United Soybean Board

Federal Legalization of Industrial Hemp Expected to Drop Prices

Farmers in Oregon are expecting the 2018 Farm Bill, which includes hemp legalization, to drive the market price of hemp lower through commoditization, reports the Mail Tribune.

Hemp farming is on the rise. Currently, the limited number of producers has created a market where growing is very profitable. Some, however, expect a major shift in the marketplace sometime soon.

Farmers are expecting the 2018 Farm Bill, currently stalled in committee but expected to eventually be passed, to create a national market for hemp that will turn the crop into a commodity. Commodity prices are often much closer to the cost of production due to a large supply. Though Oregon has a mature internal hemp market — one of the most developed in the country — farmers there will not be immune to the effects of the market’s nationalization.

Some farmers believe the way to beat the coming reduction in prices is to grow craft hemp instead. “I think there’s some opportunities there where there’s perhaps smaller business deals but those would match up with the smaller farms in the area,” said Cedar Grey, founder of a hemp farm near Grants Pass.

While Oregon may have an edge over other states in the coming national market due to decades of experience growing hemp, big corporate money may be able to equalize the playing field in other states. While U.S. consumers may get their affordable hemp products, either way, the casualty is likely to be the small, family-owned hemp farm.

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