Orange County farmers are projected to grow one-third to one-half of the CBD hemp that will be harvested in the Hudson Valley this first year of explosive interest in the crop.
“Our preliminary surveys indicate there’s 500 to 700 acres of hemp in Orange County of the 1,100 to 1,500 acres that have been planted in the Hudson Valley,″ said Maire Ullrich, agricultural program leader at Cornell Cooperative Extension Orange County. “And about 60 to 80 percent of that is in the Black Dirt.”
In comparison, the U.S. Department of Agriculture’s Farm Service Agency reported 2,654 acres were planted in the Black Dirt region’s signature onions last year.
Ullrich, a member of Cornell University’s new hemp team, said interest in growing hemp for grain or fiber – the initial focus of New York’s experimental program in 2016 – has virtually evaporated as state and federal policies have changed.
In 2017, a handful of Orange County farms grew that so-called “industrial” hemp. Last year, only one grew it and this year, nobody is growing it.
In a matter of months, Ullrich said, farmers pivoted to high-risk CBD hemp from low-risk industrial hemp and the prospect of profits on a scale rarely seen in agriculture, fueled by a seemingly limitless market for the oil extracted from the plant.
Scientifically, cannabidiol, or CBD, hemp comes from the same plant family as marijuana but has a different chemical composition and doesn’t produce a high. Its oil, rich in antioxidants and omega-3 fatty acids, is in high demand for food, body and health care products that primarily claim to provide stress and pain relief.
“There’s the potential to gross $60,000 an acre and there’s no denying the great attraction in that kind of payout,″ said Ullrich. “Even after the cost of growing, you could still net $40,000. Double, triple your money, that never happens in agriculture. Farmers are more used to a 10 percent return and 2 percent profit margin.”
Maire Ullrich, a member of Cornell University’s new hemp team, says farming is all about risk but growing CBD hemp is in a class by itself. Among the risks that Cornell points out to farmers are:
Cost/seed: CBD hemp seeds cost about $1 apiece and are started in greenhouses to avoid in-field loss to balky germination. Finished transplants cost about $2 or $3 apiece and about 1,500 to 2,000 of them are needed per acre. Tomatoes generally considered the most expensive crop, run about 50 cents a plant.
Seed: Seed varieties are derived from cannabis, the same plant family as marijuana, and are highly variable. Standards are still being developed to provide some guarantee about what concentration of CBD they will produce. The higher the concentration, ideally between 10 and 15 percent, the more valuable the crop.
Pollination: Only female plants produce CBD and their pollination can dramatically reduce the concentration. Fields have to be constantly monitored over the four-month growing season to spot rogue males or pollinated females and remove them. Wind-borne pollen can travel at least two miles.
Insects/diseases: Susceptibility of CBD hemp to pests is still being assessed. Regardless, no organic or synthetic pesticides are labeled for use on the crop.
Cost/labor: Growing and harvesting CBD hemp is more labor intensive than most crops; only tomatoes come close and they are a distant second. Many farmers are planning to hand-harvest in the absence of readily available and suitable equipment that can handle the crop’s tree-like stalks.
Weather: Weather – too hot, too dry, etc. – can affect the crop’s quality and value. Plants tend to develop more tetrahydrocannabinol, or THC, the chemical compound that produces marijuana’s high, when they are stressed as well as when they age, a potential issue if wet fields delay harvest.
Crop insurance: The federal crop insurance program does not cover CBD hemp. The expectation is that it will take three to five years to collect the data necessary to set a policy and premiums.
Harvest: The crop can’t be harvested until a state inspector has tested the concentration of THC. If the THC content is 0.3 percent or higher, the crop is then defined as marijuana and is illegal. The state has yet to decide what happens then.
Regulation: The state and federal government are still creating regulatory frameworks for CBD hemp that will extend to the plant’s extract and its use in consumer food and non-food products. The regulations ultimately will affect the market for the crop.
But the daunting risks associated with growing an emerging crop for an emerging industry has caused some Hudson Valley farmers to pause, despite having obtained state permits to grow CBD hemp.
“You don’t know what you’re getting in terms of seed and you don’t know what you’re going to be facing in terms of food safety issues,” said Rick Minkus of Goshen, one of the Black Dirt region’s biggest onion growers. “Food safety is huge; people are putting this in their bodies, on their bodies. It’s going to have to be regulated at some point.″
His neighbor, Andrew Cavallaro, told NBC’s Channel 4 in a June 14 report on the CBD craze that the family has gone all in on hemp after trialing it for two years.
“Everything slowly has deteriorated to where you just can’t make any money,″ said Cavallaro, who sold all his onion-specific equipment last year. “So if it (hemp) doesn’t work, we’re gone.”
Cavallaro, and another Black Dirt farmer, Frank Dagele of Florida, N.Y., are growing and selling their hemp through the new farmer-owned Hempire State Growers Hudson Valley cooperative. Other farmers are charting their own course.
The Pawelski brothers, who grow onions side-by-side in Goshen, found themselves divided on whether to invest in hemp. Brian Pawelski and a partner have planted 30 acres and Chris Pawelski has planted none.
“It’s the Wild West and I’m staying on the prairie,″ said Chris Pawelski. “In the short run, it scares me because it’s highly risky and expensive to grow and there’s no crop insurance. In the long-run, there’s no proven long-term market – and may not be once the FDA (U.S. Food and Drug Administration) gets involved. If somebody gets sick or dies from a CBD product, it’ll be all over.”
Brian Pawelski, however, is excited about having a new opportunity and confident about meeting the challenges – to the point that he and his partner are planning to process the crop and extract the oil themselves.
They have also ordered a specialty harvester from Colorado, where the hemp industry is more advanced, on the theory it will ultimately be cheaper than hand-harvesting.
“It’s rare that you get the chance to be in on the ground floor of something new,″ said Brian Pawelski. “Sure, there’s a lot of risk but there’s a lot of potential for reward too.”
Brian Ford of Westtown, whose family owns Orange County’s largest dairy farm, said he lost 80 percent of his CBD hemp crop last year because of the wet weather but is still growing it again this year, and on a larger scale – 25 acres instead of 15.
“My brothers think I’m crazy,″ said Ford, adding he expects the family will exit the dairy business soon and he needs to find a new way to earn a living.
Ford said he and his partners grew their own transplants and, like Pawelski, intend to process the crop and extract the oil themselves – and perhaps also develop their own product line. They have formed two limited liability corporations, Black Dirt Canna and Black Dirt CBD, toward that end.
“We’re doing everything the old-fashioned way, by ourselves, by hand, so we can have as much quality control as possible,″ said Ford.
Chip Lain of Pine Island, Ford’s partner in another emerging crop venture, growing malted barley for the craft beverage industry, said his reservations about hemp simply reflect a full plate.
“I just have no more space to add any other enterprises to my life,″ said Lain, whose primary business is growing turf. “But if this hemp thing takes off and it becomes clear that it will be a successful venture, I would consider jumping in and possibly cutting out one of our other crops.”