A representative of Hemp Oil Canada, a hemp processor in Ste. Agathe, Man., says hemp growers around Dauphin, Man., may be signing contracts this year for 90 cents per pound but those prices represent a fraction of the hemp industry.
Kevin Friesen, seed production manager for Hemp Oil Canada, said the majority of contracted acres this year for conventional hemp grain are going for much less than 90 cents per lb.
Hemp Oil Canada has signed up about 80 percent of its acres for 2011 and contracts are averaging 60 cents per lb. for conventional grain and $1.05 for organic grain.
In the Feb. 10 issue ofThe Western Producer,Chris Dzisiak, a Manitoba hemp grower, said he and other producers around Dauphin have signed contracts for 90 cents per lb.
In light of dramatic increases in canola and other commodity prices, Dzisiak said growers would be giving hemp seed away if they signed contracts for less than 90 cents per lb.
That comment prompted several phone calls to Friesen from producers wanting to cash in on high hemp prices.
However, 90 cents per lb. might apply to a variety called Alyssa, which is grown around Dauphin but not to other hemp varieties.
“I think the reason they have the price that high is that people aren’t willing to grow it (Alyssa) for grain for less than that,” said Friesen, who lives in British Columbia but grows hemp near Rosthern, Sask.
“Alyssa is really developed for dual (fibre and grain) or fibre usage. That’s where it shines, not so much solely for grain production.”
Most hemp producers in Manitoba, Saskatchewan and Alberta choose to grow varieties like Finola, CFX-1 and CRS-1, which reach maturity more rapidly and yield more than Alyssa, Friesen said.
“Producers in most areas simply stay away from dual or fibre varieties, as there simply isn’t a significant commercial fibre market and it’s easier to just grow grain.”
Despite Friesen’s comment that most hemp growers are signing with processors for 60 to 65 cents per lb., Dzisiak maintains that those prices are unfair to growers.
In 2010, most producers grew conventional hemp grain for 60 to 65 cents per lb., Dzisiak said. Canola futures, by comparison, have jumped to $600 per tonne from $400 per tonne in the last 12 months.
“If you had 40 bushels (per acre) of $12 canola (per bu.), that would probably equate to $1 per lb. (of hemp grain). So why would you grow hemp for 65 cents per lb.?” said Dzisiak, president of the Parkland Industrial Hemp Growers, a producer co-op in the Dauphin region.
The president of Hemp Oil Canada, Shaun Crew, said the Canadian hemp industry couldn’t withstand such a drastic price increase.
“Hemp food products already sell at a premium price to competing products such as soy or flax,” Crew said.
“A 50 percent increase will most certainly have a devastating effect on growth…. I would prefer to see the continued collaboration and cooperation between the producers and processors than a position that will surely destroy the industry.”
At 65 cents per lb., hemp remains competitive with canola, Friesen said. Based on his calculations, 65 cents per lb. equals $28 per bu. of hemp grain.
“So we’re about twice the price of canola and that’s kind of the tipping point. If it’s better than twice the price, people will tend to grow it because you get about two-thirds of canola yield, on average.”
Aside from price, western Canadian producers also choose to grow hemp for agronomic reasons, Friesen said.
In addition, hemp can be seeded late, which is an option to have in wet spring, Friesen said.
“We’ve had people seeding June 30 and still getting crops in southern Alberta. In Saskatchewan, people can seed up to the middle of June and still get reasonable crops.”