Hemp glut in Manitoba

By: Bill Redekop
Source: winnipegfreepress.com

HEMP, the new Cinderella crop, is in for a major hiccup after Manitoba Harvest announced it will not contract the crop in 2016.

Winnipeg-based Manitoba Harvest, with its recent acquisition of Hemp Oil Canada in Ste. Agathe, buys about 75 per cent of the hemp crop in Western Canada. Its announcement will put the brakes on production in the new year.

"It's so much of a Cinderella crop that we were finding incredible yields on the Prairies," said Kelly Saunderson, Manitoba Harvest spokeswoman.

The yield was so great in 2015 that Manitoba Harvest doesn't require any new crop in the new year. That's even though its sales are increasing by 30 to 40 per cent annually, Saunderson said.

Manitoba Harvest contracts on a per-acre basis. When average yields started coming in at 1,000 pounds per acre last year, instead of the 200 to 500 pounds per acre projected, Manitoba Harvest realized it couldn't keep pace. The glut of hemp is mostly stored on farms.

Hemp is projected to be the next Cinderella crop, a label used for canola until it one day rivalled wheat as the dominant crop on the Prairies. Hemp production was banned in Canada in 1938 because it looks exactly like marijuana. Narcotic-free hemp production was legalized again in 1998. Hemp has extraordinary potential as a health food (high in protein, and omega 3 and 6) and for its fibre, but it's still banging at the door of food markets and clothing manufacturers.

There are fears a freeze in hemp production will be a setback and allow Americans to catch up to Canada. Regulations are starting to loosen up in the United States regarding hemp production.

Saunderson doesn't see it that way. For one, growers have a very big lead over any newcomers. That's why production has skyrocketed so quickly. As well, Manitoba Harvest has invested $8 million in recent years upgrading its processing facilities, including more automation.

If U.S. farmers do start producing hemp, it will only grow the market, said Dauphin-area hemp grower Bruce Rampton.

"The tide raises all boats," maintained Rampton, who grew 100 acres of hemp last year and has grown up to 600 acres.

"If Americans can legalize it and get production going there and get the marketplace going, we are ahead on production and know-how, like combining, drying and handling the crop, fertilizing and seeding rates. That's all figured out," Rampton said.

Manitoba Harvest's announcement wasn't a big surprise to many farmers, he said. "I've never grown a crop that makes me as much money as hemp, but I've never had anything as unpredictable as hemp," he said. "I've always told everyone when growing hemp, hemp is profitable but don't confuse profitability with cash flow."

Don Dewar, another Dauphin-area farmer, said he will still grow hemp in 2016. He contracts his crop with the Parkland Industrial Hemp Growers Co-op, which has not announced any cuts in contracting. The co-op, started in 2002, processes hemp for bulk sales of grain and fibre.