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Dairy Farmers Turning to Hemp as Next Cash Cow?

Milking cows has been a large part of Dale Grossen’s life on his grandparents’ Wisconsin dairy farm. However as of late, the payout for milking his 55 Holsteins, which he mostly does by himself, is not what it used to be. “The prices are so bad that it’s not even worth being a dairy farmer anymore,” he said. Now, as other smaller dairy farms are trying to stay afloat, Grossen is hosting a new crop on his farm: hemp. For many family-sized dairies, consistently low milk prices and operational costs have been eating up the profits. Wisconsin, formerly the head of the nation’s dairy industry, ended up losing 638 herds in 2018. The interest in hemp is growing. The amount of applications for licenses to grow the new crop in the states has inflated from 250 in 2018, the introductory year, to 1,400 in 2019. Financially distressed dairy farmers are perfect candidates to grow this new crop. However, some rocky starts have indicated the transition may not be going so smooth.

Interest in this “budding”, new, industry in the United States received an increase when the ban on growing hemp was eliminated via the farm bill that was approved in 2018. Early efforts to cultivate the crop have been in place since 2014, after a federal policy change allowing for some states to begin working with hemp on a developmental level. As a very versatile crop, hemp can be harvested for multiple applications, including food, fiber, and the extraction of CBD to be used for medical purposes. Some speculate that the nation’s hemp industry, which was hovering around approximately $800 million as of last year, could jump to $20 billion by the year 2022. As more states are becoming open to the crop—at least 41 have launched some variation of a hemp program — many are expectant that it will bring new growth into the agricultural sector.

Potato farmers in Maine are also eyeing hemp as an alternative crop. Kentucky, which has suffered due to the decline of tobacco, is trying to make itself into a hemp industry authority. Historically, Wyoming was a center for sugar beets. Farmers there are now looking at hemp to boost the economy. In areas where small dairy farms are fumbling, many see hemp as a poossible buffer against uncertain dairy prices. In Pennsylvania, dairy farms of different sizes are beginning to work with new hemp companies, according to Rob Barley, the chair of the Pennsylvania Milk Marketing Board. Star Rock Farms, in which Barley is a partner, is starting to grow hemp for fiber, while some smaller-sized operations are starting to grow the crop for CBD production. “I think there’s opportunity,” Barley said, “but it’s so young.” Wisconsin Representative Tony Kurtz, A supporter of the hemp pilot program enacted back in 2017, sees the crop playing an identical role to tobacco, in the state’s family-sized dairy farms. “It was a crop that was very lucrative; a lot of dairy farmers would have an acre or two for extra money,” Kurtz said. “And I do think hemp could have that potential.”

Dale Grossen and five other nearby farms in Green County, Wisconsin, all began growing hemp during the same period last year. Grossen’s son, Ben, and cousin, Mark Hubbard, made the move to launch GroHubFarm. Hubbard, who has experience from Washington’s cannabis industry, provided a variety of hemp cultivars to experiment with in the region. They planted 36 acres, spanning across five farms in Monroe, experimenting with details such as placement and irrigation. Grossen planted 16 acres of the crop on his land. “It’s an altogether different farm than I’m used to,” he said.

They ran into some simple challenges, like taming weeds and keeping the plants from being pollinated- which lowers the plants’ value for CBD cultivation. To keep up with the status quo—which overloaded Grossen’s regular dairy farm maintenance —they hired workers. Then, as harvest time arrived, testing ruled that majority of their plants contained more than the state’s 0.3 limit percent of tetrahydrocannabinol, or THC, the psychoactive part found in marijuana. Several of the varietals they chose proved to exceed the legal THC content level, although that wasn’t clear until they reached maturation. Because the crops would fail the inspection, Grossen brought his chopper to his plot and burned it. To get the full 36-acre project started it cost about $400,000; including investments in equipment. Nearly 17 percent or 6 acres —were still able to be sold. Yet, on the plants that survived, the financial reward was high enough for Grossen to stay in it, and remain optimistic. “If it had all been that way, we would be fairly good off,” he said.

An agriculture educator with the University of Wisconsin-Madison’s Brown County Extension, Liz Binversie, urges careful confidence for dairy farmers thinking about diversifying using hemp. The infrastructure and the actual plants are very expensive, making starting-up costs are quite extensive. Additionally, there is a lot of labor involved in cultivation, from maintaining weeds in the field to harvest, which is often done by hand if the hemp is for CBD. There is also risk with the quality of the plant’s farmers secure. The market is new, and farmers can easily purchase seeds, that aren’t up to state quality standards or won’t survive in their location, by accident.

Binversie cautions that hemp isn’t for everyone, particularly farms with particularly uncertain financial situations. At a recent information session, one farmer likened growing hemp to having an additional full-time job. This would be a huge burden for already-overworked dairy farmers to add to their list of responsibilities. “I just hate for anyone to think that it’s just this easy-going crop,” Binversie said. “That’s definitely not the case from what we’ve seen.” It can also be difficult for hemp growers to sell their crop, as there aren’t many processors operating yet. But Kurtz, the state lawmaker, predicts that as the nascent sector matures, it will become simpler for farmers to find buyers. The amount of applications for hemp processing licenses in Wisconsin rose from 100 last year to nearly 700 this year. A farmer himself, Kurtz planted his maiden fiber hemp crop this year, adding it in the rotation with soybeans and corn. However, regardless of his optimism, when other farmers ask Kurtz about starting out in the business, he warns people to be cautious. “You need to take it slow,” he said. “Don’t go bet the farm on it.”

Lured by the financial hope of hemp amidst sustained low milk prices, dairy farmer Joel Pominville planted 13 acres of hemp on his farm for fiber in Middlebury, Vermont, in 2017. The following year, he grew 22 acres for CBD production. However, Pominville does not plan to continue growing it. With many producers emerging in the market, he believes that the bubble might burst soon. Vermont’s hemp industry has boomed since its launch in 2013, when only 175 acres were registered in the state. By 2018, that number had grown to almost 3,300 acres. Vermont Agency of Agriculture official Cary Giguere added that dairy farmers in the state often experiment with side crops, such as milkweed for fiber and sunflowers for oil. Giguere views hemp as another promising alternative.

Pominville does not agree. He referred to the plant as “miserable” to work with. The fibers of the hemp got wrapped in his equipment, which meant time spent altering his gear. The “tremendous” workload, in addition to milking 200 cows, called for 30 workers at harvest time. He also purchased a heater that dried the crop, which cost thousands of dollars in propane to run. Pominville approximately spent half a million on the endeavor. He’s sold off certain pieces of his equipment. Some of it, like an old combine, is so beat up he’ll just dismantle it for parts. From Pominville’s viewpoint, hemp is an unrealistic side crop for dairy farmers. “That’s crazy talk,” he said. Others have more optimistic views. In Wisconsin, GroHubFarm is getting ready for their second season. They’re remembering lessons learned from their first try. One example of some innovations they made to their process is that they’re using clones instead of seeds, which is a better testament of the quality of the plant. Hubbard expects more promising results: “This year’s a totally different situation,” he said. Grossen, who recently sold his herd this past fall after 35 years of being in service, suggests to other dairy farmers thinking about diversifying with hemp is to start small. The best harvest GroHubFarm had was last year and came from a single-acre plot, he said. He explained that there is a high learning curve. “We’re trying it this year because, well, do we fold up? Or do we continue and do it better yet?” Grossen stated. “We’re getting a little smarter every year, I’m hoping.”

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