{"id":107644,"date":"2025-09-01T20:32:17","date_gmt":"2025-09-01T20:32:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/107644\/"},"modified":"2025-09-01T20:32:17","modified_gmt":"2025-09-01T20:32:17","slug":"federal-government-is-significantly-undervaluing-hemp-market-based-on-flawed-methodology-analysis-says","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/107644\/","title":{"rendered":"Federal Government Is Significantly ‘Undervaluing’ Hemp Market Based On ‘Flawed’ Methodology, Analysis Says"},"content":{"rendered":"

The U.S. Department of Agriculture (USDA) is \u201cundervaluing\u201d the hemp industry, relying on market research in a way that could be \u201cinadvertently hurting the very same farmers they are trying to regulate,\u201d according to a new analysis.<\/p>\n

The research firm Whitney Economics released the report on Thursday, saying it identifies an improper methodology for data collection on the value of the cannabis crop that\u2019s \u201ccontributing to the misperception\u00a0that\u00a0farmers are not benefiting from the rise in the hemp-derived cannabinoid industry.\u201d<\/p>\n

USDA started annually surveying hemp farmers across the country shortly after the crop was federally legalized under the 2018 Farm Bill. And while the value of hemp increased from 2023 to 2024, industry stakeholders have routinely pointed to the lower-than-expected average value of products such as grain, fiber and consumable cannabinoids as a reflection of insufficient regulatory policies.<\/p>\n

\u201cThe lower value of the crop is making it tougher for farmers to raise money, inhibiting infrastructural development and suppressing market growth,\u201d Beau Whitney, chief economist of Whitney Economics, said. \u201cThese USDA errors are also disincentivizing farmers from adding hemp into their crop rotations.\u201d<\/p>\n

\u201cIn reality, farmers in the hemp industry are benefiting by their contribution more than corn or soy farmers,\u201d he said.<\/p>\n

While USDA collects data from hemp farmers in much the same way as other commercial crops\u2014soliciting information about total yields and the purpose of the production, for example\u2014Whitney said the department is not accurately accounting for the unique value of floral hemp in the marketplace. Instead, it assesses value based on \u201ca blended average of the sales of biomass and the flower.\u201d<\/p>\n

By doing so, \u201cthe combined average price per pound seriously undervalues the crop,\u201d he said.<\/p>\n

\u201cThe methodology to calculate the value of the floral output is considerably flawed as there are multiple uses of the cultivated output that vary significantly in value.\u201d<\/p>\n

For example, the market value of floral hemp last year was an average $330 per pound, while the biomass value of the crop was $2 per pound. Yet, using USDA\u2019s methodology, the total value of floral hemp produced in 2024 (20.8 million pounds) was $386 million. Whitney said that, in reality, it would only take 1.2 million pounds of floral hemp to reach that value.<\/p>\n

\u201cBy undervaluing the floral crop, investors do not have an accurate picture of the market potential,\u201d the analysis says. And that means \u201cfarmers are less willing to plant the crop or include it in their rotation, and policymakers are using erroneous data to make decisions.\u201d<\/p>\n

It noted a recent congressional hearing where one senator who is pushing for restriction on the hemp industry said farmers are making less than one percent of revenue that comes from the sale of their crop. But if USDA put the value of floral hemp at $330 per pound, last year\u2019s 20.8 million pounds of production would have translated into about $6.9 billion at the wholesale level, \u201cwhich represents 24.2 percent of the total retail value.\u201d<\/p>\n

\u201cThis would indicate that farmers are getting significantly more from hemp (24.2 percent) than corn (15 percent) or soy (7.9 percent),\u201d the report<\/a> says.<\/p>\n

\u201cHighlighting how much farmers are benefiting from hemp cultivation would also influence policies at the federal level,\u201d Whitney said. \u201cThis error by the USDA is having a profound effect on the entire hemp industry and must be immediately addressed, or the hemp industry will be negatively impacted, and the growth of the market will continue to be suppressed.\u201d<\/p>\n

Meanwhile, amid a contentious debate over federal laws on intoxicating hemp products, congressional researchers recently published a report outlining current policies and options for lawmakers to resolve outstanding issues<\/a> related to a proposed THC ban.<\/p>\n

CRS separately released a report in June stating that\u00a0the legislation would \u201ceffectively\u201d prohibit hemp-derived cannabinoid products<\/a>. Initially it said that such a ban would prevent the sale of CBD as well, but the CRS report was updated to exclude that language.<\/p>\n

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Meanwhile, Sen. Rand Paul (R-KY) recently said he has plans to meet with House lawmakers to\u00a0\u201creach a compromise\u201d on an approach to regulate hemp<\/a>\u00a0in light of his opposition to a proposal in Congress to ban products with any \u201cquantifiable\u201d amount of THC.<\/p>\n

While Sen. Mitch McConnell (R-KY) has contested the idea that the legislation he sponsored would \u201ccompletely destroy\u201d the market,\u00a0as Paul and industry stakeholders have insisted<\/a>, he ultimately agreed to pull the language from the agriculture bill following Paul\u2019s procedural protest. The\u00a0Senate passed the underlying legislation earlier this month<\/a>.<\/p>\n

Separately, Paul recently filed a standalone bill that would go in the opposite direction of the hemp ban,\u00a0proposing to triple the concentration of THC that the crop could legally contain<\/a>, while addressing multiple other concerns the industry has expressed about federal regulations.<\/p>\n

The senator introduced the legislation, titled the Hemp Economic Mobilization Plan (HEMP) Act, in June. It\u00a0mirrors versions he\u2019s sponsored over the last several sessions<\/a>.<\/p>\n

Hemp industry stakeholders rallied against that proposal, an earlier version of which was also included in the base bill from the subcommittee last year. It\u2019s\u00a0virtually identical to a provision of the 2024 Farm Bill that was attached by a separate committee<\/a>\u00a0last May via an amendment from Rep. Mary Miller (R-IL), which was also not enacted into law.<\/p>\n

A leading alcohol industry association, meanwhile, has called on Congress to dial back language in the House spending bill that would ban most consumable hemp products, instead\u00a0proposing to maintain the legalization of naturally derived cannabinoids<\/a>\u00a0from the crop and only prohibit synthetic items.<\/p>\n

Wine & Spirits Wholesalers of America (WSWA) President and CEO Francis Creighton said in a press release that \u201cproponents and opponents alike have agreed that this language amounts to a ban.\u201d<\/p>\n

Separately, key GOP congressional lawmakers\u2014including one member who supports marijuana legalization\u2014don\u2019t seem especially concerned about provisions in the bill<\/a>\u00a0despite concern from stakeholders that it would\u00a0put much of the hemp industry in jeopardy by banning most consumable products<\/a>\u00a0derived from the plant.<\/p>\n

Jonathan Miller, general counsel at the U.S. Hemp Roundtable,\u00a0told congressional lawmakers in April that the market is \u201cbegging\u201d for federal regulations<\/a>\u00a0around cannabis products.<\/p>\n

At the hearing, Rep. James Comer (R-KY) also inquired about FDA inaction around regulations, sarcastically asking if it\u2019d require \u201ca gazillion bureaucrats that work from home\u201d to regulate cannabinoids such as CBD.<\/p>\n

A report from Bloomberg Intelligence (BI) last year\u00a0called cannabis a \u201csignificant threat\u201d to the alcohol industry<\/a>, citing survey data that suggests more people are using cannabis as a substitute for alcoholic beverages such a beer and wine.<\/p>\n

Last November, meanwhile, a beer industry trade group\u00a0put out a statement of guiding principles to address what it called \u201cthe proliferation of largely unregulated intoxicating hemp and cannabis products,\u201d<\/a>\u00a0warning of risks to consumers and communities resulting from THC consumption.<\/p>\n

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.<\/p>\n

\"Become<\/a>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"The U.S. Department of Agriculture (USDA) is \u201cundervaluing\u201d the hemp industry, relying on market research in a way…\n","protected":false},"author":2,"featured_media":107645,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[84,87,467,56,54,55],"class_list":["post-107644","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-business","tag-featured","tag-markets","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/107644","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=107644"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/107644\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/107645"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=107644"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=107644"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=107644"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}