16 Apr The ‘Lo Down: Hemp Fiber and Grain with Bija Hemp
Every hemp farmer makes risk-and-reward calculations when deciding what kind of hemp best fits their operation. Should you grow for CBD and other cannabinoids, or for fiber or grain, or a combination? While it’s true that hemp will grow just about anywhere, the real question is: How much product can you yield from what you grow? And will there be a market for it?
Thinking of growing grain? Be sensitive to application timeout periods when making rotational decisions and make sure your wheat-cleaning service can keep the gluten count down if you’re aiming to be gluten-free. Want to try fiber? There are some critical agronomic decisions that can either boom or bust your production: What bast versus hurd content does your buyer want? Should you grow a dual or tri-crop?
Start exploring these questions and more in this episode of the ‘Lo Down, where we get expert insight into growing hemp fiber and grain, from pre-planting to harvest, including general overviews of how much seed yields how much product, what planting and harvesting equipment you’ll need, ideas of when to cut and harvest, and some common problems to watch for.
About Tom Dermody, Vice President of Strategic Development for International Hemp Solutions
Tom is a hemp industry veteran with a background in non- and for-profit business. As a graduate of the University of Maryland, he began his career in Washington D.C. working for the National Family Farm Coalition and Citizen Trade Campaign Ag Division. Following the passage of the 2014 Farm Bill, Tom relocated to Colorado and became the founding staff member of the Industrial Hemp Research Foundation, a 501(c)(3) nonprofit, which assisted in the development of the public-private model that has played a key role in the growth of the U.S. hemp industry thus far.
Tom joined the Bija Hemp team in November of 2017 and manages all aspects of operations ranging from licensing, procurement, and distribution of certified seed across Europe, the Americas, and Australia. Apart from his responsibilities to Bija Hemp and its parent company International Hemp Solutions, Tom serves on the Steering Committee of the Colorado Hemp Agricultural Advancement Group, the Banking and Insurance subcommittee of the Colorado Hemp Advancement and Management Plan, the Colorado Hemp Research Authority Working Group, and is a board member of the U.S. Hemp Growers Association.
About the ‘Lo Down
HiLo wants to serve its farmers and the greater hemp community with the latest and best information available, especially during this time of uncertainty. We’re talking to farmers every day, fielding the questions and sharing our best advice, so these ‘Lo Down webinars are designed to do just that online.
Join us every week on Thursday at lunchtime to hear what we’re hearing, and get your questions answered.
So, thank you everyone for joining us today, Thursday April 16th. It’s a few minutes after noon Pacific time. You’re getting on the back end of your day on the East Coast. We’re really excited to have some special guests joining us today with Tom and Russ joining from International Hemp Solutions. My name is Christian Gray. I’ll be helping facilitate the webinar today, walk you through a little bit of housekeeping, a few announcements and then I’ll hand it off to my colleague, Kevin Nowell, who is our in-house hemp nerd and organic farmer who can help host the conversation.
We’ve got the Zoom webinars set up, so we’ll be able to control the audio. There are a couple buttons at the bottom edge that you guys can try like raising your hand. If I ask a general question, people would kind of want to respond to a poll like matter. You can also use the webinar chat, which is traditionally where we’ve been capturing questions. There’s also a Q&A function. Regardless of where you ask it, I’ll try and keep an eye on it. If it’s relevant to what’s being shared, we’ll add it right there, real time. And if not, we’ll kind of save it until the end of the conversation.
Sure, no worries. So, we’re excited to have you here. We’ve got a full house. We’re expecting 50, 60, 75 folks, and I’ll tell you a little bit about who HiLo is, and then we’ll hand off to Kevin. We can do quick introductions with Tom and Russ, talk a little bit about International Hemp Solutions, and they’re actually partners of ours, and it’s great to be working with them directly. I’ve been following Tim Gordon for a while and watching Tom do his thing in the industry.
So, first, a little bit about HiLo. We are a farmer-first hempseed company based in Edenton, North Carolina. We came to market last year with autoflower genetic called Autopilot. We were focused on that and really trying to educate farmers through workshops and webinars like these. In addition to providing genetics, we actually have partnered in 2020 with Agrarian and we’re offering crop consulting free to the farmer with every genetics purchase. So, we’ll make that available to our farmers through our partner network.
HiLo Million Seed Giveaway
And then we also thought it might be an interesting idea, this was actually before the existential issue, to offer up some free hempseeds to farmers in 2020. So, earlier in the year, we announced a million seed giveaway. We’ve just completed the Q1 drawings, I believe, and we’ll make an announcement for 10 farmers that will be receiving free seed from HiLo. We’re really excited to get a chance to share those seeds and those genetics and give farmers a chance to try before they buy or kind of learn through experience. And I’m sure that Tom and Russ are going to have a say about experience.
New for a HiLo in 2020 is, besides CBDV and CBG and CBD, we know all about the cannabinoids. We really wanted to open up the portfolio and address other applications of hemp, so that’s why fiber and grain became part of the portfolio, and we’re thrilled to have partnered with folks who have the experience working with those genetics. That’s why we brought them on today. So just as a reminder, if you have questions, please use … The chat box would be ideal for me to keep an eye on things, but feel free to use the Q & A as well. And I’m going to hand it off to my partner in crime, Kevin Nowell. Kevin, do you want to go ahead and introduce yourself and then we’ll get the guys going.
Yep. Hey, everybody, this is Kevin Nowell with HiLo Seed Company. I’m the head of farmer relations. So my job for the most part is I talk shop with farmers, talk through their experiences with our seed, help them decide on what genetics are the right fit for their operation, and what the … just help them kind of set up their overall farm plan. I’ve been doing a lot of farmer-oriented hemp education more recently as well. Today, we’ve got Tom Dermody and Russell Orsborn from IHS Bija Hemp. So, I’ll hand it off to you guys to introduce yourselves.
About Tom Dermody and Russell Orsborn
Go ahead, Tom.
Sure. Hi, and this is Tom. Thank you everyone for taking the time. Just a quick intro on my end. I got my start in the hemp industry in 2015 by way of a 501(c)(3) nonprofit called the Industrial Hemp Research Foundation that helped bridge the initial gap between public and private partners that wanted to validate the use cases of hemp. And interestingly enough, through those ventures, I was introduced to a newly formed company called International Hemp Solutions (IHS) that was focused on offering hemp specific production services company. We are most well-known for our seed company being Bija, which presently multiplies, conditions, sells and represents the interests of several varieties of European origin. The two that we carry and that we’ll be covering today, Hinola and Bialobreski, are available in commercial quantities. And I’ll touch up on the company a little more throughout the presentation, but I did want to also take a chance to introduce Russ, and Russ, take it from there for a sec.
Oh, hi. Yeah, good morning or good afternoon, everybody. My name’s Russ and I pretty much grew up on farms, cattle and hay ranches all over the states and then different places in Canada. I wandered off for a while into the software industry with AutoCAD and I got tired of that after a few years. So, I came back and started as a project manager and field inspector in British Columbia and Alberta. And I came back to the U.S. not that long ago, maybe 10 years ago, and did a few projects here in Colorado, working with CBD RX and putting together their first crop. Since I’ve been here, mostly what I’ve been doing is focusing on growing certified seed, AOSCA-certified seed so that we can supply farmers with seeds that they can work with insurance and all the other standard crop programs. I guess as a relation to how long I’ve been doing this, I planted my first seed in 1974. I don’t know, I was about 16 or 17 years old, so I’ve been doing this for a while, both on the cannabis side and on the hemp side. Right now, I’m kind of the field manager for all operations at Bija and International Hemp Solutions.
About International Hemp Solutions
As a follow-up to that, for all intents and purposes, Russ is really the lifeblood of our U.S.-based seed production operations and has been a real pleasure to work with personally and whenever our grower partners interact with Russ, he has certainly been a wealth of knowledge for them. But I did want to take us in … Thanks for that, Russ. I did just want to talk … While we are U.S.-based and U.S.-focused, one of the unique pieces of our company is that we do have a global presence, most specifically in production. Right now, about 80% of our seed is produced in Europe and as a company, we are committed to domesticating that seed process as the demand as well as the supply side works itself out.
We have partnered with top-tier variety partners to ensure that what we offer to growers will be consistently performing, high-yielding in its class, and for folks that are making the transition from CBD, we have never exceeded the 0.3 limit in any formal testing in this country. And that is something that other seed companies somewhat admire about us and something that we’re particularly proud of. And not just say that we haven’t done that in our own labs, but anything that we provide to the public for sale is more than compliant relative to some of the other partners.
This year we’ll be participating in over 40 trial assessments across the country in partnership with 25 land grant institutions through what’s commonly referred to as the Multistate Initiative and led by Bob Pierce of the University of Kentucky. And I think this is a huge opportunity for growers to feel far more confident than they have in previous years because we’re starting to offer the kind of reliability that is commonplace in other crop performings. And then as a last note to Christian’s point, IHS is, alongside the HiLo seeds, a founding member of the U.S. Hemp Growers Association because we recognize the unique challenges and representation requirements that growers must have for this commodity just to show fruition here in the states. And most recently, our company is very fortunate to be represented by one of our managing members on the recently formed AOSCA Hemp Variety Review Board. It’s something that we cherish and hope speaks to our commitment to towards servicing growers first and foremost.
The ’Lo Down on Fiber and Grain
But with that, let’s talk about some fiber and grain. We pulled these pictures out because I think they give a nice introduction to the type of farming this is most suitable for and really, the agronomic differences that varieties will exert. Here in the middle with my cursor, this is our variety called Bialobreski. It is one of the oldest registered hemp varieties in the Western world. And actually, before it was a … It precedes the fall of the Berlin Wall, to kind of give you an idea. It is one of the longest standing fiber type seeds available, and thanks to some work conducted by the Canadian Hemp Trade Alliance last year, we have been able to ascertain that it is the second-highest bast fiber-content of any presently certified seed variety on the market. For reference, this is about six feet right here on the nose so that you’re looking at a plant that is almost 12 feet tall, and without a large background, I just wanted to make that clarification.
The image on our left is supposed to show with … at a, pardon me, good seeding rate inter-row, what sort of limited ancillary branching you’ll exuberate, and also you’ll have a much tighter panicle development, thus leading to strong competition. On the right here is a recently developed variety called Hinola, which to our understanding is the highest grain-yielding variety of any presently certified variety. Most Canadian varieties come in between 15 and as much as 2,000 pounds an acre. This variety in our experience can easily exceed 3,000 pounds of grain production an acre and is very attractive, presently in the European market, but we believe it to be the type of variety that will allow us to ascertain a lot of the imported or presently imported grain. And that’s something we’ll cover here later.
And this picture on your right, to finish this thought out, gives you an idea of the type of plant density even in grain farming that we’re still exuding. Our seed count for that variety is somewhere close to 30,000 seeds to a pound. And for seed production purposes, we’d lay at 11 to 12 pounds to the acre, and that’s what this particular picture is drawn from. But as a grain farmer as opposed to someone who’s raising for seed, you would actually have even higher density here. Therefore, there’s some more conventionally or conventional wisdom with respect to your management. Russ, is there anything you want to throw in on this picture before we get to the next slide?
Yeah, the one on the far right, that’s one of our fields from last year. You can see the pivot wheel tracking on the middle of it. Those are on 30-inch rows, which we use for a multiplication of seed for certifying. But if you’re going to be farming, you’d be going up to … We did 12 pounds per acre on 30-inch rows. If you were doing 10- or 7-inch rows, you would probably be more likely to 22 to 25 pounds and end up with 10 to 15 plants per square foot.
Risk vs. Reward of Farming Hemp for Grain/Fiber vs. CBD
Great. Thanks for that, Russ. I’m going to just jump to the next slide here. What we’re trying to do here is before we actually get into the production, give a realistic assessment of the unique challenges that some folks may face in getting involved in a particular crop product. For folks in CBD, not to include HiLo amongst them, but the clean stock seed or nursery products otherwise has likely been one of the biggest production issues to date. But there are similar risk-and-reward calculations that every grower should be aware of when deciding what kind of hemp fits best in their farming operation, and I’ll tend to focus more on the grain and fiber from now.
So, let’s start with the grain and just kind of give some high points on this. One of the issues that we’ve seen with folks who are participating in grain production is not being sensitive enough to application timeout periods when making a rotational decision. Meaning that if you’re a farmer in the Midwest, you can’t pre-plant and include a pre-plant herbicide for corn and then switch overnight to trying to raise some hemp, because that will run into a ton of productivity issues as well as more likely than not, that crop may not be fit for sale at the time of harvest or otherwise. And that is a real issue, and something that any potential customer or purchaser of our seed is entitled to have us review, because we certainly want to see you be as successful as possible.
At the farm gate, and this is something where I have to say Russ is probably one of the leading experts on the subject, is seed maturity. And when, based on whether you’re producing seed or grain, is the optimal period for you to have the most or lowest clean-out and resulting return on your grain production. And we have seen especially in more managed production scenarios that you have a slightly earlier seed maturity than what you might expect if you were working in the European market or without ancillary irrigation in particular. And then last, to wrap out the grain, for folks who are in the Midwest and raise wheat, I’ve seen it time and time again. You cannot be confident that your wheat-cleaning service will be able to keep your gluten count down so as to make that product fit for sale. Because almost all of the hemp brand that is sold for food consumption and is marketed as gluten-free does have that as a prerequisite, and we have seen that issue ourselves and like to make folks aware of that.
Now, jumping … And if there are any questions, take those a little bit later. But on the fiber side, you have to make a decision that you’re going to grow for long bast fiber and hurd or what people colloquially called the tri-crop. And when you make that selection for the tri-crop, you’re having a series of compromised decisions that lower the overall yield of what ultimately was your first targeted crop product.
Hey, Tom? Tom, just to interrupt for a second, since we have a wide variety of folks joining us, multi-year veterans, first time folks, can you just talk about dual and tri-crop applications… just to back up the bus a little?
Sure. And typically, the dual crop either refers to a crop that is grown for the bast fiber and hurd and/or the grain and the flower material. And in theory, all three of those components can be harvested, but it is a risky decision in that you’ve got more overhead and the risk and reward of which crop product is going to make you the most money in your given region. The way I’d like to boil it down, I think Russ and I share this opinion that it’s better for a farmer to be successful at two things than three off the bat. With that line of thinking, when you go to grow for fiber you have to make some very critical agronomic decisions that will either boom or bust that production.
And what can happen, and this has happened to Russ and I personally, we told some growers how to grow for fiber and we called them to see how harvest went and they said, “Oh, we’re going to let it go to seed.” And I politely said, “I wish you the best of luck, but it’s more than likely that you’re going to blow your combine out.” And I think it made it all of 20 yards in because of the actual plant population density that they intended to harvest was just way too much for that system to take on at any given time. And what you do, if you had a fiber field and you just wanted to let it go to seed, the lignin binding that occurs between the hurd and the fiber is its strongest in the seed maturity phase, meaning that if you let a fiber crop go to seed set, you’ve basically created a bamboo forest on your field and you’re better off just letting it field ret and be managed in that success of spring, because I to date have not seen anyone with a piece of equipment that has economically handled the tri-crop.
And I reserve the right to change my mind, but it’s just not something I think is conducive on the U.S. market. The closest thing that people may be familiar with that is arriving is the John Deere 660 and 67 series headers that do allow you to swath below your cutting distance, but those are in limited markets here in the U.S. And as hemp production expands, I suspect John Deere will make those available on a more regular basis.
Just a quick comment, Tom. For everybody that was listening to the story about the fiber guys that waited too long and tried to harvest it as a grain, they waited so long, their combine burned to the ground in that field, by the way.
Wow. So, I know you’ve got lots to cover. Do you guys want a few more questions now or do you want to get through a few more slides?
I think we’ll probably address some of those initial questions in the next slide, Christian, but I know we’re sensitive to time here, so sorry about that. And actually, Russ, this is where you shine. If you don’t mind kind of giving folks some of your perspective on the essentials of pre-plant to farming gate, part one, that would be great.
The Basics: Field Selection, Nutrition, Planting, Weeds and Pests
You bet. I think the key here is thinking of this as a crop that’s very similar in some requirements like water nutrition to a high-yield crop of corn or wheat, and even canola, but closer to the wheat or corn. So, field selection, you want it you want to start off with a good field. These rumors that hemp will grow anywhere are true. It will, but well, we want to think of yield rather than just it will actually grow. So, we want to look at good soil to start off with. I’ll go down to the nutrition because I’m sure everybody’s wondering about that.
Nutrition. This plant is same thing. Lots of rumors it doesn’t need nutrition, it’ll just take whatever you got. You need to do your soil samples like you would for any other crop. Most laboratories and testers are not really equipped to respond to a request for hemp as recommendations. So, if you ask them for corn, they’ll come back fairly close and we’ll probably see over the next couple years that they’ll get some experience on how to deal with hemp. But it’s really … uses quite a bit of nitrogen, not so much in the fiber side, but on seed development, it needs nitrogen both through the vegetative state and also seed production. There’s probably 45 to 50 pounds of potash that can be used to keep other things … to keep your calcium under control and a couple of things. But let me go over here.
Yeah, you can … Typically 100 to 130 acres of nitrogen or per acre of nitrogen. Other places recommend higher, but I would use that as a starting point. It’ll give you a little bit of a buffer. Too much nitrogen will slow down seed production. 45 to 70 pounds per acre of phosphorus and maybe 10 to 15 pounds of sulfur, break or two. And you can use 35, 50 pounds of potash to keep your potassium levels in a range of 250 to 300 parts per million. So, do your research on that for your sources. I haven’t got time to go over that at the moment, but do your research on that right now. It’s all organic that needs to be input there.
Planting, you want to put it in the soil after it’s 46 degrees, 50 degrees, and with a little bit of water in it and you’re going to see it come up fairly quickly. We have seedlings coming out of the ground within three days typically, maybe four. They’re pretty quick on that. Planting depth should not exceed about three quarters of an inch, definitely not more than an inch. Half an inch is a really good one. So, I’ll just go through that.
Weed and pests. You know, weed’s the one. Pests, we don’t really have problems. They’re all out there but they’re such minimal sizes that only grasshoppers have ever really done damage where I’ve been involved. But weeds, that’s going to be a big one. You’re going to need to get a mechanical cultivation involved as soon as possible, probably three to four rotations in the first month. And the reason for that is that on the summer solstice, we go from vegetative to flowering. And at about the same time, they hit about the height where most mechanical cultivators are a little … aren’t tall enough. So that’s kind of about the same time. So, you try to plan that in the first month or maybe the first couple weeks of July.
Emergence and Production: 6 to 8 Weeks
So, here’s a good picture of emergence. The one in the far left is … That’s after about four days. They come up fairly quickly and within four days they’re pretty happy. The picture second from the left, I think that’s probably two weeks, two and a half weeks. You can see the progression on through the next couple of pictures. It’s kind of hard to tell because it’s not … Let me see. But the next two pictures are kind of almost pea flour and flour. So that’s kind of what they’re looking like through the first month and a half, maybe two and a half months. I can’t see the picture on the right, though. There’s a thing in the way, but …
And Russ, from the timestamp on that image, that looks to be right between seven and eight weeks from planting on the site. And would you say at that point that’s your break point for when mechanical cultivation would not be available anymore?
Sure it’s … I mean, everybody’s got different cultivators with different heights on them, but they’re typically … Once this plant gets about three feet tall, you’re kind of starting to get to that max point. Three and a half, four feet tall, you’re past that point. Because it’s pretty flexible because it’s got a lot of fiber of course in the stock, but you get to a point where you start knocking stuff around and you’re done.
And just while we’re on this slide, I did want to point out one interesting thing about both of our current varieties. They are monecious, meaning that the given population in any field of that single type is going to be higher than if we were working with dioecious plants. So, the uniformity of these lots has been much more consistent given that or especially relative to folks that are more used to handling dioecious hemp, whether in CBD or in the grain and fiber category. And to give you an idea as to the maturity of where the industry is at, this field that we have pictured here was actually the first training site for AOSCA to train other vested member programs on conducting certification in those states.
I think both investor member programs and their attendees were very pleased with the uniformity that we are trying to maintain in success of lots. And that again is one of the biggest differences I see in the present market of grain and fiber versus that and CBD is that all of the focus in grain and fiber from a seed supplier standpoint is that [inaudible 00:27:20] of a known specific genetic and CBD-focused varieties are trending in that way, but they haven’t had the years of maturity so to say to get there. And just wanted … Folks are going to understand that this I would say is a little more of a mature regulatory framework because of the considerations of seed versus novel products like CBD. And frankly, this is again something that may fit better for some farmers versus others, and we’re supportive of all farmers growing hemp, but sensitive to the idea that some hemp may be better for one grower versus another. Russ, is there anything else you want to add on this slide?
No, just … Yeah, maybe just add to what you had said about it being monecious, what that means is there’s more production plants in the field. That’s what it really comes down to. The males don’t produce very much fiber if any at all, so we have what are called off-type males. Our plant is male and female, so an off-type male is a spindly little thing. So, all of our plants or actually a great deal of our plants, probably 89 to 90% of our plants, are actually productive plants in both fiber and grain.
Well, great. And just one last piece before we push up on this, because I know there are folks who are interested in growing CBD and fiber, for instance. In our experience, the minimum that a grain and fiber or grain fiber should be segmented from CBD is more than seven miles from the center point of that production site. But areas like North Carolina, Tennessee, Kentucky that have much higher relative humidity indexes are fortunate because the viability of hemp pollen will be far less than folks in the Midwest or otherwise. That’s why you see a lot more ditch weed tracking up into the Midwest than in the far deep south. But just while we’re looking at some plants, I wanted to kind of have that courtesy note on the big question of how far do I have to keep different types of production away from each other. Russ, do you mind picking up from there on some of these points on seven, please?
The Basics: Timing, Equipment, and Storage
Sure. Typically based on temperature, soil temperature of 45 to 50 degrees. A lot of farmers are planting in the May 1st to May 15th. You may find earlier is better, but if you can. But typically, the grain is 100 to 120 days to maturity to harvest, and fiber is about 70 or 80 days, maybe 90 depending on when it was planted. We have a summer solstice this end of June 23rd, somewhere, 23rd usually somewhere. And that’s when we go … It’s a photo period plant. So, it goes from being a vegetative state to flowering, and typically we’re harvesting for grain in mid-September based on mid-May, early May, planting and our photo period. And again, fiber a little bit earlier. And it’s one of the reasons that when you talk about dual crops that I don’t typically talk about fiber and grain being those two crops, because they’re about a month apart at least if not more from harvest. So, if you want to harvest, one you compromise the other. If you harvest in the middle, you compromise both. So, if you want to throw CBD into fiber or CBD into grain, that might be a better move.
Now, as far as planting equipment, we can’t really put everybody’s equipment on here because there’s not enough room, but equipment, standard drills, grain drills work. Pretty much anything works to plant it. Although you know, I’m looking at row cropping, so I’m ignoring CBD. Okay? So, equipment-wise there. As far as harvesting, that’s the big one that everybody’s pretty nervous about. Most of the newer equipment are rotary heads, draper heads, so they’ll work. We’ve used gleaners probably the most, super serious 78s and 79s for our harvest because we’re harvesting grain. And the second part of that to add to it is that at some point, it’s got to be dried and that kind of brings us into the storage area. But we want to harvest in the 18 to 24%, but we have to face reality that when the seeds are ready to harvest, we have to harvest them, and sometimes our weather will dictate to us when we have to.
But the thing is, while we’re in the field, we need to address the moisture level in the grain as quickly as possible because it’s going to start to heat up very quickly. So, nine to 10 is where we want to end up. Ten’s even a little high, or 10 to 12 is a little high. Eight to nine is really a good number for our grain to be. And one of the things allowed in there since we’re on the equipment and storage page is that although grain dryers use augers typically, our enemy is augers. They’re really hard on our seed. So if you’re going to use grain dryers to do this, heated grain dryers, run your augers very slow and absolutely full to minimize any kind of damage. Again, I think I’ve got about five minutes on each page, so think it’s almost time to move on from …
I just want to make one brief … When I think about the entry to hemp farming for folks who are looking at it and who don’t have a glean or a New Holland or etc., available, fiber may be an easier entry in that you can with advice of a process or otherwise understand your swathing retting period for a given contract, because there is … Especially in the U.S. market, that is one of the big questions is how processors are aligning those commitments so growers manage the harvest successfully. But the timing is sensitive. It is one of the easier things to knock down and harvest of all types of hemp, which I think provides some advantages. But again, I think given our — we’re a little more willing to offer recommendations on grain and fiber potential solutions relative to fiber in the U.S. in particular. And for folks that are tuning in from abroad, we’d certainly welcome your questions or comments on the topic as well.
And we could certainly make recommendations on how to run your equipment. But one of the biggest ones is keep one or maybe even two fire extinguishers when you’re harvesting fiber in the cab of your combine, because these things do happen. Just keep that in mind. We have some settings that we can leave with everybody later on.
Sure. In the video here, it … I apologize if this is going to be louder for folks on. So just before I hit play, I would just kind of advise folks to watch your volume on your computer because this will be a little loud, because this is a running combine. On this video, this is actually our U.S. harvest of last year and it’s just a short shot that shows you the kind of cutting height. Oh, sorry about that. Just over-clicked myself. But I did want to just draw attention through this clip to the cutting height and the benefit that even while you still don’t have as many crop-protection products as you would for other commodities, the important aspect of these varieties is they grow high enough to avoid the anticipated weed production. And then it limits the clean-out that you’ll experience once that seed gets to a cleaner. And I’ll just run this. I’m not sure how much value there is other than making that point, but you do see the cutting distance and that unlike other commodities, there are weeds and for organic producers, they’re certainly used to that. But I have not seen a major weed inundation for sites that have made it full term to harvest just yet.
This clip is from one of … Sorry. Just turn down my volume so you can hear me. This is a New Holland 228 series that is actually based in Europe with one of our multipliers. But again, this is for organic production. And the interesting piece is just the consistency in that cutting distance even between multiple regions for kind of the folks who are interested in that. And just a good old picture of some field clean seed in good condition heading on its way to the dryer in that last section. I’m going to blow … Just with the time, I’m going to try to blow through the following slides because the big questions are how much the seed costs, how long is it going to take to ship, and where am I going to sell this stuff.
What’s the Market Like for Fiber and Grain?
I think that it’s an important note for farmers to understand specifically that before the explosion in 2014, there was already what was then posted as a half-a-billion-dollar products market and now has been reconciled to a billion-dollar import-based hemp products market. This is an older slide from the Hemp Industries Association in 2017 where they showed what type of resulting products were being derived from hemp and with exception to this 23%, all of that is either in the fiber and/or grain category.
And then to push on from that, these are the 2022 estimates by way of New Frontier data. In the interest of disclosure, I sit on their editorial board and find their work to be very good in terms of how their sourcing works. But again, this slide is to drive the point home that these markets are there, and it is up to American producers, processors and alike to work together to ascertain these markets that are readily available here at home. And especially with the implications of the coronavirus, there is a somewhat volatile and renewed interest in seeing that domestic sourcing made available and for folks like ourselves, we are happy to assist any grower who’s making a decision about a process and how to fit their needs best, and we certainly encourage those to reach out with those types of inquiries.
Specifically, for our seed oil and seed cake friends, just to drive that point home, we are looking at this much material imported in 2019, and if you work those numbers back, that’s a significant number of acres that American farmers could be competing for. Frankly, the opportunity is out there. But again, it’s what kind of hemp growth works best for your farming operation before you can make that decision.
Last but certainly not least, I know we’ll be sharing this on the follow-up. For folks who haven’t had a chance to read it, there’s a great article posted by the Economic Research Service at USDA talking about the long-term imports of different products. It just is shocking to me that even since the adoption of the 2014 farm bill, we’re seeing this type of growth without any matriculation to domestic production service.
And again, I think that drives home the point that hemp farming for row-crop style equal to that of CBD, it can be American-made and certainly something we’re supportive of whenever possible. And then this shows you the raw hemp imports, which is even a stranger number considering that the overall growth there as well. And with that, I hope we can take it to questions from there and just … I’m having some difficulty looking at the questions, so I’m going to pull off here, Christian, and let you share your slides from here while we take the Q&A. But thank you for all the participants today. I hope you’ve found value in the conversation so far.
As with all our hemp farming education sessions, we closed our fiber and grain webinar with a live Q&A session.
What is the mass balance of the varieties' planting density and expected bast vs. hurd production?
The reported value – bast fiber content is 28%. And our yield data, we’re expected 10 tons of raw dried product per acre, meaning that of that percentage, 2,800 pounds of bast fiber with a 55-pound seeding rate can be attainable. And that does have an asterisk next to it in that we’re confident in those predictions in states where we’ve been able to trial and reserve the right to adjust those figures for states that have new entries or otherwise in this year. Most importantly, southern states like Texas, Oklahoma, those where we personally have some more work to do, but are very confident in the bast fiber content. If you drove a line from Southern Colorado, headed east, west, comfort levels higher headed north. Still some work to do headed south come this year.
How do you go about evaluating a CBD crop opportunity versus a fiber / grain, or if you had enough land, might you plant both and kind of see how it goes?
To boil it down to a sentence, have you been a horticulture farmer? Tomatoes, you’re probably going to have an easier time tracking into CBD. If you’ve never raised a tomato in your life and you were raised on the plains and grow row crops, fiber and grain depending on your region is the more likely successful crop. And for those folks that are in the Midwest, if you’ve got ditch weed on your property or in somewhat adjacent to anywhere you’re thinking about growing a CBD crop, I would be wary of the value of that product given the likelihood of a seeded crop come the middle of—
If I could add something here, Tom. The thing about farming on the grain and fiber side is that most farmers already have the equipment to do row cropping. That’s what they’re doing already. So, they don’t have to do two things. One is they don’t have to switch to a horticulture model, and two is they don’t have to buy equipment to adapt to it, and they don’t have to start working with labor because horticulture is a very labor-intensive model. And I know myself as a farmer in the past, that’s not the business model that we’re successful with, because that’s not what we do. So, for me, the reason it was always an easy decision is that number one, we have the land. We have the equipment. We have the experience. Now we’re just taking on a new crop.
Where are the markets for processing hemp fiber?
I will say for a handful of groups that approached us in November of 2019, we were able to work on limited sales opportunities for fiber specifically. Those are based in the central Midwest. But I do want to be sensitive to some of the disclosure agreements that I have to be wary of. But I think a better answer to your question is, “Where is fiber really going to have a presence?” And in my opinion, that stretches from Northern Indiana, Illinois, and hugging kind of in a wrap fashion towards the southern states, making a touch up point in Louisiana and making its way into the Carolinas, subject to some change with that in my opinion is the most likely hub for true fiber production, especially considering its historical precedence there. But what remains to be seen as to whether fiber will stand up in places like Texas, South Carolina, and kind of hugging that region nine section is whether the presently available varieties suitable for row crop style hemp farming will acclimate in those regions. Meaning that if we don’t have seeds, us or other providers don’t have seeds that are performing well in those regions, the investment capital to service those regions will be challenging.
I do know of a processor in Lubbock who made a big buzz earlier this year, but I don’t know as to the status of whether they’re taking contracts this year. But as an important note to folks that are interested in fiber, long-fiber production is going to be the hardest to get up and running. But I do think that folks like [inaudible 00:47:10] which is based at North Dakota State University, some of the remnants of some strands so to say will domicile themselves and be proactive in the industry. But it’s a much higher investment cost than setting up a grain or CBD processor, to be Frank, which has been one of the lingering challenges there. And I do think that there are far more grain ready processors and buyers than fiber producer or processors on the market right now, just to be blunt.
Is it possible to make a profit on fiber only?
I think that the profitability of fiber rests on your bast fiber content. In the limited scenarios, that tends to track towards $175 to $200 a ton relative to a lower bast-content-yielding variety where that is more just based simply around the hurd content, and that tends to track closer to 100 to 125. So again, that yield-to-bast fiber ratio is a really critical assumption there. But I’d say on the high end, you’re at 175 to 200 bucks a ton, and if you can crack 10 tons an acre, that’s certainly impressive. But I do recognize that it’s a slippery slope towards that profitability given the right seed for the right purpose and the right region. It’s somewhat of an unknown at a national basis right now.
Yeah. It always gets tricky forecasting markets and what are these crops going to be worth.
For people who live and breathe fiber, you can call any established mill in the world and they will buy that fiber at 6,000 bucks a ton from a processor and there is no shortage of demand. It’s really a supply chain-related issue before you get to that cottonized beautiful hemp fiber that everyone rants and raves about when they get the chance, myself included.
When do you normally cut fiber? When do you take it down?
That’s a good one. Right where you … Seed onset. If you’re a CNC, time to cut fiber. Right? It really is that simple. When your first two seeds show up, walk through your field, you see seeds on every few plants, you have time to get your equipment ready and get at her.
Do you have resources or templates for farm planning and unit economics?
Yeah, I do. Actually, for folks that don’t want to wait until we get the packet out, their Missouri crop or excuse me, Missouri Extension Service, has a nice, easy-to-use table series that’s available on their hemp website. And I know I’ve got some folks listening in. If they wouldn’t mind pulling that so we can get that into the packet for participants, that would be great.
Yeah, we’re absolutely happy to share and send out to anyone that registered whether they joined us today or not as a follow-up as well, Tom. So, whatever we want to get organized, we can send out to them.
I know when I was doing some prior research a year or two back, some of the analysis coming out of Manitoba had costs on inputs-per-acre and expected yield and whatnot, and obviously that’s climate dependent and genetic dependent, etc.
Well, and that gives you all the fill-in-the-blank spaces, but you have to do the due diligence of filling in, to your point, the localized cost figures there, which is why we presently don’t have that kind of tool because it is rife with potential for errors. But happy to offer some assistance on folks that are making those calculation steps, as it is a very critical part of your decision-making.
What does it mean for one of these crops to be next door to a neighbor who might be doing CBD production and feminized crop?
Well, here’s the thing is that … And Tom kind of touched on it earlier. Humidity is a big influence on this. In places like Colorado where we have 2% humidity sometimes for great stretches of time, we have a lot of dry, hot air. So, pollen tends to stay alive and tend to travel great distances. But in places like high humidity, they tend to link up with water molecules fairly fast and the water doesn’t … They don’t like water, either. Hemp pollen is almost completely killed off by contact with water. But here’s the thing is that depending on where you’re at, what your conditions are, how much wind … We get a lot of wind here that never stops. In those kind of places, there’s definitely problems.
But one thing to keep in mind is that typically, and I hate to say it this way, but if you’re the fiber grower, you don’t have a problem. If you’re the grain grower, you don’t have your problem; your neighbor does. So that’s … And some states have different responsibility levels for that in how they set up where you can actually get a license compared to somebody else’s location. So, some states are sensitive to that and try to help other states, particularly ones that have never done this before. They have no idea. They have ideas, but they’re still working in theory. So, this is going to be an ongoing problem, but work with your neighbors. Work with the department of agriculture, your local guys, because they’ll typically tell you where you are compared to other growers, things like that. So that’s part of it. But this is real and it’s difficult to deal with in some environments.
Yeah, and it might be important to note, it might not be happening at this exact moment quite so much, but counties and states typically have pollen maps for vegetable seed production and other grain production. I’m sure that’s going to be more prominent for hemp moving forward. So, get the ball rolling. If your county and state doesn’t have that going for hemp, somebody’s got to urge them to get it started.
In fact, there’s a tool to track that kind of thing. It’s called DriftWatch, if anybody has heard of that. It’s called DriftWatch. I forget where it’s on, what website, but it’s called DriftWatch, and you can look at that. It’ll give you all kinds of information. It was originally set up for over-spray on fertilizer and pesticides and stuff.
Can you give us an idea of the cost for the seeds for these cultivars, and what's the current availability, or should I plan on trying these in 2021?
We still do have stock. Fortunately, or I’d say very fortunately for us, the coronavirus has not been too detrimental to our imports. So, we are … As of this week, all of our seed for sale 2020 is domestically based and for customers that are still outstanding, they are first in line. I would say that with that, unless there is a significant inquiry, we can handle … more than enough to handle inquiries that the result from here. We typically advise folks especially that are small-scale farmers in … because of other constraints, to consider a minimum of 40 acres on the grain side and a minimum of a hundred acres for fiber production because the cost of production shared across those acres makes it feasible for you to participate.
I think one of the biggest issues that folks have is getting to a minimum scale in grain and fiber production where it’s economical for them to continue in the out years. In terms of pricing, our bag sets are 35, 500, or 1,000 pounds. For a set of 35s below 500 pounds, we price at 11.75 per pound. For 500 and up, we start at $8 on the B Lab and 10 on Hinola, and for orders in excess of five metric tons, the standard is a 10% off and orders that go above 10 tons, we will make aggressive pricing to discounts made available to folks. Our hubs are based in Chicago and Denver for distribution. So, from execution, we are as little as three and as many as 10 days to delivery just depending on how our phytosanitary inspection to ordering or staging release comes. Because we do try to be cost effective by staging multiple orders in the same region together, and those costs are shared amongst that pool of growers so as to limit individual transaction fees that our logistics folks levy on us.
To give you an idea of production-wise, grain, like Russ said, is somewhere between 22 and 25 pounds seed laid to the acre depending on your germ rate. And for fiber, our recommended is between 50 and 55 pounds laid. Again, compensated for your individual lot germination rate. And for certified seed folks that are on here, our germ range this year was 87 to 96 with an average of 92. That is something again that we’re particularly proud of because in the last two years, we’ve partnered, invested or otherwise heavily in seed conditioning equipment so as to make these field emergence rates competitive with other expectations by the growers.
What are you doing with your field trials and working with the different programs?
Yep, and I’ll premise this with corona permitting because I have had some pretty difficult conversations with university partners that are affected by how their administration will impact their ability to be out in the field this year. But at present, we have committed to servicing 25 land grant institutions and four private trial partners with a minimum of five and up to 10 acres of seed donated to further validate the performance of these seeds. Some of you may be familiar with what’s called the U.S. Multistate Initiative that was started by David Williams, who has unfortunately passed away. Under David’s tenure, they had six land grants participating. Last year it was 12 and this year, 25 land grants have committed to participating, and that covers all major USDA regions of the United States. It is something that is working to be in concert with what occurs in Canada through the Canadian Seed Growers’ Association. And in total between those participants in the replicate sites, it is a minimum or it’s roughly a hundred production sites following planting. We will work to disseminate a list of which sites will be available as field days to the public and are also working to see that further disseminated through our direct channels or our indirect channels depending on the particular state.
And you’ll get a chance to meet Russ and I because that’s one of our favorite days is going to see our plants somewhere else. So, we’d be happy to start conversations about 2021 in that period. It hasn’t been publicly made available yet, but we are intending to have a field day of our own here in Colorado with the rescheduled NoCo Hemp Expo which we’ve been a longtime participant and supporter of, and happy to see that Morris and his company were able to find a date that fits well with the most … as I say, the most beautiful time of the year in field being August. Anything else we could address?
Is the fiber cut in the field and retted in the field and then bailed, or how does it work? What's the harvest and post-harvest process? And is there a big difference between long fiber and bast?
Sure, and I’ll start again with the latter question. Generally, people refer to the bast fiber content along or colloquially to … or we call it long fiber, but what it really is as a category is bast fiber. And that is the holy grail of fiber production in hemp.
The retting process is the natural, or let’s say environmentally driven means of loosening the bast fiber from the hurd in a field setting. Under traditional circumstances, all fiber production is cut, put on one side and then swathed in the other direction so that that release is consistent. But I know, Russ, you got something to say on this one, but I do like to emphasize that the amount of retting that you allow a particular lot to occur should be driven by the needs of the processor who intends to purchase it.
If you don’t observe those requirements, it runs the risk of that lot not being as valuable as it might have been.
We’ve got hurd fiber and bast fiber and depending who the buyer is, he’s going to tell you what he wants. He’ll tell you very clearly what he wants, and pay attention to it because he’s not going to pay you for the product unless you do exactly what he says. So yes, it is cut with a combine swather. It is put in a swath. They usually use a rake to flip it so you can drive both sides. Depending on how long the retting process takes, again that’s going to be based on the requirements of the buyer. But one thing to keep in mind, while it’s retting, it’s actually releasing nutrients into the soil, and that’s kind of a good thing. But typically depending on the weather. If it doesn’t rain for three weeks after you put it on the ground, it won’t ret very fast. It requires water as part of that process.
And just while we’re on the topic in the … what I see as one of the real needs for hemp in the U.S. to take off is for more controlled retting processes to be developed or adopted from similar plants. Some of the older means of inducing retting are quite caustic, but fortunately as a seed company, we are aware of very interesting rapid decortication methods that people are tinkering with right now that I see as a very critical feature of reducing the risk that field retting presents on growers and in term processors, alike.
Where's the Hinola been tested? And, just to be clear, you said you're recommending planting 40 acres of grain and 100 acres of fiber to be profitable. Is that kind of the rough math?
Yeah, a minimum of 40 acres for grain at 20 pounds seeded per acre and a minimum of 100 at 55 pounds seated for fiber. Hinola, I could give you a full list, but just regionally, we haven’t gone farther south than Kentucky. To date, we focused what we had in seed availability in the northern states where grain has been more prevalent. And for brevity’s sake, our most longstanding testing scenario of Hinola has been Colorado to Montana and we are recognized, or the varieties that is, are recognized as approved to be certified and offered reciprocity in states that … or state programs that allow for that under their hemp programs. As an update to this year, Hinola is going full core press on all of those 25 land grants, and the seed is on its way as of today. So, I’m certainly looking forward to seeing the results so I have a better answer come next year on that topic.