Research initiatives undertaken by the U.S. Department of Agriculture (USDA) can help domestic players and strengthen the American hemp industry’s position on the international stage.

By quantifying outputs and their value, and indicating trends for such things as varieties being grown, primary and secondary uses, prices and sales, USDA surveys currently ongoing can guide regulators while giving hemp companies greater insight for business planning.

While helping the industry to function more efficiently at home, such data can also give the U.S. an edge in the competition for the relatively modest investment available for hemp around the world.

“Transparency is fundamental to the future of our industry and having the right data support gives businesses an opportunity to better operate and compete on a global scale,” said Sigfried Legeay, CFO & co-founder at London-based CanXchange, the international hemp commodities platform. “Benchmark prices, in particular, will reinforce global price stability and transparency for the sector as it is still very fragmented.”

Essential information

USDA will drill down on a wide range of indicators through the surveys currently underway, intended to provide greater market transparency to farmers, processors, producers, state governments and other stakeholders.

“This kind of data shows the size of the market, how much is happening in different sectors, and where,” said Hana Gabrielova, CEO at Czech Republic-based Hempoint, which sells certified European planting seed in the USA. “Without such data, it’s difficult to plan your strategy, and the industry can’t operate in an efficient way.”

USDA most recently announced the “Hemp Acreage and Production Survey,” which the agency said will describe the amount of hemp flower, fiber, grain and seed produced, as well as the value of those outputs and the acreage needed to cultivate them.

Meanwhile, USDA joined with the National Association of State Departments of Agriculture and the University of Kentucky in a separate national survey among 18,000 hemp businesses regarding production practices and costs, and the marketing of hemp products.

That query is currently gathering data on production location, cultivation seeds and fertilizer, licensing fees, labor, farm-gate prices by end use, and a number of matters related to contracts.

Farm census

USDA has also for the first time this year included hemp in a separate survey of farmers that is part of the national agriculture census.

For the census, the National Agricultural Statistics Service queries 36,000 producers from various agriculture segments for responses to support market projections. The farming census, carried out every five years, looks at a wide range of indicators to guide policymaking.

As the nascent hemp industry continues to develop in a post-CBD-centric landscape, the U.S. hemp industry has started the process of balancing outputs, with projections that grain and fiber will rise as the CBD market settles down.

The National Industrial Hemp Council (NIHC) has predicted that over the next decade acres licensed for CBD hemp, now grown on 82% of total licensed U.S. hemp acres, will fall to just 2.78% of total U.S. fields. Meanwhile, hemp grown for seed production is projected to rise to 65.8% of total acreage, with fiber farming reaching 31.4% of total hemp fields in the same period.

Investment landscape

As hemp expands in the United States, farm-gate sales can be expected to pass $10 billion a year by 2025, NIHC projected in a report released earlier this year.

That presumes investment in the sector, which can’t be expected to grow exponentially, as it did during the CBD investment craze. With the total amount of investment available worldwide for industrial hemp, including CBD, modest by any measure, and competition growing as more and more markets around the world come online, the pressure on available investment will continue to grow. Those markets which can quantify their industries stand a greater chance of coming out ahead as hemp becomes a commodity and serious investors get involved.

While China’s central government is known to keep detailed industrial records, other countries and regions around the world have yet to develop batteries of data on hemp that will be essential to compete globally. U.S. hemp rival Europe, for example, currently has no detailed report on the industrial hemp sectors.

“The U.S. can quickly strengthen its position in the competition with Europe because they will have data they can promote hemp as a solution to big industrial players, who know they must become more sustainable,” Gabrielova said.

Among the data the three USDA surveys, collectively, will gather data are:

• Farm field acreage;
• Yield levels;
• Outdoor vs. indoor hemp production;
• Primary and secondary crop outputs;
• Smokeable hemp;
• CBD and other extracts;
• Grain for food;
• Fiber;
• Cultivation seed;
• Harvesting methods;
• Seed and clone sources;
• Indoor grow data on flowers, clones or transplants and seed;
• Outdoor grow data on flowers, grain, fiber and planting seed.