How Much Do Hemp Farmers Make Per Year?

When you think of a farmer, you’re probably picturing a person riding in a tractor, collecting something like corn or wheat or soybeans. There’s a new crop to be reaped in the farming world, though, and it doesn’t fit into a lot of the farmer stereotypes that come to mind.

Here enters the Hemp farmer, a job that has seen a skyrocketing escalation of demand in recent years. The United States Hemp Crop Report estimates that the total number of acres licensed to grow hemp in the United States has grown over 52 times in size from 2016 to 2019.

With more and more people seeing the opportunity in Hemp Farming, many wonder how much of a money maker the industry really is, and if they should start growing hemp for profit.

How much do Hemp Farmers Make?

In 2020, Hemp fiber farmers may see a slightly higher profit margin than farmers who grow Hemp for CBD. The fiber sells for about $260 per ton, and with average tonnage yield per acre being around three, you would make about $450 per acre after production costs.

As an industrial CBD farmer, you could follow the agronomic cultivation method, which allows you to use much of the same methods and tools you used as a traditional farmer. However, those methods and machinery aren’t made for hemp plants, and your CBD yield will be much lower as a result.

If you choose a horticultural approach, you’ll yield higher CBD, but you’ll also risk running too high of a THC ratio. This method is more expensive, too.

Your profits could range from $2,500 per acre up to beyond $50,000 per acre if you do everything perfectly right, follow the best methods, and harvest plants that have about 10% CBD.

What is Hemp?

The term “hemp” is used to describe the fiber extracted from the stems of the cannabis sativa plant. Many regard hemp as a strong renewable contender against environmentally unfriendly substances like plastic and fossil fuels.

Hemp was a booming industry in the United States until the late 1930s, when the government levered a tax against the crop so steep that the hemp farm presence petered out to near nonexistence.

Thanks to 2018’s Farm Bill, hemp is back in the agricultural game. Early reports had estimated that the hemp vs corn debate would be no tough decision, with hemp foretold to bring in at least $40,000 per acre, compared to corn’s measly 1k.

The plant has been nudged back into the spotlight by environmentalists looking for an innovative solution to the materials that are having large impacts on the planet’s ecosystems. Hemp, which can be used as a sustainable solution from fuel to fabric, may be just the answer they’re looking for.

Industrial hemp uses aren’t the only reason the plant’s been crowned as a cash crop. Wholesale hemp buyers are emerging to pounce on the profit of cannabidiol, or CBD, a medicinally powerful substance that researches have given much credit to for treating child epilepsy symptoms, such as seizures. (You can find the article from Harvard University here.)

Anxiety and depression. Chemotherapy pain. Acne. Insomnia. There are infinite claims to the effectiveness of CBD oil application or ingestion.

All of that oil, however, has to come from somewhere. And that’s the seed that planted the hemp farming frenzy.

Is Hemp Easy to Grow?

Not quite. Even with a staggering projection of $26 billion total in net worth for the hemp industry within the next five years, there are some obstacles on the path to riches for emerging hemp farmers.

Hemp is a high maintenance plant

Hemp crops can be risky business; a rainier than usual season, delayed planting schedules, and inadequate environmental factors such as soil and sunlight can lead to a skimpy harvest, especially if the hemp plants don’t quite manage to canopy and deter from the growth of weeds.

You know those big tractors you see out in the fields come harvest time? Well, most hemp farmers don’t get the luxury of passing on the manual labor to that kind of machinery; due to the plant’s relative newness back in the agricultural world and the fact that hemp must be put into the ground as a seedling, hemp farmers get the pleasure of doing most tasks by hand.

However, if you have several tens of thousands of dollars in free cash to spare up front, you can invest in all of the new equipment and fitting that it takes to transition your crop from corn to hemp.

You may have put two and two together by now that, in the heydays of the United States’ hemp farming era, slavery was frequently used to man the hemp fields.

Of course, that is irrelevant now, but modern hemp farmers are still faced with an additional expense of either hiring a labor force to oversee their hemp crop plant by plant, or sacrifice their own time to do it themselves.

The High Demand for Females

The world of hemp, that is. A male hemp plant isn’t worth a dang thing to a hemp farmer who is trying to capitalize on the CBD market. In order to produce a hemp crop with a high enough yield to generate a profit, you need to find good quality, all female seeds.

Unfortunately, there are con men in every industry, and farmers have been funneling their seed budgets straight down the drain because they get ripped off by shady sellers who cut the female seeds with males. No boys allowed in the hemp fields!

Ignorant Thieves Bring Farmers Grief

It’s no secret that hemp is a close cousin to the psychoactive cannabis plant, marijuana. In fact, widespread misunderstanding of why hemp is different than marijuana remains a stigma of whether or not hemp should be legally grown and used.

Hemp does not contain enough of the psychoactive substance tetrahydrocannabinol (THC) to get someone high. Doesn’t matter if it’s smoked, ingested, or however you can imagine getting it into your system– hemp is not the same thing as marijuana.

However, that doesn’t stop two knuckleheads off the street from noticing that your hemp crop is similar in appearance and odor to marijuana. So, they slip into your field at night and help themselves to what they think is Mary Jane free for the taking.

In the end, both parties will be disappointed: the farmer because the thief walked away with his profit, and the thief because he just smoked a boatload of hemp and doesn’t feel a thing.

This has a huge impact on profits as a hemp farmer, and the problem is only getting more prevalent as hemp acreages continue to bloom across the country.

Here, the farmer has a few options, and all cost money: implementing more security measures around the crop like fences and security lights, letting the theft happen and chalking up the loss, or hiring even more help to patrol the fields at night.

Farmers Run into Trouble Once Hemp is Grown

Over the past couple of years, as the hemp market has risen from its grave where it was laid to rest in 1937, just about every farmer and his neighbor responded to the allegations that the hemp market will line their pockets handsomely.

All that Crop and Nowhere to Go

However, with the dusty old gears of the hemp market just beginning to turn again, there aren’t nearly enough people buying hemp in the United States as there are people looking to sell it.

Some of the largest productions of things like hemp clothing, hemp beauty products such as lotions, hemp plastic alternatives, and most importantly CBD based items are happening overseas, because other countries have legalized hemp for a much longer time than we have.

American hemp farmers have made attempts at establishing relations with these foreign producers, but preserving the crop to ship it overseas opens up another whole avenue of hurdles and expenses. Not to mention, most of those producers already have long since established buyer-client relationships with their own domestic hemp growers.

With Hemp Market Forecast a Bust, Farmers are stuck with Crops

When a corn farmer has an overabundance of crop, he can simply take his excess down to his local grain elevator and sell it for a slight loss, but still enough to get a slim profit out of the deal.

If you tried to take your extra hemp crops to your neighborhood grain elevator, however, you may get some funny looks in return.

With even the local catch-all for extra crops not able to take the excess hemp off the market, farmers are stuck with an over abundance of the wrong kind of green. At that point, they have to pay up once again to adapt their storage facilities for preserving hemp until they’re able to find a buyer.

Other pieces that don’t quite fit in the puzzle

From seed to harvest, there are a lot of other speed bumps that have prevented hemp farming hopefuls from reaping the benefit of this crop.

For one, many financial institutions still don’t shell out loans where cannabis is involved, so you may have a hard time funding your new endeavor if you don’t have the capital up front.

Additionally, details like insuring a hemp crop and which herbicides and pesticides to apply are still fuzzy in a market this new.

Is Hemp Farming Worth It?

While this may have all sounded like quite a bit of gloom and doom, the hemp industry still has huge potential to be a success in the United State. As the frenzy of the new crop market dies down, serious and dedicated farmers are still expected to profit.

Different Hemp Plants Yield Different Profits

You can cultivate hemp on your farm with one of three different goals in mind: to produce hemp seed, hemp fiber, or CBD oil.

The lattermost option is said to be the biggest money maker, but it is also the most temperamental. The stress factors in the environment that a farmer is trying to grow CBD-yielding hemp in must be closely monitored, lest a plant with THC levels over the legal limit be produced.

If you were to produce hemp with too much THC, both you and the federal government will not be very happy. Your hemp thieves will probably be, though.

Remember those outlandish claims that a hemp farmer could be making $40,000 per acre of hemp harvest? Well, it’s best to put those dreams to bed for now, because hemp grain farmers are much more likely to bring in about 65 cents per pound. If you plant and maintain an acre of hemp well, you may yield about 1000 pounds.

That comes out to a much more modest profit of between $250 and $300 per acre, after production costs are subtracted.

CBD Profit Margins are Unpredictable

As is the same with mining for the precious metal, finding the gold of the hemp industry could either make you beaucoup bucks or leave you in the hole.

The range of how much you could profit off of farming CBD oil spans tens of thousands of dollars because there are countless factors that could affect your CBD yield.

Conclusion

Your profitability as a hemp farmer really depends on your custom situation and the expenses you’d have to incur. Would you need to invest fifty grand in new machinery? How about security so that your crops don’t disappear in the night?

Would you want to play it safe and stick to hemp grain or fiber, which generally yields a much more modest profit than CBD?

Or would you go for the gold and take the risk on all of CBD’s flighty profit factors?

The hemp market still holds many unknowns and a lot of possible growth for its farmers. The best thing to do is always be mindful of the risk factors at hand, be a perpetual student of the best hemp farming practices, and consider your farm’s potential in the long term.

Thank you for taking the time to read this article!

Greenlife Organics