The Rise of Hemp and What it Means for Wisconsin Farmers

Wisconsin is finding new opportunities in regards to hemp and CBD oil.

More than one hundred years ago, Wisconsin was a leading producer of hemp with nearly 7,000 acres under cultivation. Back then, it was grown primarily for rope and fiber used during both world wars. However, it disappeared soon after World War II due to a combination of federal regulations along with pests and disease which wiped out many crops.

Flash forward to 2019, hemp is experiencing a huge rebirth. According to the Hemp Business Journal, the U.S. hemp industry is currently worth $800 million and projected to reach $2 billion in just a few years. Today, the market is more versatile than ever with a myriad of uses: its seed, oil and fiber including textiles, building material, paper products, bioplastics and pharmaceuticals. One of the biggest potential markets for hemp is cannabidiol, also known as CBD. CBD is a non-psychoactive compound in cannabis that is low in tetrahydrocannabinol (THC). It’s touted as relief for various illnesses from post-traumatic stress disorder (PTSD) and epilepsy to sleep disorders. Hemp grown for CBD oil can be more lucrative than hemp used for grain, netting between $20 and $45 per pound depending on its quality, according to Michael Fields Agricultural Institute in East Troy, WI., which is currently researching hemp production.

With this income potential, farmers around the state are showing great interest. Applications to grow or process industrial hemp have increased nearly six-fold this year to 2,100, according to the Wisconsin Department of Agriculture (DATCP), Trade and Consumer Protection. Phillip Scott, President of the Wisconsin Hemp Farmers and Manufacturers Association, notes that hemp crops give the opportunity for true economic growth to farmers who have been looking to transition into a different industry. Luckily for Wisconsin, the ideal seeding time for industrial hemp is from Mid-May to mid-June so conditions here are very favorable for this comeback crop.

Another game changer? The 2018 Farm Bill removed hemp from the Federal Controlled Substances Act (CSA). For farmers who may be hesitant about making the transition, this helps move hemp more mainstream which can impact everything from industrial hemp insurance, to easing the U.S. Food and Drug Administration’s (FDA) approval.

That doesn’t mean growing hemp is without its challenges.

Considerations for hemp growers

Startup includes a significant investment from the required hemp growers license and annual registration to cost of the seeds and machinery. And then there’s the mandatory state testing and lab fees to prove that hemp plants don’t contain more than 0.3 percent THC, the legal limit to be considered industrial hemp. While conditions are good for growing hemp, weather still poses a risk.  

Cost of production and revenue will be volatile in this new industry for at least the next few years, says David Bayer, Rural Mutual agribusiness underwriter and crop hail specialist. He notes that being prepared can help prevent some issues. Here are some key things hemp farmers should know about before getting started:

  1. Use a reputable seed provider to buy industrial hemp or clones. Any fields testing over the 0.3 percent THC on the pre-harvest regulatory test will be destroyed, so it’s crucial to team with the right source. Here’s a list of Wisconsin-licensed seed sources and Wisconsin-licensed hemp growers who have clones for sale that passed DATCP’s pre-harvest regulatory test in 2018.  
  2. Get the proper testing. Growers must have their hemp crops sampled by  Wisconsin Department of Agriculture, Trade and Consumer Protection staff and tested by the department’s regulatory lab prior to harvest. Farmers can do pre or post-harvest testing with private labs that are certified, but this won’t replace testing by DATCP.

Find hemp industry resources.

Like with any new venture, finding a support group who can answer questions and ease concerns can be crucial. The Wisconsin Hemp Alliance, a new trade group for hemp farmers, is a helpful resource offering forums and industry educational events for farmers entering this emerging market. Insurance companies like Rural Mutual have expanded their offerings to include specific hemp growers insurance products such as crop hail and farm coverage.

For those farmers willing to make the investment and do all the necessary groundwork, hemp could provide some welcome economic relief. For more information on appropriate hemp farm insurance coverage, please contact your local Rural Mutual Insurance agent to customize a policy for your farm.

We’re here to help you choose the protection that is right for you.

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