On February 17, the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS) released the results of the 2021 Hemp Acreage and Production Survey in the form of its first National Hemp Report. According to NASS officials, the first of its kind survey will not only guide federal agencies in their support of the hemp sector, but will also assist producers and manufacturers, while having the potential to impact policy decisions regarding the hemp industry.
Here are some of the report’s headline statistics, along with how USDA’s 2021 survey data compares to Hemp Benchmarks production estimates for prior years:
Outdoor Acreage: Planted area in 2021 for all utilizations totaled 54.2 thousand acres. The value of hemp production in the open (outdoors, in other words) for the United States totaled $712 million. Area harvested for all purposes in the open totaled 33.5 thousand acres.
Based on Hemp Benchmarks’ documentation of the acreage registered for hemp in 2021 – over 193,000 acres – the USDA’s survey data indicates that only about 28% of registered acreage was planted nationwide. Harvested acreage reported to USDA is only 17% of the amount registered last year.
When compared to Hemp Benchmarks’ estimate of outdoor acreage planted with hemp for all utilizations in 2020 – up to 160,000 acres – the USDA’s survey data suggests that national hemp production contracted by as much as about two-thirds year-on-year.
Outdoor Floral Hemp: U.S. floral (cannabinoid) hemp production grown in the open for 2021 was estimated at 19.7 million pounds. Area harvested for floral hemp in the open in the United States was estimated at 16.0 thousand acres. The average yield for 2021 floral hemp in the open was estimated at 1,235 pounds per acre. The value of floral hemp grown in the open totaled $623 million.
It must be noted that, in valuing the acreage of floral hemp grown outdoors, the USDA survey data conflated crops grown for biomass and those grown for smokable flower, which commands significantly higher wholesale prices. Based on the USDA figures just noted, “floral hemp” grown domestically in 2021 averaged just over $31.50 per pound. Meanwhile, February’s Hemp Benchmarks Spot Price Index report shows that hemp biomass with 10% CBD potency transacted at an average price of $3.70 per pound, while smokable flower sold for a bit under $250 per pound, on average.
2021 is the first year that USDA endeavored to assess the scope of the country’s hemp production. Hemp Benchmarks formulated estimates for prior years based on state data that can be used to gauge trends in how much acreage was utilized and how much cannabinoid, or floral, hemp was actually produced.
For 2020, Hemp Benchmarks estimated the volume of outdoor CBD and other cannabinoid hemp production at between 50 and 60 million pounds nationwide, indicating that production volume shrank by as much as two-thirds in 2021 along with the amount of acreage cultivated. Looking further back, we estimated that the amount of CBD hemp grown outdoors reached as high as roughly 112 million pounds in 2019, suggesting that U.S. CBD hemp production volume contracted by over 80% in just two years.
Hemp Grain: National production of hemp grown in the open for grain in 2021 totaled 4.37 million pounds. Area harvested for hemp grown in the open for grain in the U.S was estimated at 8,255 acres. The average yield for 2021 hemp grown in the open for grain was estimated at 530 pounds per acre. The value of hemp grown in the open for grain totaled $5.99 million.
Hemp Fiber: In 2021, production of hemp grown in the open for fiber was estimated at 33.2 million pounds. Area harvested for hemp grown in the open for fiber in the U.S. was estimated at 12.7 thousand acres. The average yield for 2021 hemp grown in the open for fiber was estimated at 2,620 pounds per acre. The value of hemp grown in the open for fiber totaled $41.4 million.
Hemp Seed: Production of hemp grown in the open for seed in 2021 was estimated at 1.86 million pounds. Area harvested for hemp grown in the open for seed in the U.S. was estimated at 3,515 acres. The average yield for 2021 hemp grown in the open for seed was estimated at 530 pounds per acre. The value of hemp grown in the open for seed totaled $41.5 million.
Hemp under protection: Hemp growers used 15.6 million square feet under protection (in greenhouses or indoors) for production. The 2021 value of hemp production under protection in the U.S. totaled $112 million. Hemp clones and transplants grown under protection for 2021 totaled 20.2 million plants. The value of hemp clones and transplants grown under protection totaled $23.8 million. U.S. production of floral hemp grown under protection was estimated at 310,000 pounds. The value of floral hemp grown under protection totaled $64.4 million. Hemp grown under protection for seed totaled 4,059 pounds. The value of hemp grown under protection for seed totaled $23.7 million.
The USDA statistics underscore how far the fledgling hemp industry still has to go. For example, the 54,152 acres of industrial hemp grown domestically last year is larger than the 38,026 acres of strawberries reportedly projected to grow in California alone this year (with California growing nearly 90% of all U.S.-produced strawberries). It is a drop in the bucket when compared to the acreage devoted to major staple crops, amounting to just 0.06% of the 93.4 million acres of corn that U.S. farmers reportedly planted in 2021.
Despite several years of severe growing pains, Patrick Atagi, President and CEO of National Industrial Hemp Council (NIHC), remains very optimistic about the commitment of U.S. hemp stakeholders. “We’re very competitive,” Atagi told Hemp Benchmarks. “U.S. farmers, once you get them involved, we outproduce the vast majority of the world; we are good at what we do. The issue is harmonization as regulations are being put in place.” That being said, Atagi noted that the U.S. hemp industry will need to endure more difficult seasons before it reaches a level of acceptance as a mainstream agricultural crop.
Some large-scale players in the hemp sector are betting on hemp fiber and grain, along with hemp-derived cannabinoids, to ramp up industrial hemp’s profile as a lucrative crop. Graham Owens is President of Texas-based Delta Agriculture, which describes itself as the nation’s “largest industrial supplier of hemp raw goods.” He is also the Co-chair for Government Affairs at NIHC. Owens told Hemp Benchmarks his company saw $16 million in revenue last year, “and we’re on pace for about $100 million this year.”
Part of the reason for that significant growth, he said, is more consistency in the overall hemp market. “The glut of those first few years, the ‘Green Rush,’ when everyone went out to grow and kind of flooded the market with biomass, particularly on the flower side,” he said, “that is starting to run out. So I think we’re finally starting to see growth and stabilization of prices. Hopefully the per-pound price that’s on flower and others is starting to grow, and get back up. We’re never going to see $50 or $80 per pound [on cannabinoid hemp biomass] again, but we may see closer to $7 or $8 per pound, and that’s certainly an improvement on where we are now.”
Owens’ company grows a tri-crop model of hemp flower, fiber, and grain, but is turning more of its attention to the latter two production targets. ”Now is the time to be scaling up fiber and grain,” he said. “We saw flower as the first act. Fiber and grain is going to be our second act. That’s where the higher ceiling is, it’s just a volume game.”
One of the main sticking points in developing mature U.S. hemp fiber and grain industries is the lack of investment in the infrastructure needed to support those markets. According to Owens, large corporations are looking to smaller companies to create those sectors, “to validate it and to help build those processes that they can then scale up.”
“We’ve had very interesting conversations with some very big, well-known brands, whether it’s on the grain or fiber side,” he continued. “But it’s a supply chain gap. They want you to come with a [specification] in hand and say, ‘we can meet this at this price, and it works.’ The interest is absolutely there.”