THE HEMP COMMERCE & FARMING REPORT

THE HEMP COMMERCE & FARMING REPORT, Part Two

Volume 1, Issue 1, May 6th 1999
(c) 1999 AHEM, ARTHUR HANKS.

HOW CAN YOU CALL YOURSELF AN ORGANIC FARMER WHEN YOUR ORGANIC MATTER IS SO LOW? By Jon Cloud, Cloud Mountain Organics You cannot be successful at organic farming if you do not understand the soil fertility cycle. The next series of articles will provide you with a basic understanding of the soil's fertility and where that fertility comes from. The greatest portion of the fertility comes to you free of charge because it comes from the air. Carbon dioxide is absorbed by plants. The plants keep the carbon (the woody part of the plant) and return the oxygen to the atmosphere. The carbon is the very foundation of the fertility cycle. The amount of carbon you have in your soil is reflected in your soil test results as the organic matter percentage. All the organic farmers working with Cloud Mountain know that we are very committed to having farmers perform soil tests. The certification organizations feel that it is important enough to include as a mandatory part of their regulations (albeit a poorly enforced part.) The reason for this is that the soil test tells you how fertile your soil is. One of the most important numbers on your soil test is Organic Matter (abbreviated OM). The organic matter is directly related to the amount of nitrogen that you have available in your soil. The Organic Matter (OM) should be 6.5-7%. These numbers are a far cry from the percentage we usually see coming from organic farms. The majority of organic farms show Organic Matter at 2-3%. How can people call themselves organic farmers when their Organic Matter is so low? The OM is the part of your soil that is actively providing nutrients to your crop. Nearly all the nutrients that your crop needs must come from the OM. If you have 6% OM (approximately 10,000 lb. per acre) then approximately 1/3 (3,000 lb.) of this organic matter is active organic matter. This means that you are working with 1/3 of 6% or 2% of the total soil. But the news gets even worse because 50% of this active organic matter is in the form of fungi. The fungi's job is to break down the woody part (carbon) of the OM. The fungi is fed upon by the other beasties in the soil and it is their bodies that provides the nutrients to the plants. So we are working with only the 1% (1,500 per acre) of the soil during any growing season. This 1% is being accumulated and released by the microbes in the form of MM (microbe manure) and their dead bodies. Thus the 1,500 lb. will not be released immediately but rather becomes available throughout the growing season. So, if your soil test shows that you have only 2.5% OM (2,500 lb. per acre) then you are working with only 833 lb. per acre of nutrients (with 1% at 416 lbs). This means that you can double the productivity of your soil by doubling the OM. Imagine the crops you can get with 3,000 lb. vs. 833 lb. per acre. The best way to increase your yields is to increase your Organic Matter. Cloud Mountain feels that nitrogen hungry crops should only be grown if your soil test is greater than 4.5 % OM. The Organic Matter test is our primary indicator for figuring out how much nitrogen will be released this growing season. The OM is digested by the microbes. Their digestion produces ammonia which is further converted to nitrated that are absorbed by plants. The nitrates are highly unstable and will either be absorbed by plants (main crop or cover crops) or be lost to the atmosphere and water run-off. The idea is to build your fertility through increasing organic matter and then to hold that fertility in place through very specific crop rotations. Sandy soils require more attention and a tighter crop rotation. There is no single recipe for establishing crop rotations and building soil fertility. As the rotations for each soil type and growing are very different, the soil types must be treated differently. So call us (416-762-0940) for specific information on soil building. This article is the first of a four-part series

INTERVIEW WITH RICHARD ROSE Richard Rose is the founder and President of the Rella Good Cheese Company (formerly known as Sharon's Finest), a food product development and marketing firm located in Santa Rosa California. He is also founder, president, and "Chief Hemp Nut" of HempNut Inc., a food company specializing in researching, developing and marketing hemp seed foods. He is one of the North American leaders in hemp foods and is also the President of the Hemp Foods Association. The HCFR recently approached Rose to share his thoughts and insights on the future of the hemp foods sector. This interview was conducted by email in late May, 1999. Q1. What food opportunities does hemp have in the North American marketplace and what are the best opportunities? A1. Nutraceuticals, replacement for soya, flavourants, really just about any food now made with soya or sesame. Q2. Who is the hemp foods consumer? A2. The Early Adoptors, socially-conscious, hemp-friendly. Q3. The organic foods marketplace is growing rapidly. What are the opportunities in that sector for hemp foods? A3. First the material actually needs to be certified organic, not just called organic by people evidentially not realizing that there are actual standards relating to the use of such terms. Only then will the market expand in tandem with market growth overall. The best market for organic hemp will be in Europe. Canada missed the boat on this one, with insufficient organic hemp acreage under production last year. Q4. What do you think is the best vendor for hemp foods at this point? Through supermarkets, specialty food stores, or through new avenues like mail-order/Internet? A4. Natural foods is where the volume will be, at first. Mail order and other channels will be lesser volume, but still good for niche marketers. Eventually, if enough people demand it, hemp seed foods will end up in supermarkets. But not until the drug test question is settled. Q5. Many food merchants are using sterilized and cheaper Chinese seed for hemp foods. Besides by lowering prices to unprofitable levels, how can Canadians and Canadian hemp competitively step into this market? A5. The Chinese seed is not necessarily all sterilized or of inferior quality. This year a certain Canadian company ignited a trade war, selling to established customers of another, more-established company, by merely offering low-quality materials at slightly above the cost of production, thereby immediately taking 60% out of the value they could have received. It will go down in history as one of the biggest marketing blunders in hemp history. The market retail price for hemp seed went from US $20/pound to $5 overnight. That's US $15/pound, times 1,000,000 pounds which will likely be the volume the first year, or US $15,000,000, which could have been in the pockets of Canadian farmers, processors, associations, ad agencies, investors, PR firms, researchers, and others. But instead it will be in the consumers' pockets, at a few dollars here and there. And the only farmers which benefited were the Europeans and Chinese since they got the business. This unwise decision to force the 'commodification' of hemp seed cost Canadian farmers, processors and allied businesses much, in dollars but more importantly, in market share. Instead of competing on quality and innovation, they chose to compete where they could never win: on price. For some bizarre reason they thought that by commodifying hemp seed everyone would immediately buy, instead of realizing the obvious: a tremendous amount of education must happen first, and only then will the market respond. Once volume is up then farmers/processors will feel the downward pressure on prices and respond by cutting prices as little as possible, and the price will fall in an orderly manner over time. It's a classic product life cycle model. (And such is the case in Europe where shelled hemp seed is about 50% more expensive, even though it has been on the market longer than in North America.) But such market education only occurs when the price is high enough to pay for those education efforts. So now here you have the situation whereby volume is low, and prices aren't high enough to sustain an education effort to increase volume, but before education can happen there must be enough money on the table to fund it which isn't the case, and all because of the marketing blunders of one non-grassroots company, who jumped on the hemp bandwagon. It's the worst possible scenario, and it's happening right now. Additionally, the government has made matters worse by permitting only certain cultivars to be grown. Those are mostly not the best cultivars for hemp seed foods, other better cultivars are not permitted, and innovation in developing new and better cultivars for food use are stifled by the regulations. They got hung up on the fear of drug production and let it get the best of them. And Canadian farmers are the poorer for it. There are few agencies helping to coordinate the Canadian production, so you have people growing seed using fibre cultivars, and not really understanding just how complex the market for these materials are and what the market really wants. It does make for opportunities for certain companies, but so far not the farmer. The best thing that could happen is establishment of standards of identity for the grain products, and organization of a Canadian Hemp Growers Co-operative. This would make everyone work for the benefit of the whole, expanding the market, developing new markets and processing innovations, instead of just trying to take each others' customers away like it is now. Q6. What kind of quality standards are you trying to create with the Hemp Food Association? How is the HFA dealing with complaints and reports of spoiled product? A6. Our standards are attached (see HEMP SHORTS). The hemp seed food industry started at a very grassroots level, with people never before in business making foods for the first time. And the impact of that showed: worms in products, contamination, more potential customers repulsed by whole seeds than gained, the image of unprofessionalism which has slowed entry into professional food channels, people losing their jobs or going to jail for failing a drug test, and more. With such a poor beginning, some organization needed to take charge of the industry and try to exert a stabilizing and professional influence. Since I had by far the most experience I decided to take on the task, at great personal and financial risk, because it was quite simply the right thing to do. We now have perhaps the most informative hemp web site www.hempfood.com, especially regarding food, with over 130 documents on it, and more being added. We are funding research into just how much THC in a food will trigger a positive drug test, and ways of preventing it. The HFA Board of Advisors is Dr. Jace Callaway, and Dave Pate and Rob Clarke from the IHA. We get few complaints regarding spoiled product, probably because we are not a conflict resolution body, but informational. However, bad product is a major problem in the industry, and Canada has some of the worst quality I have ever seen for shelled product. It's what one would expect early in the processing learning curve like Canada is in, but what is troubling is there seems to be little zeal for fixing it. Hopefully, more-professional companies will emerge making quality assurance part of their core competencies. And Quality Grading Standards will help. Q7. What are some of the challenges in importing hemp seed and hemp seed foods from Canada? How much is THC levels in foods an issue in the practice of selling to the consumer? A7. Quality is the biggest problem, and lack of communication between buyers and sellers (market inefficiency). THC is an issue because we have always viewed it as a contaminant of sorts, unlike other food producers who see it as a monkey wrench they can throw into the piss-test machine. It's simply amazing how much some people are willing to let their customers pay the price for their own activism, but they are unwilling to do so themselves. Q8. Do you have any other comments? A8. The biggest internal threat to the industry is the widespread theft of intellectual property. Such property is what will propel hemp from the dark ages to a modern renaissance. Something as seemingly small as appropriating one company's trademark for your own use bogs the industry down with internal squabbles and litigation. It seems to stem from the grassroots, anti-corporate nature of hempsters. But far from being anti-corporate, it is actually anti-progress. The industry's inability to respect intellectual property such as trademarks, patents, trade secrets, copyrighted materials, and the like will slow capital formation and innovation, and make further development that much harder. For example, one reason China is still a Third World country is that since patents are ignored there, they don't get patented technologies which could make them a world leader in certain industries. Everyone can actually help in this regard, if they would only decide to stop stealing intellectual property from others, and also stop supporting those that do steal. This industry is really in desperate need of a therapeutic dose of ethics and integrity. Otherwise, investors will stay away, and innovators will keep their work from others in the industry resulting in slower development overall. That has already happened. Instead of stealing from others, have an original idea, or find a way to get around their inventions. Maybe you'll even come up with a better one, which otherwise wouldn't have happened if you just stole it. If hempsters would support those successful firms with the best shot at achieving more success, the industry in general would be lifted up. Instead, one sees business neophytes swiping others' ideas and customers, and retarding the effectiveness of those firms with a legitimate shot at making hemp a mainstream product. It really is a sorry situation, and adds fuel to US prohibitionists' claims that hemp should not be permitted because there isn't a market for it.

MAKING LIGHT WORK IN ANALYSIS OF OILSEEDS, FIBRE, AND FERMENTED BEVERAGES by Diane Malley and Phil Williams Canada is famous for its wheat. One of the most important things about Canadian wheat is its excellent bread-baking quality, which in turn depends upon its protein content. Almost all of Canada's wheat is tested for protein by a rapid technique called near-infrared spectroscopy (NIRS). Beginning research on this technology in 1972, Dr. Phil Williams, Senior Scientist in the Grain Research Laboratory of the Canadian Grain Commission, eventually had NIRS equipment placed in grain terminals at shipping ports to guarantee the accuracy of protein content of Canada's export wheat cargoes. Associated with the use of NIRS is the dramatic decline, and recent elimination, of the use of chemicals (some used to contain toxic mercury) for protein testing, and the saving of about $3 million each year in operating costs by the Canadian Grain Commission. As well as for wheat, NIRS is widely used for rapidly determining oil, protein, and moisture in many oilseeds, including soybeans, canola, rapeseed, flaxseed, and crambe. It is also used for analyzing the composition and properties of industrial fibres, particularly textiles, and for testing beer. NIRS technology with its many advancements since 1972 in instrumentation, including fibre optic probes; sample presentation; and analytical software, is available to the embryonic Canadian hemp industry for quality and compositional testing for both food and non-food products. Most NIR applications are done on whole oil seeds or fibres and involve little, if any, sample preparation. Avoidance of grinding is a big advantage when analyzing oilseeds. The presence of oil acts as a pasting agent or as an agglomerating agent resulting in inconsistent particle size and characteristics. NIR results are obtained within a minute or two, provided the instrument has previously been calibrated. A single scan of the sample yields an absorption spectrum that contains information on numerous constituents and parameters. NIRS is a rapid, efficient, and thereby, low cost analytical technology. NIRS works by measuring the absorption of light energy in the near-infrared region (next to and longer in wavelength than visible light) of the electromagnetic spectrum. All natural materials are made up of molecules that are constantly vibrating. Bonds between light atoms, such as carbon, oxygen, nitrogen, and hydrogen, particularly absorb the energy in this region. Under the influence of irradiation by light, some molecules change their energy level. This causes absorption of energy at specific wavelengths. By measuring the reduction in energy at these wavelengths, it is possible to determine accurately the amount of constituents present. This paper describes some of the specific applications of NIRS that should prove useful for the cost-effective analysis of hemp products. OILSEEDS NIRS is useful for determination of composition (including % oil, % protein) in oilseeds such as canola, safflower, flax, rapeseed, sesame seed, and cottonseed, and oil-bearing legumes, such as soybeans and groundnuts. It can also be used to determine minor constituents including anti-nutritional factors, such as glucosinolates in canola, and factors affecting quality, such as content of chlorophyll in canola. Fatty acid composition has been determined in husked sunflower seeds by NIRS. Specific fatty acids determined in whole canola seed include palmitic, stearic, oleic, linoleic, linolenic and as well as total saturated fatty acids. It is expected that in the future prices for oilseed will be based on quality factors such as oil and protein content, chlorophyll level, and possibly fatty acid composition. These trends may extend to hemp seed and oils, provided the factors that affect quality can be readily and inexpensively measured. For example, a 1998 NIR spectrum taken for hemp oilseed shows a sharp peak at 670 nm (wavelength). This peak is caused by chlorophyll, which is a likely grading factor in industrial hemp. A valuable application of NIRS is for the screening for quality factors in breeding programs. Since the sample is not destroyed in the analytical process, the material can later be planted. FIBRE Despite widespread use of NIRS in the food industry, until recently considerably less research had been conducted on applications in the textile industry. Much of the use of NIRS has been for qualitatively distinguishing among fibres such as rayon, polypropylene, nylon (two types), wool, cotton, PET (polyethylene terephthalate), and acrylic. Even similar cellulosic fibres such as cotton, flax, and ramie can be clearly distinguished qualitatively by their distinctive NIRS spectra. Quantitative use of NIRS includes analysis of blends, for example, for cotton/polyester ranging from 75/25 to 25/75, or cotton/flax from 10 to 40 % flax. US law requires that garments must maintain a fibre blend ratio within 3% of the stated blend on the label. In recent years, NIR methods have replaced several chemical and physiochemical tests that are routinely performed in textile plants. The conventional test for measuring blends takes 4 hours and involves the destruction of one of the fibres and measurement of the loss of weight. For blends involving similar fibres such as cellulosic flax, cotton, and ramie, or proteinaceous wool, mohair, cashmere, and angora, the destructive method is not effective. Microscopic analysis is used conventionally. The analysis is very difficult to perform and can only be carried out in specialized laboratories. NIRS analysis, based on spectral differences, can be more reliable. In approximately 75 textile plants in the US, quality control on the proportions of various fibres in blends is assured by NIRS. These blends include polyester/cotton, polyester/acrylic, wool/polyester, wool/cotton, rayon/polyester, and acrylic/cotton. The textile industry utilizes high speed and sophisticated technology to achieve high productivity and high quality. NIRS is a compatible testing method giving process/product information in real time in the process stream. Functional properties such as maturity and fineness parameters of cotton fibres have been estimated by NIRS. These parameters include cross-sectional areas calculated from Arealometer determinations, specific surface, causticaire maturity index (%), and micronaire reading (fineness). Cotton maturity is an important property for fabric quality and dye uptake that has been automated in textile manufacturing plants by the use of NIRS, thus replacing a 15 minute to 4 hour test with a 20 second one. The NIR technique is used on-line in textile manufacturing for the control of sizing. In this process, a film-forming resin such as starch, polyvinyl alcohol, or polyacrylic acids is applied to yarn to provide a protective coating. Resin provides strength and surface characteristics to the yarns so that they withstand forces involved in weaving. NIRS has been found useful as well for the determination of the amount of two durable press resins on cotton fabrics. Areas of future research should include the ability of NIRS to predict mechanical properties of hemp fibres, such as tensile strength and tolerance of impact loading, bending stresses and abrasive forces, not only in textiles but also for numerous non-textile products. BEER NIRS has a place in the compositional and quality analysis of beer. It is used for measuring such constituents as ethanol, maltose, original extract of beer, free amino nitrogen, and total soluble nitrogen. Despite its speed, efficiency, and flexibility, as the method of analysis in industrial applications, NIRS is subject to certain drawbacks. The technology is most advantageous when large numbers of routine analyses are to be performed. A major up-front task in the use of NIRS is the need to develop calibrations for each constituent or parameter in each type of product using a set of representative samples that have been analyzed by conventional methods. Furthermore, NIRS has always to be supported by conventional analysis on a portion of samples tested, such as 5%, to ensure on-going accuracy of the calibration. Although the cost of NIRS instruments is gradually declining, instrumentation costs are reasonably high. When the NIRS is used for high through-put routine analyses, however, the instrument cost is easily offset by the savings in cost of conventional analyses, and the economic advantage of the timely availability of data. It is expected that NIRS can serve numerous uses in the analysis of hemp crops and their food and industrial products, as it does for many other commodities globally. For quality testing, control, and marketing, the emerging hemp industry in Canada today can avoid establishing many of the high cost, cumbersome, chemical and physical testing methods of past decades in favour of rapid, non-destructive methods such as NIRS. Moreover, the industry can avoid the use of considerable amounts of chemicals for testing consistent with hemp's environmentally-friendly vision. Credits: "Making Light Work" was the title of the 4th International Conference on Near Infrared Spectroscopy held in Aberdeen, Scotland, 19-23 August 1991. "Let me make light work for you!" is the slogan used by David W. Hopkins, NIRS Consultant, Battle Creek, MI Diane F. Malley is President of PDK Projects, Inc., a new company devoted to agricultural and environmental applications of near-infrared spectroscopy. Phil Williams is Head of Analytical Methods Development Section, Grain Research Laboratory, Canadian Grain Commission, Winnipeg, Manitoba.

HEMP SHORTS

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Let the HCFR know. We are interested in profiling new, start-up hemp companies and business initiatives to help you find markets, products, buyers, investors, allies and mentors. Please contact Arthur Hanks, HCFR Editor, with information about your company including your business summary, and contact information (including phone and email, and web address). Please communicate clearly when your business started.

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NEXT ISSUE:

Will feature a Cross-Canada snapshot, new Canadian ventures, research from New Brunswick and more. Delivery date is June 14th.

DISTRIBUTION & SUBSCRIPTION INFO:

The HCFR is available for free to interested parties only on the Internet. Estimated circulation for this first issue is 3,000. We encourage associations working in the industry to circulate the HCFR to their members. We also invite Webmasters to post the HCFR on their sites. Contact us regarding publishing formats.

To subscribe directly to the HCFR, please email jfreeman@ssm.net message line SUBSCRIBE. If you no longer want to receive email about Canadian's hemp industry, please email us at the same address, message line UNSUBSCRIBE.

MASTHEAD:

Publisher: AHEM
Editor: Arthur Hanks [arthurhanks@hotmail.com]
Sales & Sponsorship: Ryan Crawford [ryan_crawford@bc.sympatico.ca]
Distribution: Jason Freeman [jfreeman@ssm.net]
Editorial and Research Assistant: Brian James [hillbily@intergate.bc.ca]

Contributors in this Issue:
Jace Callaway, Jon Cloud, Ryan Crawford, Jessica Dawe, John Dvorak, Jason Freeman, Giselle Lussier, David Pate.

SUBMISSIONS: Submissions are welcome. Please contact HCFR editor, Arthur Hanks, with your story, research or information for inclusion in the HCFR.

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