It was really tough for me to put together this panel.
I think I'd run out looking for people since I wanted to get some of the best because my perspective
is Wisconsin is behind. We're way behind, sort of, on this hemp world. There's at least
14 states that have more years of experience than us in hemp
production. At least 10 states that more permitted acres. You know, this is like
being in Utah 20 years ago whenever they started going into dairy,
you know, it's like, they were way--they weren't in the game, but now, you know,
there's some large operations in places like that. That's how we are with hemp.
We're way behind everybody else. You kind of saw the Canadian, where they are,
they're way ahead of us in terms of years of experience. So what we gotta get
started though, and so, there's a pamphlet that some of you might
have picked up to hear Bernie and amber Emily from UW River Fall. They
helped us by doing a survey and I want to focus on these
two points here.The sources of start-up capital for Wisconsin on hemp
producers and then where they have for a market for their buyer. Just to give
you a sense of how far behind we are, you know, most of it is self-financed. There's
some overlap there. I know that adds up to more than a hundred
percent because they used multiple sources. And you know not even a third had a
buyer locked in and you saw what's happening with those prices and I'm guessing if some of you are
hemp producers, you could easily fall into that gray or orange area.
The one thing we found are these six barriers in the state here and this is the
part that was really interesting to me. There's a lack of grower Networks. We've got a
couple hemp associations that have appeared and it's back to that lack
of buyers. You see like what the Canadian Hemp Trade Association has. You
start with the Colorado was doing in that champ program. Like I said, they're
way ahead of us in things like that, but we have an extension page there to help
connect top people with buyers because that's a major issue. There's so many
people who have put it in the ground without a buyer in mind and
like Tyler said, I feel bad for you if you don't have a buyer and
it's August you know and you don't have
someone to buy your crop yet. Seed availability has always been an issue.We
heard a lot about that. It's the number one cause. This is a very labor intensive crop, yet
seed is the number one cost. There's multiple stories of fraud. You've heard that
as well from others. Weather, that was a big issue this year.
Welcome to agriculture. That's the way it is in all of agriculture. You heard my
other talk on just crop production this year in the state. Crop returns will help,
but, you know, that's a help. Labor availability is a major issue. It's
highly labor intensive crop, yet we're very low on employment rates.
The group I look at here, they've been really good in this, is the vegetable
production, the organic vegetable producers, these farmer markets. Those
people have to put crews together when they have a lot of vegetable production and I think
they're the group that knows how to get people out there and get crews to
work on raising this crop. I had a student in my class, her family was raising
hemp and she said that every weekend, I have my cousins out working on the hemp field, you know
the patch because there's was just a lot of work to do. Same with the equipment.
There's a lot of, people are coming up with new ways to do the equipment just to reduce
the need for labor or make it less stressful, physically, on those workers.
The last one is obtaining formal financing. That was always a difficult one and
the part that scared me, that first picture there, about how many people are
self- financing. To me, that's convincing family and friends or yourself that this is a
good idea, putting your own money in and there's not a lot of formal analysis on
that sometimes. I think that will start to relax some, but expect more
formality. You need a business plan with realistic prices and probably some insurance
requirements to help out a plan what to do if your crop is too hot, things like
that. I think the CBD has been the big push and, you know, 80% of the
acres production is CBD. That market has quickly saturated here. It's globally
competitive. Be realistic on the prices to expect, you saw Tyler's prices you,
know. I think these are just, we lost half the price just from August to December
at this place and these are $1.73. Tyler had a dollar up there for
those major hemp states. That's $7 per pound, you
know. It's not the 28 dollars like is in the report. Those prices are gone.
It's going to be a while. You heard Ted's description of Canada, how they were
living on these, Okay it took us a few years to work that surplus through
whenever they had a big growth in their production. And yet, the seed cost is
coming down. Even though the price of the output is going down by 50%, it's only 20-
25 percent of the seed, so there went their margin, Here's some of
the strengths we have as a state, though I think hemp will happen here at a certain level.
We have a very diverse agriculture here. Wisconsin farmers have experienced
planting a lot of different crops. Here are some, but with lots of them, there's a
support system. There's lot of different associations. Some of them have, you
know, look at the beginning there at the funding are the people who have
helped support this conference.We have that infrastructure here.We have
both commercial scale and small scale farming here and we have a history with hemp. Here are
some of our major-- these are our major-minor crop industries. Potato: We're third
largest potato producer in the US. Three hundred million acres, or dollars worth
of production in 2018 in the state. Our processing vegetable industry: We're second in
the nation: 176 million dollars. Cranberry, we're the number one, we produce about
half of the world's cranberries here at about 13,000 acres, 143 million.
Organic milk: We're the second largest producer for organic milk, 125 million.
That's back in 2016. Organic Vegatables: All those farmers markets and stuff.
We're in in that, you know, but still that's 24 million back in 2016. So
we're in these markets. Ginseng, a little harder to tie down on how much
we're producing there. That's a storable crop and they don't like to
tell us what they're doing exactly. USDA does not have good data. Somewhere in that range of 50
to 90 million is a pretty good guess. Pick at $7 a pound, assume a pretty
solid average of 1500 pounds per acre and 10,000 acre, it's 105 million.
That puts hemp on that list of crops real quickly there and again, it comes
down to acres, but you can see we can quickly put hemp in that list of our
specialty crops and we have the experience doing that. We've already talked
about this, food processing is one of our major strengths as a state.
Second in cheese production, we use 90% of our milk to make cheese. You heard
that from Marv Stevenson. Second largest
processing vegetable industry; we're good at these things. If you look at the Steve Deller
and Matt, some of those people in his shop over there in that
Center for Economic Development that Steve Deller runs, they call these things
called location quotients. It's a measure of how good a certain industry is
in certain things. We are good at processing food. That's one of the
better than these other major states: Colorado, Oregon, those states- Montana -they all have
major hemp production and acres. We don't have that but we definitely have a
strong food processing industry in the state, both dairy and other
kinds of foods and that means the machinery and equipment manufacturing, our
location quotients, are very high in those areas. That means when you need a
new machine to do an extraction or compression or to do something with
the processing, make a new bearing, the person who you're talking to or you can go
visit is just down the road, sometimes or just an hour way. You don't have to get
an airplane, deal with shipping and all this kind of stuff. They're literally just
right by. The other thing we're really good at is packaging. The paper and plastic
used to put food things in. We're really good at.
That whole industry, other states would love to have as they're trying get into the
hemp world. So thinking about the future of hemp in Wisconsin. Hemp is going to
be a part of our state. I can see that, but we've got a lot of work to do yet. This
is not gonna happen so a lot of people putting in a lot of work. Hemp farming, I'm
not worried about that in the sense that I know we grow these other crops. I know
we can do hemp farming. We've used to do it, we can still do it. The agronomic and
equipment problems are gonna be solved. We can do commercial scale, some of that
stuff you saw. Ted talking about that agricultural model of hemp production they
have up there and then we've kind of got the horticultural level production,
more niche marketing. We do that already with vegetables.We have both of
those active in the state at nationally prominent levels.We may need to solve
the THC problem. You heard Ted's point. You've heard Dawn. Short term we're going to push for
higher concentrations accepted, longer harvest windows for that testing USDA
idea they're putting out as a proposal, but longer-term, we've gotta solve this
with breeding: Non-THC varieties, certified-hemp seed like they have in Canada---
something, we just can't have, last year talking to Shelby, somewhere around
fourteen eighteen percent of our hemp crop was destroyed because it got ho.
Other states it's much higher, Tyler talked about 30 plus percent last night.
There's a newspaper article I saw that forty percent in Arizona. I mean, you
can't farm very well when forty percent of your crop is thrown away each year. That
really cuts into profitability. Processing and marketing is where the economic
impact is gonna be. Farming you know I love farmers. I grew up with them. Twenty
two billion dollars is the impact of the farm
productions, but where the real impact comes from is the what do you do after
you harvest it. The 105 million is where we blow up. That's all of Agriculture
in the state. That's where we need that creative class, that economic development
we talked about after the first panel this morning. We need these
entrepreneurs to develop and market new hemp products. Food and beverages,
supplements and additives, fiber, livestock uses-- very much along the lines we
heard Ted talking about Canada. We have a major comparative advantage in food and
beverages relative to a lot of these other states. I think for a long time, you've seen
the numbers on CBD. That'll be around, but I think there's gonna be a major
focus on food products using hemp seed for a while. Canada is a major producer and
again, they have some solid advantages there. In the US, we've approved essentially
the same foods. Hulled hemp seed, hemp seed protein powder and
hemp seed oil for food use. So they're all generally recognized as safe.
We can sell that now; you can't use CBD in food. You can't
feed hemp to livestock yet, just like in Canada. What I think you're gonna see is
small companies developing successful products their local and regional markets
and then maybe some of them being sold, being bought out by big companies then
replicate, send it around the world type of thing, but I think, you hold up Dawn this morning
talked about the Just in peanut-butter, that'd be the equivalent in
the hemp world. Somebody in Wisconsin will come up with something that'll catch on
and then they'll get big and then somebody will come in and buy it.
Maybe not, maybe they'll be able to grow big then stay local like Organic Valley has done,
but I think that's what we're going to need and I think that
food and beverage side of things. Something on the food is where, as a
state, that's the major advantage we have. We've done this with dairy and cheese.
We're really good at, we have a lot of small, community meat locker, you know,
they make their own different products there. We do it with vegetables, we
do it with fermented products.We're good at those things. Supplements and
additives, it's very clear to me that the CBD you know it's been the major
push, but that's where the money is slash was for farmers. I think that market has
quickly saturated. You saw my quote there before, never underestimate the
potential of ag to oversupply any market. We seem to be able to do it no
matter what. There's some issues we'll solve. Product consistency and
standards and we need medical research on CBD and THC just like everyone else.
You heard Ted talking about some of the options there. There's so many different
compounds there, but when's that CBD market be saturated? Has it already
been done so? Are there other extracts?But a lot of this stuff, I think that CDB level of
demand is not huge. We can grow a lot of CBD, produce a lot of CBD, but
that's not where the long term is. Until somebody comes up with a new product or
something different. It's going to be a while. I think in the short term, food is a better
bet for the state of Wisconsin and there's a lot of players in that CBD
world. Fiber and livestock use is the last one. Fibers currently not a comparative
advantage for Wisconsin. I looked, spent some time at fabric mills ten plus hours
away. They're somewhere else.We don't have any fabrics production around here.
You heard Ted talking about they need to attract some serious capital investment
before you put in something to do thing with that fiber and I don't know if anyone
is willing to drop three hundred- five hundred million with numbers we're
talking about for Canada.Who's ready to do that? That's a serious investment.
Paper: Wisconsin already has a lot of paper.
I mean, are you gonna convince the people making paper up in the Wausau area or
Appleton, Fox River Valley to start growing hemp? You have to show
advantages over our traditional paper industry, which is already under some stress,
actually. Some of these insulation products are very interesting in that. I was listening to Ted last
night talk about some of these industrial uses. I think there is potential
there. Their climate is very much like ours and so, but I think there's still
work to do in that one, but I think it's gonna take us a while yet. There's a lot of
entrepreneur work that has to happen. Maybe go to
Canada and steal some of their ideas. I don't know. The last one is this live stock uses.
They're still waiting for FDA approval. I'm assuming it'll come. It's generally
recognized as safe for people, so why can't I feed it to my cow and then drink the
milk? I don't know. Right now it's not possible and I'd really like to know can hemp seeds
compete with particularly soybeans as a feed? And the other one that really
surprised me, I was looking last night a little bit. University of Kentucky study
-maybe Tyler knows about the video, I couldn't find a documents- but it shows making
hemp plants into silage with the seed already in there so it's like an oil rich seed as your silage.
It said it's similar to alfalfa. Maybe the question is:
Is it competitive with alfalfa? It's an annual crop as opposed to a perennial
crop. Maybe it'll have some advantages in the rotations.
I don't know if we get livestock approval and then we've got to put some time in to see how it works.
Does the milk or meat tastes different from these hemp fed animals?
That would be a very interesting question. Maybe this is where our value
added product is. Milk from cows fed hemp or something
like that. It's got a different taste profile or a different health profile.
Maybe there's some opportunities there I don't know. The last one is maybe hemp as a bedding.
I think that's going to be a secondary
market, but. So I really, the emphasis I got on this, when I really put these speakers
together was I wanted people to understand how far behind you really are.
These states are way ahead of us. You heard Colorado is just about finishing
up their big champ initiative. You saw Tyler's numbers. Canada, you know, they've been doing
it since the 90s. Nirvana was the running around making music and they were
just getting started. That's how long ago it was. It's just, we're way behind. We
have comparative advantages. I know we can catch up if we wanted to. We can add
it to our list of specialty crops and our food and beverage I think is a really
strong sector that if we have the right creative folks, I think we can do
something in that space.We're gonna need lots of research. UW is heavily involved
in that. Shelby is going to be leading the point person on that I think in the
college here, but there's other kinds of research and so that's kind of everything.