 4,000 plants per acre based on a deal they made with a hemp processor.

Hemp Farm Insurance

Thankfully, hemp farm insurance will soon be available thanks to the 2018 Farm bill. A lack of insurance is a major issue in the industry. According to Hemp Industry Daily, the U.S. Department of Agriculture (USDA) is instituting the Whole-Farm Revenue Protection (WFRP) program for the 2020 crop year for hemp farmers producing hemp for fiber, flower or seeds.

The USDA’s Risk Management Agency (RMA) said the insurance will be only be available for farmers who are part of pilot programs by the 2014 Farm Bill. The WFRP program can provide provides coverage for agricultural commodities totaling $8.5 million and is common for specialty crops, organic commodities and nontraditional crops. Once the USDA releases production rules, more protection will be available.

Hemp’s Versatility Makes it a Hot Commodity

Hemp has many uses. It can be made into paper and paper-derived products such as cardboard, packaging, and textiles, rope and clothing.

Hemp is also very durable. It has been used to make a concrete nicknamed “hempcrete” which can be used in construction. It has also been used to make a substance comparable in strength to iron or steel which can be made into car parts.

In addition, hemp oil can be made into soaps and lotions. Many have sought to market oils for their medical benefits, though that is up for debate since it has not been sufficiently studied due to its ban during the War on Drugs.

Its farming was approved by the Farm Bill which was signed into law last December. Hemp grown must have less than 0.3 percent THC, the psychoactive ingredient that causes those who ingest it to “get high”.

Increase CBD Hemp Biomass Per Acre With High-Quality Feminized Hemp Seeds 

Hemp is a viable product that will transform farming and industry within the United States over the next few years. While the yield varies due to the quality of seeds and weather, it is undoubtedly a lucrative industry.

Continue at: https://www.fortunahemp.com/average-roi-of-hemp-biomass-per-acre/

 

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Manostaxx
Manostaxx – Industrial Management Consulting

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