Canada: Canola growers turning to more profitable hemp

August 20th, 2014 – Jim Rogers admits it: He’s not sure how this experiment of his will work out.
Picture 69Mr. Rogers is a lifelong farmer – a wheat-and-canola kind of guy. But he is dabbling in something new. He sowed hemp in some fields this year, hoping to cash in on a growing slice of Canada’s agriculture industry. Mr. Rogers did the math before he put seeds in the ground and figures his hemp crops could be worth much more than traditional crops. At today’s strong prices, experts say farmers can earn twice as much growing hemp as they can growing canola.

“It seems like it is going to pay,” says Mr. Rogers, looking at the 80 hectares of hemp he is growing on the edge of Jackfish Lake, about 170 kilometres northwest of Saskatoon. “I would’ve never done it if we didn’t pencil it out really good.”

And, he adds, “it is kind of fun growing something different.”

Mr. Rogers is part of a budding industry, one boosters hope will take off in the same way canola did. Advocates say hemp has a glowing future in the food industry.

Hemp oil can be used in products such as salad toppings and hummus. The kernels can be split and sold as hemp hearts. Hemp can used in everything from nutrition bars to coffee, flour, ice cream and pet food. Proponents trumpet its nutritional value. Unsaturated fat – known as the “good fat” – makes up 39 per cent of a hemp seed’s composition; saturated fat represents 5 per cent; protein accounts for 33 per cent; carbohydrates 12 per cent. It’s high in dietary fibre and free of gluten. There is also a market for the plant’s stalks, for such uses as clothing and rope, but it is not as developed in North America as it is in Europe.

But hemp needs more than hot prices and health-food nuts to sweep the Prairies.

It needs risk-takers like Mr. Rogers, one of the first farmers to grow the crop in this corner of northwest Saskatchewan.

It also needs plant varieties with more favourable production and health characteristics, and the government to ease regulations that restrain the industry.

Hemp and marijuana are cousins, but hemp has only trace amounts of delta-9 tetrahydrocannabinol, the chemical that gives weed smokers their high. Health Canada regulates hemp’s production.

Farmers planted between 34,000 and 36,000 hectares of hemp in Canada this year, according to estimates from the Hemp Trade Alliance, up from 26,700 hectares last year and 12,000 hectares four years ago. (A hectare is about twice the size of an NFL field). By way of comparison, grain producers had seeded nearly nine million hectares of canola by June 10 this year, according to a report from Statistics Canada released June 27.

Hemp processors are on a tear too. Manitoba’s Hemp Oil Canada provides seeds to farmers, contracts their production before it is planted, and processes the seeds into products like oil, hemp hearts, and powder that can be used in other foods. Hemp Oil’s founder, Shaun Crew, expects his company to process about 20 million pounds of hemp seed this year, compared with 12 million in 2013 and seven million in 2012. Hemp Oil, which is building a $13-million processing facility, controls between 30 per cent and 40 per cent of the hemp market, Mr. Crew said.

Because processing facilities are the big buyers, they heavily influence what farmers get paid.

“We kind of price ourselves being very sensitive to what the selling price is on canola, because often we’re displacing canola acres when we are growing hemp,” Mr. Crew said. “It has to be a better deal for the farmers.”

Hemp fields produce about half as much grain as canola fields, experts say. But what it lacks in yield, it makes up in price. Farmers can net between $620 and $1,240 per hectare of hemp, compared with $495 a hectare growing canola, Mr. Crew said.

The crop’s profitability comes with a catch.

“It is more work [for farmers]. Twice the profit, but twice the work,” said Kevin Friesen, operations manager at Saskatoon’s Hemp Genetics International Inc.

Hemp plants have an aroma similar to marijuana – Mr. Rogers says it’s more like crushed tomato leaves. They’re extremely tall, making them difficult to harvest. It is tough to see Mr. Rogers after he walks a few feet into some parts of his field. The stalks can grow well beyond two metres. They are thick and tough, making them hard on machinery. Stubble can be left a metre high. This is a problem: farmers can burn the stubble, bale it with hopes of selling it, or work it into the soil. Working it into the soil is tricky, because it takes about a year to break down and can cause problems seeding the following spring. Mr. Rogers is going to try to work the stubble in.

This is where plant varieties come in. Companies are trying to breed plants that produce a higher yield, do not grow as tall, and come with other farmer-friendly characteristics. Hemp is resistant to frost, pests stay away and further genetic modifications through breeding will make it even more attractive. Hemp Genetics has introduced three varieties of hemp, with another about to debut, Mr. Friesen said.

Canola had a huge head start when it comes to breeding more favourable genetic properties, according to Russ Crawford, the president of the Hemp Trade Alliance.

“If we’ve been able to work with hemp as we have with canola over the past 60 years, I don’t think there’s a doubt in my mind, at least, that it would be ahead of canola right now,” Mr. Crawford said. “There needs to be some catch-up.”

Farmers are expected to seed 40,470 hectares of hemp by 2015 and 101,170 hectares by 2018. Consumer demand, driven by the processing facilities, must grow first. It is rare for farmers to grow hemp without first having contracts in place from processing facilities.

Regulations also make farmers reluctant. Mr. Rogers said he has a binder five centimetres thick full of government documents necessary to grow hemp. Hemp advocates want the government to back off, arguing the plant has very low levels of THC and breeding could further reduce this amount.

Mr. Rogers complains about the paperwork, is nervous about harvest, but smiles when he looks at his hemp crop.

“I’m a risk-taker, “he said. “Give me a call in December and see if I’m still happy with hemp.”


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