Demand growing | Markets for seed, oil and fibre gain momentum
Researchers, businesses and farmers have tinkered with prairie hemp production since the mid-1990s, but it’s been almost 20 years and the crop remains a curiosity.
For some, that has less to do with elbow pokes and guffaws from passersby, as they joke about the rows of funny-looking and possibly funny-smelling plants, and more to do with the crop’s unrealized potential.
However, industry officials say an expansion of acres in recent years shows hemp has finally taken root.
They argue that growth is being driven by health-conscious consumers interested in hemp products as so-called “super foods.”
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Consumers are curious about hemp’s functional properties: high protein and omega fatty acid content. The interest has cleared shelf space in many major Canadian groceries and retail outlets for products made from marijuana’s sister oilseed.
Canola remains king in this part of the world and hemp acres comparatively small, but the three prairie provinces are at the epicentre of a burgeoning hemp industry. It’s here that the overwhelming majority of the Canadian crop is harvested.
Saskatchewan is now the leading producer, outpacing Manitoba’s former lead, but the keystone province remains home to the largest processors.
“Personally, I don’t think there’s any looking back now. I think we’re an established industry,” said Shaun Crew, president of Hemp Oil Canada, which markets hemp products, including oil and protein powder, in 15 countries.
“I don’t see us backstopping like it might’ve occurred in the second year.”
Hemp fields have been visible on the Prairies since 1998, when a 60-year ban on its cultivation was lifted. Since then, the research and agronomy have been established and potential markets for its seed, oil and fibre identified.
Acres dedicated to the specialty crop have fluctuated over the years as buyers and processors materialized and then vanished.
Acres grew rapidly at first, from a few thousand nationwide in 1998 to more than 35,000 the following year, including almost 22,000 in Manitoba. Two years later, there were only 3,251 acres across the country, largely isolated on the Prairies.
They spiked again in 2006 to then-record highs of almost 50,000 and then dropped by more than 30,000 acres the next year.
Total production climbed to more than 38,000 in 2011: more than 10,000 acres each in Alberta and Manitoba and a little less in Sask-atchewan.
Kim Shukla of the Canadian Hemp Trade Alliance said the national total for 2012 is expected to be 50,000 to 60,000 acres when the final numbers are counted, including 20,000 in Saskatchewan.
She said the surge is a response to a shortage of hemp seed in 2011 and is in line with industry projections of 100,000 acres by 2015.
“Every agricultural sector has made a big boo boo and made a mistake where they get in with great excitement, overproduction, and then there’s no market,” said Shukla.
“That happened to us in Year 1 with hemp … so the producers learned, and so did the processors learn, that lesson very early.”
Manitoba Harvest Hemp Foods is one of the larger processors. It was founded following the original hemp trials that launched the prairie industry and produces several products, most notably packaged hemp hearts.
Seed production manager Will Wellborn said the company has expanded its contracted acres over the last year, as well as its roster of producers on the Prairies and into Ontario. It signed contracts with 60 growers last year.
Wellborn said some of them are returning growers with an existing relationship with the company, while others are first-timers, re-cruited through field tours, trade shows, grower guides and word of mouth.
“This year we increased the value of our production contracts significantly,” he said. “We have plans to either maintain those numbers or increase them for the next year as well.”
Northeastern Saskatchewan is particularly ready for expansion, he said.
Crew said Hemp Oil Canada had contracts with 20 prairie growers in 2012. Its contracted acres doubled, with the bulk of its production in Saskatchewan. Acres in Manitoba ranked third behind irrigated growers in Alberta.
“You’ve got to mitigate your risk. You have to spread it around. You put it all in one area and you get a frost or a hail and you’re SOL,” he said. “If you don’t have hemp seed, you’re not in business because there’s no spec(ulative) market to be buying it on. Ninety-eight percent of it, I’m sure, is under contract.”
Manitoba Harvest will examine its production capacity and market forecasts over the next few months and begin contracting with producers.
“Everything we contract has an end market,” said Wellborn.
Producers received 70 to 80 cents per pound for conventional seed and $1.10 to $1.20 per lb. for organic last year, although the vast majority of agreements were for conventional production.
Contracts are for a delivered price. Harvested seeds are brought to an appointed seed cleaner in the grower’s area, and transportation adds “less than a nickel a pound” to the final expenses, Crew said.
“From a grower point of view, I think there’s an opportunity to make a dollar,” said Ken Clancy, who operates Clancy Seeds in Carrot River, Sask., and works with hemp growers and a processor.
He grew the crop himself for the first time this year, seeding 400 acres, although he lost much of it to wet weather.
He estimates he will clean 100,000 bushels this year. Producers will bring in as little as 1,000 bu. to as many as 20,000 bu. The average bushel of hemp weighs 44 lb.
“It doesn’t like the wet weather like we had this year, but we’re hoping this isn’t going to be a norm,” he said. “It’ll do better when it’s a little drier, like anything else.”
Data shows yields of 15 to 25 bu. per acre are possible for hemp. It is grown in rotation with cereals and forages, often following alfalfa.
“It’s a very versatile crop and it can be grown in a lot of areas,” Wellborn said. “It’s critical to get a good plant stand established in the spring. It’ll vigorously out-compete weeds if it has a chance to build its canopy.… That’s the most critical part of it.… After that it’s off to the races and it just comes down to the harvest planning.”
Shukla said research into agronomics and varietal development continues, and the results of the latest variety trial data will be released this winter. Efforts are also underway to kick start the fibre processing industry.
Most of the hemp grown in Canada are the shorter varieties, better suited for seed production. However, fibre from taller varieties can be processed for a variety of uses, from fabric to paper to car parts.
However, that industry has been hard to build.
Alyssa, a dual-purpose variety, was registered in 2004 and has been contracted for higher prices of up to 90 cents per lb.
Several initiatives exist to explore these developing markets and create the technology for processing. Among them is Alberta’s Hart Fibre Trade Co., which has developed a novel method to straighten hemp fibre for use in textiles.
The company recently received $938,000 in funding from the federal government.
“The low-hanging fruit was really the food market, the seed market, and now the processing of the fibre is just starting to gain momentum,” said Shukla.
