USDA released its first batch of 2022 planting data in August, revealing that —for the first time since the 2018 Farm Bill— hemp grown for fiber will represent the biggest portion of outdoor planted hemp nationally. The overall acreage is estimated to have declined by 42% to 20,496 outdoor planted acres. As a portion of the whole, hemp planted for flower dropped from 61% in 2021 to an estimated 34% of all outdoor planted hemp. Hemp for grain/seed accounted for 26% of the whole last year and is projected to total 27% of all outdoor planted hemp in 2022.
So has the Industrial Hemp Era begun in earnest? Not exactly, but there’s reason to be optimistic.
First, it’s important to realize that flower hemp declines don’t represent a mass movement of farmers walking away entirely. The data shows that flower hemp acreage is the biggest source of the overall decline, falling by about 15,000 acres, or a whopping -68%. However, that drop isn’t a result of significantly fewer farmers planting hemp for flower. The average plot size has dropped from 23 to 8 acres (-65%) for hemp flower, so it seems that a steady number of farmers have been willing to bet on planting hemp flower in 2022, but they are betting a lot more conservatively than before.
Though most farmers are probably too removed from the manufacturing process to be aware of this, the CBD oversupply crisis of 2020-21 was mitigated largely by the emergence of new products converted from CBD like Delta-8 THC. Hemp Analyst Chase Hubbard of Fastmarkets estimates that at least three quarters of all hemp crude extract is being isomerized to cannabinoids like Delta 8. As those products have increased in demand, the leftover stocks of CBD hemp have begun to find a path to market. But now that most of that surplus has been processed, the reduced hemp flower acreage could combine with the continued surge in popularity of hemp-derived cannabinoid products to create an upward pressure on the price of flower hemp in the coming year.
While hemp grown for fiber (bast and hurd) has risen precipitously according to the USDA’s numbers, with planted acreage going from 4,633 in 2021 to more than 8,000 in 2022 (+73%), much of that yield potential may not be realized. It’s true that industrial production capacity for fiber hemp is beginning to grow in earnest domestically, and the 2022 acreage numbers are a sign that farmers are beginning to experiment with the crop, but markets for hemp biomass or hurd are not yet robust enough to power fiber hemp’s development as an industrial commodity.