Earlier this year, we examined some of the opportunities and challenges facing the nation’s new hemp fiber sector; a sector that, along with hemp grain, many industry observers believe will be the future of hemp agriculture. Despite high hopes and optimistic projections for the fiber portion of the hemp industry, there are a wide variety of challenges that cultivators and processors must overcome if hemp fiber is to evolve into an economically and environmentally sustainable part of the United States economy.
The potential of hemp fiber and grain (that is, hemp seeds intended for consumption and not for planting) is well-known. In mid-September, in response to a request from the White House Domestic Policy Office, the National Hemp Association (NHA) released an economic impact report regarding the potential of a sustainable hemp industry in the U.S. According to the report, the domestic hemp fiber and grain sector is projected to have a $32 billion “impact” by 2030. The NHA report works on the assumption that, with enough education and investment, hemp could become another rotational crop for American farmers.
“In 10 years, converting just 5% of those fields to include a rotation of hemp will translate into 10-12 million acres of hemp,” NHA Executive Director, Erica Stark, who oversaw the study, said in a press statement. Stark added that, in order to process a fiber hemp crop of that scope using current technologies, more than 500 “decortication campuses” would be needed across the country.
Industry insiders interviewed by Hemp Benchmarks suggest that hemp fiber faces several hurdles it must clear for a viable market to develop. They include:
“If you talk to a lot of academics, I think that they see a very strong long term potential for fiber production and [fiber hemp] being a viable crop for the U.S. market,” Craig Schluttenhofer, Research Assistant Professor of the Natural Products Agriculture Research Development Program at Central State University in Ohio, told Hemp Benchmarks. “But I think they’ll also tell you that we’re not to that point yet.”
According to Schluttenhoffer, who has been researching hemp for more than seven years, one of the biggest issues is the sheer amount of hemp fiber plants that will be needed to establish a successful new industry. “It’s going to blow the hemp flower market away in terms of the volume required,” he said. “While hemp flower can become profitable at an acre, with fiber production you really need at least five acres of a good yield crop to be at around the break-even point. You’re looking at large-scale agricultural production, with 50, 100, 200-acre fields in order to capitalize on the price points that you’re going to get for hemp fiber.”
And post-harvest, he noted, even a small hemp decortication facility will need thousands of acres worth of hemp fiber to stay afloat economically. Then there is the issue of having a buyer for all the processed hemp fiber. “Unless you have a buyer lined up who you’re going to sell it to, it doesn’t make sense to just go and get a decorticator and start,” Schluttenhofer noted. “It has to be a very well-thought-out endeavor to be successful. And that’s where some of these companies have run into some of those challenges. The problem here is really building the full supply chain at once.” He concluded with a phrase familiar to many in the hemp industry: “It’s a chicken and egg issue.”
Schluttenhofer also cautioned that more research is needed to develop the cultivars required for successful hemp fiber crops in the U.S. At issue, he said, is developing different varieties of hemp fiber for the wide range of climates found across the country.
“I think this is still really in its infancy for the U.S,” he noted, “because the raw fiber varieties out there, they’ve all been bred in Canada or they’ve been bred in Europe. So they’ve been adapted to latitudes much higher than most of the U.S. In fact, if you move a plant adapted to a higher latitude to a lower latitude, it’s typically going to flower much faster. So you’re not going to get the height.”
In terms of the approach to planting hemp for fiber production, Schluttenhofer said, ”you’re going to the opposite extreme of what most people are doing for their flower production, which is very manual, low plant density, trying to get fat, bushy plants. With fiber plants, you’re packing these plants in really, really close together.”
“From my experience,” he continued, “you’re wanting 20 to 30 plants per square foot of space, on average, to force them to grow as tall as possible. But you also want to keep that stem diameter small, and that’s because there’s two components of that stalk: There’s the fiber on the outside and the woody hurd on the inside. The smaller [stalk] diameter actually maximizes the proportion of fiber relative to the hurd. Fiber is the more valuable component of the two. It also makes decortication easier if you have less hurd present.”
Some hemp advocacy groups and hemp trade organizations are working with hemp fiber stakeholders. There is also assistance coming from state and federal officials. In Missouri, for example, the state department of agriculture recently announced new funding for hemp fiber processing, with grants of up to $200,000 to reimburse expenses “associated with the expansion of processing capacity for industrial hemp in Missouri,” as part of an effort to expand and build out the state’s hemp fiber processing infrastructure. On the federal level, as we reported in a September Hemp Market Insider article, the U.S. Department of Energy recently announced it was awarding a fellowship, via its partnership with the Oakridge National Laboratory, to Hempitecture, an Idaho-based company that specializes in sustainable building materials.
However, according to Ken Anderson, CEO of Legacy Hemp Holdings in Wisconsin, the key to expansion of the hemp fiber sector is industry acceptance. “You’re going to get a lot more movement and a lot more advances if you get industries that can use hemp as an input into their products,” he told Hemp Benchmarks.
Legacy Hemp Holdings is the parent company of a certified seed business, a hemp products line, and a natural building products division. Anderson said that, rather than wait for a hemp fiber industry to develop, “we just decided to go ahead and go into manufacturing ourselves.”
In the first quarter of 2022, he noted, the company will be setting up production facilities to create three different construction-related products from hemp fiber: roofing panels, siding for buildings, and decking boards; all made out of hemp bast fiber and recycled plastic. Two of those three product lines, Anderson said, should be at full capacity by the fourth quarter of 2022. In the beginning of next year, as production gets underway, he continued, they will be needing about 50,000 pounds of hemp fiber per month. However, they expect that demand to rise to around 300,000 pounds each month once they are at full production capacity.
The company plans to import hemp fiber until it can find domestic cultivators who can supply sufficient raw material. However, Anderson noted, “that’s a good problem for us; we can overcome that. If we need to import for a year, we’ll import for a year. When you create the true demand, then the processing will follow.”
Both Anderson and Schluttenhofer pointed to Kentucky-based HempWood, which produces hemp flooring and other building materials, as an example of what can be achieved by the hemp fiber sector. HempWood, Anderson observed, is a small company that found its niche at a good time. “When lumber prices went through the roof [with the arrival of the COVID-19 pandemic], and they’re using hemp hurd and basically a glue to make wood, that catches people’s attention and other people will start doing it,” he said.
For his part, Schluttenhofer noted that hemp fiber is a logical reinforcement ingredient for different types of plastics. “Its strength-to-weight ratio, while technically not quite as strong as fiberglass, weighs a lot less,” he said. “That’s why it’s used in auto parts and biocomposite resins where you mix fiber for structural reinforcement. There’s a lot of different directions it can go, which is why a lot of people see its potential. As for competing with existing products, that’s the question.”