High-value hemp production for cannabidiol (CBD) extraction has been all the rage in recent years as a result of the pilot program for industrial hemp cultivation. One thing to bear in mind, though, is that hemp cultivation isn’t ideal for growers who are afraid of a little risk. Unlike growing wheat, soybeans, or other crops, growing hemp doesn’t qualify for crop insurance. For that reason, hemp growers who plan on starting with hemp cultivation should include all the costs and expenses in their business plan so they can better plan their hemp farms.
At the moment, China, the US, Canada, Chile, and France are focusing on hemp cultivation for commercial or research purposes. In the US, under federal law, industrial hemp with THC levels lower than 0.3% can be legally cultivated. Hence, hemp seed production is becoming even more popular to grow. Hemp growers are growing this versatile plant and companies are turning their hemp CBD biomass into a huge variety of CBD products.
If you’re a potential hemp grower and you’re trying to figure out how much it costs to plant hemp, you’re at the right place because in this article, we’ll give you the scoop on the price for growing hemp.
Growing Industrial Hemp and the Regulation Behind It
After the passing of the 2018 Farm Bill, industrial hemp production was legalized on a federal level, which completely changed the hemp industry in the USA. While THC isn’t legal in all the US states, CBD is legal to cultivate, sell, and buy under federal law. Therefore, the industrial hemp plant was removed from the list of federally controlled substances, and the cultivation of the industrial hemp flower is now legal in all US states.
People wanting to become hemp farmers first need to apply for a license in the U.S. Department of Agriculture (USDA), and the license program will depend on the location of the hemp growing facility. Hemp growers wanting to grow industrial hemp should remember that their plants can have only traces of THC, and the THC levels should be lower than 0.3%.
What You Need to Remember Before You Start Planning the Costs for Hemp Cultivation
If planning to grow hemp for CBD, there are a few things to keep in mind prior to planning the cost for your hemp farm.
Buying High-Quality Feminized Hemp Seeds for Growing Potent Female Plants
To get your seeds from the germination to the flowering stage and produce high-quality and potent flowers, you need to take into consideration the quality of the hemp seeds. Female hemp plants have naturally higher levels of CBD and produce larger buds compared to male plants. Therefore, a crop with feminized hemp seeds will not only be more CBD-potent, but it will also produce more biomass.
And since male plants can fertilize the female plants, it’s best to grow them separately. When ordering your hemp seeds, make sure they’re all high-quality and feminized, to get the best hemp crops available.
Even though there’s no crop insurance when it comes to growing hemp plants, there are a few options for risk management after the crop is harvested, cured, transported, extracted, and processed.
After the Farm Bill and the legalization of industrial hemp, the USDA released guidelines for cultivation. The EPA announced the approval of 10 pesticides that are cleared for hemp production. Out of those, nine are bio-pesticides, and one is a conventional pesticide. They control insects, bacteria, fungi, and nematodes.
Hemp Farming Costs
Before you start your hemp farm, you should make an elaborate plan for all the costs.
When it comes to licensing fees for hemp farming, the prices can vary from state to state. For example, the license for hemp farming in Vermont costs $25 per 100-acres farmed, however, in North Dakota, the same license costs $2,650. To get more information for specific states and their licensing fees take a look at the following data.
Operational and Non-Operational Costs
The next factors that affect the price for starting and managing your hemp farm include the soil tests, fertilization, irrigation, and all the ongoing necessities for the production of a successful hemp crop.
The following list includes the operational cost for your 1-acre hemp farm:
- Soil Tests– around $420;
- Fertilization– around $250;
- Weed Control — around $300;
- Irrigation– around $370.
The non-operational costs are the ones that don’t fall under the day-to-day activities, they’re related to the hemp farm, but not to the growing process. They include costs for:
- Suppliers– around $200;
- Transportation– around $65;
- Testing Fees– around $150;
- Inspection Fees– around $70;
- Security– around $35;
- Interest– around $520;
- Land Rental (if applicable)– around $100;
- Other– around $150.
Equipment, Labor, and Quality Hemp Seeds
The hemp farming equipment also has a huge part in the total cost for planting a hemp farm.
Equipment and Labor Costs
- Machinery– around $80;
- Machine Operational Costs– around $300;
- Irrigation System– around $450;
- Drying Barn– around $600;
- Drying Materials– around $50;
- Labor Costs– around $5,000.
Quality Hemp Seeds
Choosing which hemp seeds to sow plays a huge part in the quality of the final product. When planting hemp seeds you’ll need to put 2-3 seeds per hole. Therefore, to grow 1500 plants, which is the appropriate amount for a 1-acre hemp farm, you’ll need about 3000 feminized seeds. The cost for this amount of seeds would be about $3000.
Returning Your Investment From Growing Hemp
Similar to growing any crop, growers are interested in the profit that comes from their farm. The profit per acre is calculated as the market price minus the cost of production. You can farm your hemp plants for fiber, for seeds, or for oil.
When considering the purpose of your hemp farm, you should also look at the market value for different hemp products. For example, a 1-acre farm will produce about 2.5 to 3 tons of fiber which can be sold for $250 to $300 per ton.
Hemp seeds have a similar market value as fiber, although they’re measured in pounds instead of tons. The price per pound is about $0.60 to $0.65. From a 1-acre farm, you can expect to harvest about 1000 pounds of hemp seeds.
Hemp oil is the main reason why a lot of people go into hemp farming. Even though growing hemp for CBD oil is more complicated, its value is also higher. To grow hemp for CBD, you can use either the agronomic or the horticultural method. The agronomic method is the same as farming any other crop – it involves less risk, but produces a smaller crop. The horticultural method involves growing the hemp plant in similar conditions as the cannabis plant, but it’s also more expensive.
Depending on the method you use, hemp grown for CBD can be worth between $2,500 and $75,000. Knowing how to properly grow hemp can help you to maximize the CBD percentages, and help you grow thriving plants. And finally, all the hemp grown for CBD must be feminized, meaning that new seeds or clones should be obtained each season.
How Much Can You Make per Acre of Hemp?
Those who work in the cannabis cultivation market are primarily focused on their yield since they want to make the most out of it at the end of the season. However, when talking about your hemp plants making you money, there needs to be a slightly different approach as not all weed products are created equal, so, some will get you more money, and some less.
For example, an acre of hemp will yield about 700 pounds of grain, though that grain can either be used as a meal (530 pounds of it), to produce 5,300 pounds of straw, pressed into 22 gallons of oil, or transformed into 1300 pounds of fiber.
Then it’s off to the weed market, so the overall price will depend on what product you choose to make (whether it’s concentrate or other hemp products). Some markets sell hemp at a higher price, so finding a good place to sell your product is the last, but also one of the most important steps.
The market price of hemp seeds/hemp grain ranges between $0.60-$0.65 per pound. So, if you have a yield of about 1,000 pounds per acre, and have about $300-350 of production cost, in the end, you’ll make between $250 to $300 per acre.
On the other hand, if you decide to work with hemp fiber, the profits will change a bit. The average cost of hemp fiber is $260 per ton, while the average yield of hemp fiber per acre is between 2.5-3 tons. When you take into consideration the production costs which are between $300-350, the profit will end up being around $430-$480.
To grow your own hemp farm, you’ll need to take into consideration all the costs for hemp production including the licensing fees, the operational and non-operational costs, as well as the costs for equipment, labor, and quality hemp seeds. When we sum up all the costs from the previous paragraphs, we get to about $12,000 for one acre of hemp.