Industrial hemp is an agricultural product that is cultivated for use in the production of a wide range of products, including food and beverages, cosmetics and personal care products, nutritional supplements, fabrics and textiles, yarns and yarn fibers, paper, building and insulation materials, and others. The value and volume of production of hemp reflect the infancy of the industry, but eventually it will take its place alongside basic crops such as corn and wheat. Commercial hemp is a new U. S.
agricultural market, but as with all agricultural crops, the market will continue to grow and eventually hemp will become a basic crop, just like wheat and corn. But what is the current situation of the hemp market in terms of value and volume of production compared to more mature physical markets? And what can we expect to see in the short and long term for this fledgling American crop? To give the United States some context, we can look at the current size of the most mature markets. Many differences between hemp and other commercial agricultural crops stem from the immaturity of the hemp market. In more mature markets, the number of market participants has long experienced strong consolidation. This is more noticeable in global markets compared to domestic markets only.
Research by Oxfam, for example, shows that the ABCDs of agriculture (ADM, Bunge, Cargill and Louis Dreyfus) move more than 75% of the cereals on the world market. In this way, mature markets are consolidated and isolated with extremely high barriers to entry for new participants. All the main actors know each other. In mature markets, a good trader has up-to-date estimates of total market supply and demand. It is essential for evaluating current market values and forward prices.
In today's hemp market, there are too many unknown variables to provide a clear picture. According to that report, we believe that demand for refined hemp products will be significantly lower than what most expected, but we won't have a clearer picture for six to 12 months from now. The hemp market still has many challenges to overcome on its path to maturity and liquidity. See the “Evolution of the Commodity Market” chart above. The market is in urgent need of working capital along with adequate storage. Julie Lerner is the founder and CEO of PanXchange, Inc., while The Cannabis Business Times interactive legislative map is another tool to help growers quickly navigate state cannabis laws and find news relevant to their markets.
An official website of the United States Government Official websites use .gov website belongs to an official government organization in the United States. The National Hemp Production Program establishes federal regulatory oversight of hemp production in the United States. The Department of Agriculture (USDA) will approve plans submitted by states and Indian tribes for domestic hemp production and establish a federal plan for producers in states or territories of indigenous tribes who choose not to administer a state or tribal plan, provided that the state or tribe does not prohibit hemp production. Read on for information on hemp production plans, guidelines for sampling and testing procedures, elimination of plants that do not meet necessary requirements, and licensing requirements. This should give you a good idea of how much non-specialized CBD-free industrial hemp will be marketed both in terms of price and volume. The Department of Agriculture (USDA) will issue regulations and guidelines to implement a program that creates a coherent regulatory framework surrounding hemp production in the United States.
But what is the current situation of the hemp market in terms of value and volume of production compared to more mature physical markets? And what can we expect to see in the near and long-term future for this fledgling U. S crop? It's the fact that dogs wag their tails and it's all part of the hype that hemp will be the panacea for farmers' losses in traditional crops. On the contrary, the current hemp market is at least three or five years away from this consolidation and level of trust between actors.
