Last year, Consolidated Growers and Processors Inc. contracted a hemp crop 35 percent larger than this year’s entire Canadian crop.
The 1999 crop, for the most part, is still in farmers’ bins.
That has some hemp industry participants questioning the strategy of the farmer-run co-op trying to market the glut in supply.
Parkland Industrial Hemp Growers Co-operative Ltd. has sold little crop to date, although leaders say it has promising leads from Japan, the United States, Holland, Germany and within Canada.
“Everybody’s taking samples,” said co-op chair Joe Federowich.
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The co-op is holding out for prices close to what it contracted with the now-bankrupt CGP – 50 cents a pound for hemp grain and 80 cents for certified planting seed.
“We’re not going to start at the bottom (for price) and try to work our way up,” said Federowich.
Meanwhile, co-op members have planted another 4,000 to 5,000 acres of hemp this summer. But because of supply, hemp prices have fallen, say industry sources.
“In a way, I respect that strategy, and it does make a lot of sense to pool resources and not to dump hemp every which way,” said Sasha Prytyk of Gen-X Research Inc. in Regina.
But Prytyk said prices have dropped 20 to 25 percent from last year’s levels so it may be unrealistic to expect them to rise again.
Prytyk sees non-organic hemp prices remaining in the 35 to 45 cents a lb. range for the foreseeable future.
His company is wrapping up sales of its 1999 seed at discounted prices to avoid carryover.
This year, Gen-X has contracted 900 acres of organic and 600 acres of non-organic hemp, along with planting 600 acres for third parties, and numerous research plots.
It’s a far cry from the company’s original plans for about 5,000 acres.
“Definitely, farmer interest has taken a big blow,” said Prytyk, referring to the CGP bankruptcy.
In Winnipeg, Shaun Crew of Hemp Oil Canada doubled his contracted acreage from 700 in 1999 to 1,400 acres this summer.
He’s developing a new line of retail hemp products. U.S. border troubles appear to have eased, he said.
Recently, Crew traveled across the border with 550 lb. of hemp seed, and waited only 10 minutes while customs officials tested the content of his grain. He had planned to cut back on new acres this year and buy from the co-op instead, but found he could contract for new crop cheaper.
“They (the co-op) are not selling it at fire-sale prices.”
Crew described grower contract prices as being in the 45 to 50 cents a lb. range this year, about a nickel down from last year’s levels.
Prairie Hemp, a company owned by a group of Manitoba farmers, shied away from planting much hemp this year, said Rene Saquet, a Laurier, Man., farmer involved with the group.
The group didn’t sell all its production from last year, and prices are heading lower, said Saquet.
These days, farmers are grossing in the 40 cents a lb. range; a year ago, they were getting 60 cents.
“The buyers know there’s a big glut out there,” said Saquet.
In Gilbert Plains, Man., co-op member Dave Malowski said he gives his group top marks for its effort in marketing the hemp. But he hopes to see hemp moved from bins by fall. He’s concerned about the size of the glut and his farm’s cash flow.
