Perspectives on the State of the Hemp Fiber Sector

Perspectives on the State of the Hemp Fiber Sector
Image: FiberFort
November 08, 2023

In both 2022 and 2023, fiber hemp has seen the most planted acreage of any hemp type, surpassing cannabinoid hemp narrowly last year and expanding the gap this year. According to the U.S. Department of Agriculture, over 8,600 acres were planted with fiber hemp in 2022, compared to over 7,700 acres of hemp for CBD and other cannabinoids. This year, acreage planted with fiber hemp has grown to over 11,000 acres, while CBD / cannabinoid hemp acreage has declined to about 5,800 acres.

Although fiber hemp production is trending upward, those acreage totals remain miniscule relative to traditional staple crops. For example, 2023’s fiber hemp acreage constitutes 0.01% of the almost 95 million acres planted with corn this year

Still, hemp fiber market participants are soldiering on, encouraged by increasing interest in and production of the crop, as well as the recent approval of hempcrete under U.S. residential building codes. They are also hopeful for a more favorable regulatory environment in the wake of the new Farm Bill, which is expected to be finalized some time in early 2024. This article includes interviews with two operators in the hemp fiber sector who provide an overview of the state of the market, along with challenges and opportunities they are currently facing.

Focusing on “Keeping the Bills Paid and the Lights On”

“We didn’t have a great season, honestly,” Travis Samuels, the co-owner and COO at Zion Growers, an industrial hemp processor in Vermont, told Hemp Benchmarks. “We had issues with our crop, some on the farming side of things. We had flooding here in Vermont, so we didn’t do as well as we hoped. We’re looking forward to next year, but had multiple issues this year.”

Zion Growers started in 2015 with a focus on cannabinoid hemp flower. The business transitioned to hemp hurd and fiber in 2018, working with farmers across Vermont. However, Samuels said, they have been delaying hemp processing for now while using their commercial real estate business to “keep our bills paid and the lights on.” In 2022, they grew about five acres of fiber hemp as a test crop, but their plans for this year were stifled when the acreage they planned on “got flooded out.”

Samuels believes they’ll eventually be able to process about 1,500 acres of fiber hemp per season with one piece of equipment and employees working eight-hour shifts. For now, however, “we have been holding off,” he noted. “We don’t want to invest money into something smaller.” Samuels said while they have no trouble finding buyers for their products, they’re still working on financing towards equipment.

Relative Simplicity, Predictable Prices Make Fiber Hemp Attractive

Samuels said Zion shifted to the hemp fiber and hurd sector due to its less complex equipment and lower regulatory barriers compared to cannabinoid hemp. Growing hemp for fiber and hurd is “more akin to your standard crop. It’s a lot closer to corn than it is to cannabis.” Given that Vermont’s famous dairy industry is struggling, Samuels said, “people are looking to diversify. We have a lot of land up here so it makes a lot of sense.” He added, “And we’re really focusing on working with farmers that already have equipment for planting and harvesting.”

Most of their market has been for construction purposes; for homebuilders needing hempcrete and other hemp-based products, as well as bedding for horses and pre-packaged, small animal bedding. Pricing for Zion’s products, Samuels said, has been pretty steady. “We’re seeing about $0.90 a pound for what people are willing to pay, [for] bulk pricing for hurd.”

Farmers, Investors “Gun-Shy” About Hemp

Samuels said a lot of cultivators in his state, including multi-crop farmers, are interested in industrial hemp. “But between the lack of support from the [federal] government and coming off the wave of CBD,” he noted, “a lot of them are understandably gun-shy. It’s a big risk for them. When I bring up hemp, Everyone thinks of CBD and … about how their friends and family lost their shirts off of it.”

“We’re in a weird space,” Samuels noted. “We can’t get money on the farming side and we can’t get money on the manufacturing side, which has made things a little more difficult than we anticipated. So we’re moving forward with self-funding of our equipment, which has hindered our getting contracts.”

Looking at the national hemp market, Samuels hopes the upcoming Farm Bill will “open up the ability to get [farmers] more money for planting, better insurance, more specified insurance, things like that. What I would love to see are subsidies for farmers to grow [hemp] as with corn. We have a brand new crop that most farmers are interested in.” However, he’s dubious that such changes will come to pass with the current Congress.

Construction Sector’s Interest in Hemp “Very Niche,” but Increasing

Tom Rossmassler is CEO of Massachusetts-based Hempstone, which specializes in hemp-based building products. The business also offers training to construction industry professionals and others interested in using natural building materials.

Rossmassler said interest in hemp as a building material has been rising since last year, when hempcrete was officially approved for use under U.S. residential building codes. And while hemp is becoming increasingly well-known in the housing and construction sectors, “it’s still very niche,” Rossmassler told Hemp Benchmarks, “in terms of not just the green building industry but also what we call the natural high performance [construction].”

That being said, Rossmassler noted hemp is becoming more accepted by architects and others in the building industry. He’s recently been asked to speak on the subject by a variety of influential organizations, including the American Institute of Architects, the Rhode Island School of Design, and other architectural schools.

“We’re starting to see people who would normally do a passive house-type project [with strict energy-efficiency standards] consider substituting hempcrete and other natural carbon-storing materials for the wall assemblies,” he said.

How to Move the Needle

In terms of price points, Rossmassler said hemp building products still remain on the high end. For hemp batten and hemp board insulation products, he said they’re comparable to mineral wool – a stone-based mineral fiber insulation that reportedly costs between 25% to 45% more than standard fiberglass insulation.

For now, according to Rossmassler, the adoption of hemp construction materials in the U.S. has been “super slow,” although he expects it to scale up somewhat. “In terms of substitution, batten board products are rising quickly and should be disruptive over the next several years,” he said. “But with hempcrete products, it’s still slow to change. A lot of people have attributed that to supply chain problems in the United States, but that’s not the issue because we can get it from Europe at similar costs. It’s more a question of market acceptance of the product in the building environment.”

“The thing that would move the needle the best,” he continued, “would be some type of tax credit for carbon.” However, even if a standardized carbon credit is agreed to and regulated, Rossmassler believes widespread use of hemp construction materials is “about a decade away.”

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