Hemp was knocked low this year in Europe.
But next year it should get better, a European hemp industry expert said during the Canadian Hemp Trade Alliance convention in Winnipeg.
Wheat especially diverted planned hemp acreage this year after wheat and canola prices soared last autumn and hemp prices fell behind.
“The best profit was wheat and energy crops, not hemp,” said Michael Carus, managing director of the European Industrial Hemp Association, in an interview.
“They had higher prices for their wheat than the hemp industry was able to give them for their hemp straw, so it was not very attractive. Many hemp growers went to wheat.”
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Hemp in Europe is a different crop than in Canada. It is grown for its fibre and almost not at all for its seed. In Canada, the industry is seed-based.
The huge rally in crop markets in the past 15 months affected mainly food crops, not industrial crops like hemp, Carus said. Hemp fibre in Europe is used for industrial applications, such as making lightweight door panels.
Farmers last fall looked at escalating wheat prices and compared them to hemp contract prices and switched to wheat, Carus said.
European hemp area has plunged from its high of peaks of more than 50,000 acres between 1998 and 2003 to about 37,000 acres in 2008.
With falling wheat and canola prices occurring now, Carus said the hemp industry hopes that area will rise above 35,000 acres in 2009.
By itself, steady hemp industry demand and falling wheat and canola prices should bring more hemp acres. But a wrinkle has appeared in the European Union’s subsidy regime.
While most crop-specific subsidies have been eliminated or reduced in recent years, hemp has problems with the EU possibly continuing subsidies for long fibre production but cutting subsidies for short fibre production.
Hemp processors, which are modern, produce only short fibres. But flax processors, which tend to be older and less advanced, produced both short and long fibres.
A subsidy for long fibre production will encourage producers to favour flax over hemp if the short fibre subsidy is cut, Carus said.
The long fibre subsidy is 200 euros per tonne and the short fibre subsidy has been 90 euros per tonne.
Carus said his industry would like to increase its production of hemp nut products, but is facing resistance in Europe.
“It’s not easy to penetrate a market with a nut nobody knows,” said Carus. Ironically, the controversy in the United States about whether to allow hemp nut imports has informed U.S. health food consumers about the product.
In Europe, where most people are more relaxed about marijuana, hemp has not been too controversial. That means it is rarely discussed and European health food consumers don’t know much about it and don’t demand hemp products as much as American consumers.
