By Joshua Navarro, Esq.
Ninety-four percent of hemp farmers in Arkansas lost money last year according to a recent report by Hemp Industry Daily. Despite this staggering headline, the report went on to outline that both cultivation and processing permits grew in Arkansas for 2020. These assertions beg the question: how many farmers and processors from 2019 returned to the sector in 2020, and how many of these licensees are new to the industry?
In Arkansas, the loss of revenue was evident, with processors outsourcing half of their raw materials, and farmers unable to sell over half of the hemp produced in the state. Broad-stroke conjecture would suggest that many of last year’s farmers were inexperienced, lost money, and got out of the game completely for 2020. Regardless, data shows that a new contingent of farmers and processors in Arkansas is still eager to take their place. Could the same happen in Florida?
In order to avoid becoming a “one-and-done” hemp farmer, one must have a comprehensive business plan that accounts for each of the many potential roadblocks to profitability. Farming in general is a high-risk profession, and with crop insurance being either extremely expensive or hard to find, hemp isn’t exactly risk-averse.
The pathway to success begins, as it often does, with proper preparation. To take lessons from states like Arkansas, Kentucky, Oregon, and others: start slow. Unfortunately, the national hemp community is riddled with stories of farmers who literally “bet the farm” on hemp, only for their crops to rot away in warehouses unsold. Many farmers planted without having a contract in place, or were promised contracts that were never fulfilled. The promise of hemp being an “instant” or “easy” cash crop is an illusion that we should all awaken from. The “green rush” mentality of farmers in other states has created a current glut of biomass, with prices plunging as low as three dollars per pound in Oregon recently.
By taking the time to build a framework with a trajectory toward success, Florida hemp farmers can begin to bend the demand curve on biomass and re-energize the supply chain. Unlike Arkansas, which is still operating under a pilot program, the USDA approved Florida’s hemp program this past April. Currently, the Florida Department of Agriculture has already approved over 300 hemp cultivation permits, with many more to come. Advancements in the financial sector have made many banking issues less of a hurdle than a year ago.
A Florida farmer can avoid being “one-and-done” by executing a proper business plan from start to finish, especially in securing necessary contracts. Before anything goes in the ground, look ahead, and have a plan for everything, including: genetics, farming practices, laboratory analysis, possible hot crop mitigation, drying, transportation, and ultimately – a profitable strategy. If you need help with any of these steps, the Florida Hemp Council has members of all sectors involved to get you going in the right direction.
Join now at www.theFLHC.org!