Hemp processors trying to attract organic product

Most processors and hempseed exporters are struggling to recruit organic growers, in spite of sky-high prices. | File photo

Canada’s hemp industry has a problem.

Most consumers who buy hemp fall into the ‘health conscious’ category of shoppers, who are willing to pay a premium for foods loaded with protein and healthy oils.

But those same people tend to consume organic foods and Western Canada doesn’t produce enough organic hempseed to satisfy that demand.

“Our exports doubled in 2015 from $42 million to (more than) $100 million,” said Russ Crawford, Canadian Hemp Trade Alliance president.

“The growth is fantastic, but … the person that’s buying hemp right now is very diet conscious and very knowledgeable. They know the value of hemp but they also have a predisposition to (buy) organic.”

Manitoba Harvest Hemp Foods and Hemp Oil Canada, which merged last year to form the largest company in Canada’s hemp industry, are not contracting production of conventional hempseed this year because there is a substantial carryover from previous growing seasons.

However, they are contracting organic hemp production. Most processors and hempseed exporters are struggling to recruit organic growers, in spite of sky-high prices.

“The nominal value of conventional hemp is about 80 cents a pound,” Crawford said. “I’ve heard in the $1.70 (per lb.) range for organic…. (But) we can’t keep up with the pace for organic demand.”

If an organic grower could achieve a modest yield of 500 lbs. per acre, the crop would generate $850 per acre in gross revenue.

On the agronomic side, hemp consumes a substantial amount of soil nutrients and that may deter some organic producers.

“It’s a big plant so it needs a fair bit of nitrogen, which is the obvious challenge in organic farming,” said Jeff Kostuik, director of operations Central Canada for Hemp Production Services, a hemp foods company based in Saskatoon. “(But) if you have somebody coming off of an alfalfa plow down… the nutrients are there and they can still attain that 1,000 lbs. per acre (of hempseed).”

Organic hempseed production isn’t much different than conventional because only one product, Assure II herbicide, is registered for hempseed production.

“This is part of the education process that we need to develop within the industry… that in fact conventional hemp and organic hemp, there’s really not that much difference in the end product.”

To move the hemp trade beyond the niche market of consumers keen for organic, Canada’s hempseed industry needs to expand acres and move up to the major leagues.

There is an opportunity to sell hempseed as a food ingredient but companies like General Mills and Kellogg’s won’t make a move until there’s a stable supply at a reasonable price.

“You wouldn’t need the organic certification (because) it’s going into breakfast cereals or baking goods,” Crawford said. “(They) don’t want to create packaging and products, then find out oh, we’re out of hemp…. We’re at that tipping point. We need to get to a point where we have enough acres where we stimulate demand for both conventional and organic.”

Unfortunately, the acreage expansion won’t happen this year because contracted production of conventional hemp is expected to slump. Most processors and exporters have sufficient supply to last throughout 2016 because last year’s crop was larger than expected.

Contact robert.arnason@producer.com

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