WINNIPEG — With a large carryover from last year’s crop, hemp acres in Canada are expected to be down this year along with the price.
“We had a bit of over-production in 2017,” said Russ Crawford, president of the Canadian Hemp Trade Alliance and director of Naturally Splendid Enterprises.
“It doesn’t take much to over-produce a crop when you’ve got 100,000 acres. So it’s a delicate, delicate balance.”
Even with the over-supply there are producers who will be starting to grow hemp.
For example, Fresh Hemp Foods has contracts with a small amount of new growers for 2018.
“There are people that are still discovering the crop and looking at ways to include it in their rotations,” said Clarence Shwaluk, the company’s director of farm operations.
Even with the price lower than in previous years, farmers can still get a sizeable return from hemp, which Shwaluk said is comparable pricewise to growing canola.
“Even though the price has corrected, there still is profitability in this crop. We think that’s going to continue to attract growers,” he said.
Crawford said conventional hemp prices have dropped around 20 cents this year to around 55 cents per pound. Even with the price drop, Crawford said that still provides a decent return.
“It was crazy good before, so there’s still incentive to produce hemp, but certainly at a lower number, perhaps, than in previous years,” he said.
Conventional prices have dropped, but organic hemp prices are still higher — $1.80 to $1.85 per pound this year.
“We expect higher acres in organic versus what we did in 2017,” he said.
“We will see some growth on that side of things and very little carryover on the organic side.”
There have been some changes in the international marketplace for conventional hemp. Canada used to sell a lot of hemp to South Korea, but China has started exporting there at a lower price, which is another reason Canadian prices are lower this year.
“The consumption of hemp in South Korea has dropped, and it’s also been displaced by seed from China,” Crawford said.
He has also heard rumours of Chinese hemp making its way into the Canadian marketplace. However, he doesn’t think that is the case because he regularly follows government reports and hasn’t seen any news about Chinese hemp seed imports. However, he does think Chinese hemp seed is making its way into the United States, which is one of Canada’s main marketplaces.
In the U.S., laws have been changing in states to allow for the production of industrial hemp. Because hemp production is a fledgling industry in that country, there aren’t a lot of processing facilities there, which could lead to U.S. hemp seed making its way into Canada to be processed.
“Our exports to the U.S. are down quite a bit this year as well, and so we’re in a competitive state,” Crawford said.
Australia approved hemp for human consumption last fall. Previously it had been allowed only for pet food. Naturally Splendid Enterprises was the first company to ship a container of hemp food product into Australia, while Fresh Hemp Foods is currently in contact with potential customers there.
The Canadian hemp industry is also part of the recently announced federally funded Protein Industries Canada. The CHTA is optimistic this could help expand the industry.