In 2020, cannabinoid production undoubtedly continued to steal the hemp show. According to a recent survey by market analytics firm Hemp Benchmarks, nearly 90% of growers opted to cultivate hemp either for cannabidiol (CBD) or cannabigerol (CBG).
But excitement has been simmering for another segment of the hemp market: hemp fiber.
With the potential to produce both bast and hurd that can be the basis for thousands of products, hemp fiber holds tremendous promise for the industry, and it’s where many industry leaders believe the future of hemp lies in the long-term.
The hemp fiber industry is still very much in its infancy, perhaps more so than any other faction of hemp. A May report from pricing and research firm The Jacobsen found hemp fiber varieties made up just 2.5% of total planted acreage in 2020. A more recent November report from PanXchange, a leading benchmark price provider in the U.S. hemp industry, pegged that number a bit higher at around 8%. Regardless, the agencies estimate it was the least popular segment of hemp among farmers.
The lack of popularity is likely due to immature pricing—hemp fiber farmers reported fetching an average of $0.12 per pound of “true hemp” biomass (hemp stalks), according to PanXchange.
But as The Jacobsen states in its report, “once companies with market-ready products seek out contracts for raw hemp fiber, acreage could increase dramatically in a very short period of time.”
Wins for Fiber
This year saw myriad breakthroughs in the fiber industry as more U.S. researchers began studying fiber varieties and the technology to process them. For example, at the University of Kentucky, Interim Director of Hemp Programs, Bob Pearce, recently expanded the university’s fiber field trials into a wider geographic area to include more than a dozen varieties. And Mark Sunderland, the chief innovation officer of Hemp Black—a hemp technology company and subsidiary of Ecofibre—and vice president of innovation and technology for Thomas Jefferson University, recently developed a way to process hemp hurd into particles. These particles act as “a building block for new fibers and new yarns going forward so that these materials can be brought into the existing commercial supply chain,” Sunderland told Hemp Grower in February.
Organizations such as the National Industrial Hemp Council (NIHC) have also embarked on a couple of initiatives this year to bring all hemp, particularly for its industrial uses, into the limelight. NIHC recently struck a cost-sharing agreement with the USDA to study foreign markets, develop an international market presence, and lend individual companies financial support. The organization is also working with the Hemp Industries Association to establish a national hemp checkoff program to promote the industry further.
“As we move forward with those two promotional programs, I think it will overall strengthen the brand of hemp, which will give farmers more opportunity to grow and sell,” says Larry Farnsworth, NIHC’s senior vice president of communications and marketing. “We see 2021 as a good year where we’re going to start expanding the market access for farmers and processors not just for fiber, but also for CBD, etc.”
The industry also experienced a growing number of investments in building out the supply chain. Numerous decorticators have cropped up (or been announced) over the year across the country, including an upcoming facility from Panda Biotech, a processor aiming to create textile-grade cottonized hemp fiber. Panda Biotech also donated 60 tons of hemp fiber seeds to Texas farmers this year. Over in Indiana, a group of farmers has launched a growing co-op, the Heartland Hemp Cooperative, and they intend to build their own decorticating facility to process the hemp themselves.
Hemp for fiber has even taken a seat in the mainstream as mammoth brands have announced initiatives to make hemp-based products, including Georgia-Pacific, Nike, and Patagonia. These are in addition to the numerous products being developed by smaller companies at a lightning pace, from hemp-based wood flooring to hemp headphones.
Still, the industry has a litany of issues to overcome before it can become a mature market, namely the undeveloped infrastructure in the U.S. and the disjointed supply chain.
Tom Dermody, a senior market analyst at PanXchange, says processors are currently looking for hemp varieties with high bast content (more than 10%). “Graded fiber is the highest-value product of the derivatives. This is well-documented internationally, but we’re just starting to see how bast fiber drives valuation of true hemp (hemp stalks) in domestic markets,” Dermody says.
The problem? PanXchange has found that while hemp-fiber demand is higher in the South, producers in the Midwest and Central Plains have access to varieties that perform better in their climates.
“The further south you go, the more challenging it is to successfully cultivate varieties that have that high bast fiber content,” Dermody says. “The most readily commercial varieties originate in Europe, Canada, and Asia, and those are predominantly on par [longitudinally] with Colorado. Once you get below that line, we see diminishing returns from those same varieties.”
And while the Midwest and Central Plains may be able to produce the supply to meet the demand of the South, transporting hemp for fiber thousands of miles for processing isn’t financially feasible. Dermody points out, however, that once the first round of hemp fiber processing—decortication—is complete, transporting that secondary, often lighter, material for further processing becomes much more doable.
Another issue in the industry is the lack of standards among not just hemp fiber varieties but across all types. But Farnsworth says that is something NIHC is working on and hopes to debut in 2021.
Achieving a Mature Market
Many predict a mature market for hemp fiber is still several years off, but 2021 is likely to see a boost in interest. PanXchange estimates the range of hemp acreage planted for fiber in 2021 could be more than three times the 17,000 acres planted in 2020.
Dermody says he can imagine a situation where farmers become overzealous about hemp fiber’s potential, resulting in overproduction and causing a similar problem CBD is facing now—a gross oversupply met by a crash in pricing.
However, “as opposed to CBD, if you’re not engaged with a fiber processor who’s within 100 miles of your location, it will be exceedingly difficult to find a willing buyer, which may restrict producers from crowding the market in 2021,” Dermody points out.
Jonathan Miller, general counsel for the U.S. Hemp Roundtable, also points out that the incoming change in federal leadership may be a benefit to all facets of the hemp industry, including fiber.
"We’re hopeful that the Biden [Administration's] USDA will be more focused on identifying funding for hemp fiber infrastructure and supporting that element of the industry," Miller says.
Ultimately, whether it happens next year or five years down the line, many industry experts predict fiber will eventually be the predominant use for hemp.
“Fiber is really going to be the future of the industry. If you look back, history tells us that,” Farnsworth says.