Although hemp was previously listed as an ineligible commodity for the Coronavirus Food Assistance Program (CFAP), meaning hemp farmers could not receive aid from the CARES Act, the U.S. Hemp Roundtable sent “official comments” to the United States Department of Agriculture (USDA) urging them to include hemp in the CFAP program.
“The COVID-19 pandemic and response has wreaked havoc on hemp farming, resulting in significant disruption to the industry,” the letter states. Hemp does not have established market prices because it is a new industry, so the prices are harder to track and not reliable under normal circumstances.
The comments include data demonstrating a price decline of between 19 percent and 46 percent between January and April 2020. This data shows a severe decline that is higher than the 5 percent price decline needed to apply for the financial aid. The U.S. Hemp Roundtable said compiling the price data was a “tall order” because hemp is a new industry and doesn’t have widely published price data.
The letter includes monthly data from two sources, Hemp Benchmarks, and PanXchange, which focus on the prices of hemp-derived cannabidiol formulations (CBD). The roundtable says this includes the “overwhelming majority of hemp crops cultivated by U.S. farmers. The data also showed other concerning trends including little fluctuation in prices and a shrinking range between low and high prices. The data also showed that hemp prices have dropped by about 80 percent in the last year.
Julia A Lerner, CEO of PanXchange, mentioned that many growers entered tolling agreements to process the biomass into oil or other refined products when they were unable to sell biomass after the harvest last year. Because of the typical process used in the hemp industry, many of these hemp farmers are still waiting for the payments for their 2019 crops.
“Given the clear data demonstrating significant price drops during the COVID-19 crisis – far greater than the agency’s benchmark of 5% – we urge the USDA to supplement the commodities currently listed in the CFAP regulation by including hemp, and issue another Notice of Funding Availability listing hemp as an eligible commodity for CFAP payments,” the letter said.