Recently questions about Hemp has been on of the top calls coming into the local county agent office. First and fore most it needs to be understood that as I write this article hemp is still illegal in Texas. While the Texas House of Representatives did pass HB 1325, in the Senate it was referred to the Senate Ag Committee and that is where it now sits. Once and if it is released by the Senate Ag Committee it will have to be voted on by the Senate. For now, there is no hemp production industry research in Texas. I have included some excellent information about hemp production by Dr. Calvin Trostle, TAMU Dept. of Soil & Crop Sciences Lubbock.
Is industrial hemp adapted to Texas?
To date no Texas A&M AgriLife program has researched industrial hemp due to its continuing illegal status in Texas. Texas A&M AgriLife might initiate a limited research plan on industrial hemp as early as 2020 only if the state ban is lifted. The primary future objective would be to identify which approved varieties (≤0.3% THC) perform best in regional adaptation and production of biomass/fiber, seed, and oil yield under different Texas environments.
Literature suggests industrial hemp grows best on soils with pH 6.0 to 7.0, possibly up to 7.5. It is not suitable for heavy clay soils or soils that do not drain well. Indications from other U.S. regions suggest that industrial hemp is ideally suited where annual rainfall is at least 25 inches (which could be made up by irrigation). In contrast, others state that industrial hemp is a drought-tolerant crop that could perform well in drier regions of the state.
Industrial hemp may be agronomically productive in drier regions, but it remains to be seen if productivity under dry conditions will be competitive with areas receiving more rainfall. Will industrial hemp offer an advantage relative to other crops, or provide a significant rotational benefit? Some research and production information suggests industrial hemp may require significantly less irrigation than cotton, but again data is needed to assess levels of rainfall + irrigation, the level of production achieved, and the economics in a particular region.
What is the current and potential market for industrial hemp in Texas?
This is not an easy question to answer. In Texas there is no current or potential market I am aware of for fiber. Not that there couldn’t be, there just isn’t right now. There might be a small market for seed and CBD oil, but a future grower would need to identify a buyer. Companies that market CBD oil here would need to arrange for Texas production. If you are going to grow in the future, I recommend an enforceable legal production contract to ensure both market and price.
You can read online projections about CBD oil being worth $50 or more per ounce. Thus, you hear of inflated per-acre potential value, which could be 100X or more above your current cropping. Production of CBD oil does require many times more effort and expense (see section below on seed). But these high values are a poor choice to base your economics on. It will drop to a fraction of that once more production is available. There are many entities positioning themselves to be involved in the industrial hemp market. The state of Kentucky has received 109 applications as of January 2019 from businesses (not growers, they are separate) for licensing to work with industrial hemp and its products. That is up over 40 companies since 2018. Kentucky Dept. of Agriculture has approved over 1,030 grower permits for a potential 42,000+ acres in 2019 (though some will likely not be planted if the past is an indication).
Regarding the market for CBD oil, I estimate that if 1 million people used a 6-ounce bottle of CBD oil per month, then about 20,000-25,000 acres of production nationally would fulfill that demand, if it develops. The medical community will need to demonstrate that CBD oil is effective for that to be sustained. Hemp industry observers in Colorado think that CBD oil may be the best market opportunity as otherwise China dominates much of the fiber and seed market. The oil market, however, represents the smallest potential acreage for production.
Hemp seed production is straightforward and can reportedly be handled with existing conventional equipment. Fiber production represents a different challenge. This is like hauling hay to a distant location. As seller—or buyer—you may be unable to justify the transportation cost. One hemp industry colleague suggests that hemp biomass production and processing may not be feasible if the fiber must be transported more than 30 miles. Numerous Texas farmers may be interested in growing a few acres of industrial hemp to see how it does. I would assume you will have no market for a few acres unless you are growing for oil.
Regarding potential acreage for industrial hemp in Texas and nationally, only fiber production would have a large impact on farming systems, including the substantial opportunity to rotate crops. An establish fiber hemp industry might entail several hundred thousand acres. Production for seed and CBD oil would be a small fraction of fiber acres. To see more of the article by Dr. Trostle go to: https://agrilife.org/texasrowcrops/2019/03/08
While there has been lots of hype associated with the potential for hemp production, you can see hemp production is probably not going to make producers overnight millionaires. As long as it is illegal to grow hemp in Texas, AgriLife Extension will not offer educational programming or research on this specific crop.