Kentucky agriculture leaders and economists say the state’s turbulent hemp industry is still trying to find stability this year after uncertain federal regulation and overproduction led to a tanked market for the crop and subsequent bankruptcies.
Kentucky Department of Agriculture data released in late May shows there are 960 licensed hemp growers this year. That number is a slight decrease from 978 in 2019, and a stark contrast compared to the change from 2018 to 2019, when the number of hemp growers more than quadrupled from 270.
University of Kentucky Assistant Professor Tyler Mark specializes in hemp economics. He said because of the large influx of hemp growers last year in multiple states, too much hemp was produced, causing the price of hemp biomass to tank. Past KDA data shows 92% of Kentucky hemp grown in 2019 was for CBD oil, a popular chemical compound with alleged medicinal benefits.
The overproduction of hemp biomass for CBD and subsequent price crash led to some hemp companies to file for bankruptcy and some hemp farmers to losehundreds of thousands of dollars on unpaid contracts for their hemp.
“Acreages in other states are going to pick up as well, so this oversupply issue we had in 2019 could persist and probably will persist into 2020,” Mark said. “Early on this year I was talking with producers, ‘We need to think about how we’re going to produce this stuff for less than a dollar a [CBD percentage] point.’” [Read More @ WKMS]
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