Hemp Farmers Face Tough Balancing Act

Hemp Farmers Face Tough Balancing Act

Mon, 07/27/2020 - 16:02
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How are Pennsylvania hemp growers preparing for harvest season in 2020?

They’re keeping their fingers crossed.

Starting in 2017 — the first year industrial hemp was allowed to be grown in the state on a limited basis — Pennsylvania followed the regulations established in the 2014 Farm Bill.

Today, those regulations are history in Pennsylvania, and an interim rule issued by USDA in 2019 guides the state’s hemp industry. As a result, growers are engaged in a balancing act that they hope teeters in the right direction come harvest time.

Despite the risk, the hemp industry continues to grow in Pennsylvania. In 2020, the state Department of Agriculture issued 577 permits to growers, compared to 324 growing permits last year.

One of the biggest challenges facing hemp producers in 2020 is the establishment of a 15-day harvest window that begins the day a crop is tested for THC levels. The brief window means producers will be faced with a lot of guesswork in deciding when to test for THC and when to harvest.

If they act too early, an immature crop with low levels of CBD — the extract that largely determines profit — could be the result. If growers wait longer to harvest, chances are good that the CBD levels will go up, but the risk of a crop exceeding the 0.3% limit for THC also increases. If a crop goes “hot,” it has to be destroyed per federal regulations.

It all makes for a risky hemp season in 2020.

“I think we’re going to see actual harvest CBD levels drop or crops destroyed because of hot THC levels,” said Erica Stark, executive director of the Pennsylvania Hemp Industry Council.

And that’s not the only challenge facing Pennsylvania growers this year.

A saturated hemp market has dropped CBD values from $3 per point in 2018 to less than $1 today, according to Stark. Plus, other states still operating under the 2014 Farm Bill regulations, which allow more leeway for THC levels (resulting in higher CBD levels), could have an advantage.

Plants with a higher CBD level will be more sought after by processors in a marketplace already laden with supply, and that could leave some Pennsylvania farmers without an outlet to sell their crops.

“I’m hopeful processors in Pennsylvania will give Pennsylvania farmers preferential treatment,” Stark said. “It’s going to be a challenging year, but it’s important not to blame the state Department of Agriculture. They’re conforming to USDA guidelines.”

At least one grower in the state doesn’t see it that way, however.

Ben Davies of Wild Fox Provisions in Berks County is in his third year of growing hemp. He thinks the unfair competitive advantage for states like New York, Kentucky, Colorado and Oregon could have been avoided.

“It’s concerning that we decided to go down that route,” said Davies, who is also on the Pennsylvania Hemp Steering Committee. “The problem is all these other states went one more season under the 2014 regulations, so they can produce much higher CBD content. Processors want the most bang for the buck, so why buy Pennsylvania hemp at 8% CBD when New York and Colorado are at 16%?”

Shannon Powers, spokesowoman for the state Department of Agriculture, said even though other states interpreted USDA rules differently than Pennsylvania, growers here do have an advantage.

“Because Pennsylvania made the changes to reflect new USDA requirements now, Pennsylvania growers will be eligible for USDA Rural Development and NRCS grants. Growers in states that delayed will not be eligible for this funding,” Powers said.

The ability to seek grants was of little solace to Davies, who said he’d rather see Pennsylvania be competitive.

“Do you want a couple $1,000 grants or make tens of thousands as a profitable business?” he said.

Josh Leidhecker, owner of Susquehanna Hemp in Lycoming County, agrees that Pennsylvania is at a disadvantage, mainly because of the guesswork that comes with a 15-day harvest window. To lessen the risk of a crop going hot, he suspects farmers will harvest early and CBD levels will be lower.

Leidhecker himself is somewhat immune to the danger of non-compliant THC levels because he is growing 34 acres of hemp for grain, which isn’t ready to harvest until September. At that time of year, he said, there won’t be any THC in the crop.

But Leidhecker, who is also on the state steering committee, feels for the other 90% of farmers in the state growing for CBD. He said there are 320 hemp farmers trying to grow for CBD for the first time, and they’ll be taking a gamble due to THC compliance and the 15-day harvest window.

“Your first guess is when to call for a test, find someone certified to take the test, schedule that person and hope your plants are compliant,” Leidhecker said. “Then you have 15 days to harvest. If you call for the test too early, the crop will be too low in CBD when you harvest. Or if you call too late and it goes hot, then it has to be destroyed.

“I feel bad for those who bet their farms on CBD this year.”

Rather than guess and hope for the best, Dale Norley of Tasunka Farm Organics in Chester County made a major change in her operation this year by switching to autoflowering hemp. Unlike photoperiod varieties that reach flowering stage based on the ratio of daylight to darkness, autoflower hemp matures based on the age of the plant.

The change was expensive and labor intensive, Norley said, and because autoflower varieties are smaller the volume of plants on her fields increased dramatically.

Norley did four plantings of 50,000 autoflower plants spaced two weeks apart. She expects harvest season to be intense as the successive plantings reach the flowering stage, but at least she knows when they’ll be ready to harvest.

“We’re not stressing about harvesting immature plants because of worries about THC levels,” she said. “It’s a lot more upfront costs and a lot of labor, but we’re not stressing if our crop is going to be compliant.”

Norley would’ve preferred to not rely solely on autoflower hemp. She would rather see less restrictive regulations that would allow the luxury of planting other genetic varieties to stretch out the harvest window and the work that goes with it.

She said a change from the 0.3% THC compliance level would be the biggest relief of all.

“I hope they make it 1%. It’s still hemp, not pot,” she said.

So what can be done to lessen the risk and possible competitive disadvantage that Pennsylvania hemp growers face under the USDA interim rule?

The suggestions are plentiful.

Stark said the ultimate fix is up to USDA, and the agency can start by changing the way plants are tested. Right now, she said, the top two-thirds of the plant is sampled, and that’s the most potent portion when it comes to THC. A better alternative, she says, is a composite THC test from the entire plant, which would help achieve compliance.

As far as oversupply goes, Stark expects new markets for fiber and grain to open in the next couple of years. She’s also hopeful the CBD market will expand in the near future, but that’s dependent on USDA regulations.

Leidhecker acknowledged that regulation is needed in the hemp industry, but it has to be implemented in steps.

“I think there’s an opportunity to modify this and reduce the balancing act of THC and CBD levels that growers face,” he said.

Powers said the Ag Department has heard the concerns of hemp growers and relayed some of them to USDA.

In a letter to the feds, Ag Secretary Russell Redding recommended nearly a dozen changes such as a 45-day window from testing to harvest, and a 2% threshold for THC compliance. Redding also advocated with Pennsylvania’s congressional delegation for additional federal funding for the state’s agriculture and food industry. Part of the request was that specialty crops such as hemp be made eligible for funding and programs for growers in states with approved hemp plans.

Powers said USDA will issue a new rule before the 2021 hemp growing season, so it’s possible more changes will occur.

Davies hopes any changes that are made reflect the less restrictive guidelines set by the 2014 Farm Bill.

“If that were the case, it would be a different atmosphere in Pennsylvania. There is technology to clean THC out of the crop, and that needs to be considered,” he said. “There needs to be more flexibility in the hemp program. We have to tell the perspective of the farmer and stay competitive with what other states are doing because hemp is a national market.”