Industrial hemp acres in Texas were expected to rocket after legalization, but the crop has yet to take off in a state that presents many challenges to it as a profitable commodity, according to a Texas A&M AgriLife Extension Service expert. If you onw a business in this industry, call us when you are in need of an industrial property valuation.
There was no guidance for hemp growers in the state – whether for CBD, fiber or grain – until the Texas Department of Agriculture, Texas A&M AgriLife Research and AgriLife Extension got involved after the Texas Legislature approved production by licensed operators in late-2019, said Calvin Trostle, Ph.D., AgriLife Extension agronomist and statewide hemp specialist, Lubbock.
Hemp crops are regulated by the Texas Department of Agriculture, TDA, and tested for the psychoactive property THC. Any hemp crop with THC above 0.3% can be impounded and destroyed, so producers must be extremely careful to not allow their CBD, fiber or grain crops mature beyond that threshold.
Since legalization, hemp hysteria has waned due to dramatic market changes and research-based reality checks regarding the challenges and risks of growing the plant in Texas climates, Trostle said.
AgriLife Extension’s initial information regarding varieties suitable for various production models and marketing potentially helped would-be producers avoid millions of dollars in losses over the last two years, he said.
“As an alternative crop, the hemp industry in Texas is still in its infancy,” Trostle said. “There is a massive amount of education going on, but we’re still trying to determine what varieties are adaptive so that we can help producers avoid headaches.”
In early 2019, economic projections of $40,000 per acre profits fueled a surge of interest in producing hemp for medicinal CBD applications. But by late 2019 the CBD market was saturated by established growers in other states and prices cratered.
Around 132,000 acres of CBD hemp were harvested in the U.S. that year and much of the crop was never processed. In 2020, about 65,000 acres were harvested, and as little as 40,000 acres in more than 40 states could meet CBD demand in 2021.
“It doesn’t take many acres to produce CBD for the end-product,” Trostle said. “Around 25 acres producing average yields can fill 1 million bottles that contain about 1 gram of CBD.”
In 2020, TDA reported 2,078 acres of the 5,000 permitted acres for industrial hemp were planted, he said.
Fiber may be the future for Texas hemp
Fiber might be a viable option for hemp production in Texas, but much more research is needed to determine the correct varieties and management practices to make it profitable, Trostle said. Reducing seed costs would also help.
AgFax Weed Solutions
There were several poor trial results and some failures in AgriLife Extension trials around the state in 2020 due to late plantings, poorly adapted varieties, poor seed quality and low germination rates, while some fields suffered from stresses like pests, heat and drought. Weed control was also a big issue in hemp fields.
Trostle said hemp may be a fragile crop in Texas conditions. Plants, especially those grown for fiber and grain, perform better in northern climates at or above the 40th parallel north line – about where Nebraska and Kansas meet, he said.
“The challenge we are trying to address in fiber and grain varieties is that most types are adapted to latitudes further north – Canada, Ukraine, Poland, France – and are very photo-period sensitive,” he said. “It’s not the heat units and sun they need like cotton, it’s longer summer days for growth and then increasing length of night to trigger reproduction. Plant reproduction is triggered far too early this far south.”
Trostle said some trial plants have entered reproductive stage at 6-7 inches, whereas under the adapted conditions they would be 6-7 feet tall before they begin flowering. Chinese varieties are showing promise, but there are still many questions and concerns to address before Texas A&M AgriLife experts can recommend management strategies that could make hemp consistently profitable.
Better seed sources would be a big step for reducing input costs, Trostle said. Producers can pay $1,200-$3,500 per acre for certain CBD varieties, especially if they are purchasing all female seeds, as female plants produce CBD.
As a comparison, planting corn can cost $75-$100 per acre, and sorghum seed costs can be as low as $8 per acre, Trostle said.
“There are some seeds we are looking at, including some from China, Australia and Italy, that are showing some promise, but until they are produced here in the states and available at much lower costs, it will be difficult for Texas to be a big player in the fiber game,” he said.
There is also potential for hemp as a grain crop that produces seed oil much like canola, soybeans and sunflowers — as highly nutritious seed hemp hearts or as meal combined with other grains for animal feed.
But the industry faces similar problems, and Trostle said there has not been any sufficient testing for cannabis’ biomass as an animal feed.
Beyond production challenges for hemp as fiber or grain, there are no established processing facilities or consistent buyers looking for Texas-grown fiber or grain. Trostle said these realities tamped the excitement among producers surrounding hemp at dozens of AgriLife Extension presentations around the state over the last two years.
“Producers got past the hype and started looking at the economics and saw it wasn’t a good option for them, at least for the time being,” he said.
Texas hemp will take time, research, investment
Trostle said there are successful CBD hemp producers in Texas, including small organic operations that produce hemp for CBD and processes it to produce products they sell direct to consumers under a private label. They are the exception and are run by producers with advanced knowledge about the plant.
“There are very few producers who are just growers because the grower value is only 1%-2% of the retail value, which is very low by any crop standard,” he said. “The ones who are succeeding are integrated vertically and may be producing organic products and capturing more of the end dollar.”
The industry will likely move beyond small-scale, hands-on production to the economy-of-scale, mechanical operations in the future, Trostle said. But it will take bringing input costs down and establishing a stable market for Texas hemp.
Trostle said AgriLife Research scientists and AgriLife Extension specialists continue to move forward on several projects related to variety evaluations, plant breeding and end-use potential and that Texas hemp organizations are seeking a viable future for the crop.
But as early interest in hemp diminished, so has funding for research, Trostle said. Some Texas A&M AgriLife projects are nearing the end of their funding stream while others were self-funded research driven by scientists’ curiosity about the plants.
“The fantasy of growing hemp and making tens of thousands of dollars per acre is behind us, and now we’re looking at how to make hemp a viable option for growers,” Trostle said.
“I think a lot of people are glad to see Texas A&M AgriLife involved and bringing reliable science to the table, but they don’t always like to hear what we’re saying … the facts we report. I think there is a future for industrial hemp in Texas, but it’s going to take time, effort and investment.”
AgriLife Extension district reporters compiled the following summaries:
Temperatures were hotter with humid conditions and no precipitation. Some crops needed rain, but it is probably too late to help corn improve. Corn was maturing rapidly and mostly in the denting stage. The second cut of forage grasses was baled, and yields looked good.
Wheat was harvested, but quality and yields were disappointing. Sorghum looked excellent and coloring with few pests to date, but producers were monitoring pest pressure. Cotton vigor improved as temperatures increased and soils dried. Cotton was mostly flowering, and some ground spraying was ongoing to protect the first developing bolls against thrips and fleahoppers.
More rain, 2-8 inches in areas, put cotton planting and wheat harvest even further behind. The remaining wheat looked poor, and there were limited cotton acres planted. Planted cotton was off to a good start, but some saturated fields looked poor to fair. Wheat producers reported below-average yields of 35-40 bushels per acre.
Corn looked decent in some areas and patchy in others. Sorghum stands were uneven as well with some fields showing pre-boot to heading-out stages. Some crop fields and pastures were underwater. Peanuts were growing well. Rains slowed hay harvests, but producers were able to bale cuttings. Bermuda grass was starting to take off.
Cut hay fields were fertilized, and second cuttings should be good quality and come soon with some sun. Grass was starting to grow, and Sudan grass fields looked good. Cattle looked good with good grazing availability. Calves and stockers were making good gains.
Wet conditions continued with daily rainfall in many areas that have mostly halted farming operations. Standing water was an issue in some areas. Rains were good for livestock ponds and pastures. A few growers were able to complete timely fungicide applications to soybeans and herbicide applications on cotton.
Cotton looked like an average season. Grain crops were looking good. Some sorghum was harvested. Corn was at or nearing maturity, and some ear sprouting was reported. Rice was heading out and looked good. Hay fields were ready to harvest, and some were being re-fertilized for second cuttings. Livestock were doing well.
Temperatures were mild for July. Spotty rainfall was received in much of the district. Producers in many counties harvested their hay between rain showers. Pasture and rangeland conditions were good. Subsoil and topsoil conditions were adequate. Watermelons, peas, sweet corn, beans, tomatoes and other vegetables were being harvested.
Livestock were in fair to good condition. Fly populations continued to increase. Armyworms and Bermuda stem maggot infestations were on the rise. Wild pig activity also increased.
The district received between 8-15 inches of rain over the past 10 days, and temperatures were in the 80s. Fields were wet. Tanks were overflowing, and many water gaps were broken. There were reports of horses and cattle lost to flash flooding.
More on Cotton
Most cotton was growing well with some fields standing in water. Playas and terraces were all full. Based on scouting, cotton was averaging 7.5 total nodes with a range of 2 to 10 nodes. Based on current plant mapping data, bloom was expected around July 22. Peanuts were doing very well. Most fields were blooming and very near pegging. Grain corn ranged from just planted to tasseling. Cattle were in good condition.
Northern and central parts of the district reported short to adequate soil moisture while southern areas reported adequate soil moisture. Most counties in the southern part of the district received beneficial rains, but hail was also reported. Heavy rains in some areas washed out some planted acres.
Pasture and rangeland conditions were fair to good. Winter wheat and oat harvests continued. Corn and soybean conditions were good to excellent, and sorghum and cotton were fair to good. Peanuts were in good condition. Grass was growing, and producers were fighting weeds. Livestock were still receiving some supplemental feed.
Topsoil moisture was short to adequate. Temperatures were rising, and almost 0.75 of an inch of rain was reported. The rain did not slow hay producers down. Pastures were in good shape, and crops continued to progress with good weather.
In Hunt County, the last wheat harvest was delayed because of wet fields. Producers were following wheat with soybeans and grain sorghum. Cattle have plenty of grazing. There was one report of armyworms.
Temperatures dropped, with daytime highs in the high 70s to low 90s. Monsoon-level rainfall returned to the district with rainfall totals up to 11 inches in places with the higher elevations receiving larger amounts. Flash flooding was a problem due to dry, packed soil with little vegetation to slow runoff.
Creeks flowed for the first time in several years and rangeland conditions were already improving. Despite the rain, drought conditions persisted. Producers continued to water cotton and pecan trees and feed livestock and wildlife.
Conditions were hot, humid and dry, and all areas needed rain. Producers were busy harvesting wheat, cutting and baling hay and irrigating forage crops where possible. Recent rains helped rangeland and pastures significantly. Some producers completed wheat harvest with fair yields reported, but many producers were expressing disappointment with 20 bushels per acre on dryland and 30 bushels per acres on some irrigated fields.
Cotton planting continued, and planted acres were off to a good start. Grasshopper, cutworm and other insect pest numbers were increasing. Livestock looked good. Feeder cattle were $3-$5 higher per hundredweight while slaughter cows/bulls were $2-$4 lower per hundredweight.
Some operations were still culling herds deeper with some liquidation taking place. Burn bans remained in effect in many counties. Walnut caterpillars were a problem for pecan producers. Sorghum fields were in flowering to silking stages.
Areas received rain with more in the forecast. Some areas received heavy rains that left fields and pastures saturated. Rice was getting closer to heading out. In Grimes County, lots of heavy rain has left pastures very saturated. Rangeland and pasture ratings were very poor to excellent with good ratings being most common. Soil moisture levels were very short to surplus with adequate being most common.
Scattered showers were reported across the district. Pastures and rangeland conditions improved in locations that received rains. Hay harvest continued as conditions allowed. Corn continued to mature, and the harvest looked to be a couple weeks away.
Guadalupe County reported sorghum was turning color and looked very good. Caldwell County reported that the cattle, sheep and goat markets were steady. Livestock were in fair to good condition, and wildlife were in good condition. Gillespie County reported lots of fawn sightings.
Hot temperatures continued throughout the district with some scattered showers falling in most counties. Atascosa and LaSalle counties reported up to 1.5 inches of rainfall while Live Oak County reported 2-7 inches. Several other counties reported half an inch to 2 inches of rainfall. Rains halted fieldwork in wetter areas.
Early planted peanuts were pegging. Corn was denting, and sorghum was turning color and producing seed. Grain sorghum was maturing quickly, and some producers were harvesting. Live Oak County reported sorghum harvest was starting. Cotton fields were blooming, and early planted fields were setting bolls. Rains were likely to improve cotton yields.
Pasture and rangeland conditions were poor to good and improving in areas that received rains. Very little supplemental feeding of livestock was taking place. Food plots, including grain sorghum and sunflowers, continued to seed out. Mesquite beans were dropping and providing quality nutrients for livestock and wildlife.
Beef cattle conditions continued to improve. Stock tanks were replenished. Cattle prices increased substantially, and sale volumes were lower over the past month following rains. Producers were busy harvesting hay.
Whitetail deer were fawning, and quail were nesting and hatching. Wildlife prospects were looking good. Watermelons and cantaloupes were still producing. Sesame fields looked good. Citrus trees remained in poor to bad condition.