Markets

Market returns for hemp stalk, fibre, hurds or seed depend on a number of factors, including:


The Canadian hemp industry is at a stage in its development where the actual income per tonne is difficult to determine, because full scale production has not been attempted. Economies of scale are expected to reduce costs significantly, but actual processing and capital investment figures can only be estimated, and are largely based on the experiences of other countries. The market prices expected for hemp are derived from current market prices for the next best alternative.

Principal Uses of Hemp

Although hemp has innumerable potential uses[21] this study will focus on the more common, large scale commodity products for which hemp has promise as a potential alternative input. The most often quoted uses of the fibre which define the necessary processing technology are as follows:

1)Energy source (whole plant):

Because of its high yield potential, hemp has been acclaimed as an ideal biomass fuel. It can be burned as is, or processed into charcoal, methane, methanol, ethanol, or gasoline. Typical methodology for the processing of hemp for fuel is destructive distillation or "pyrolysis". Destructive distillation involves the subjection of hemp hurd to heat and distillation in the absence of air. Hemp charcoal as a biomass fuel can be burned in today's coal-powered generators. Alternatively, Methane can be produced by the anaerobic decay of hemp. Also, ethanol is typically made from cellulosic biomass, and hemp is an excellent source of high quality cellulosic biomass.

Although no processing would be required for this application, high transport costs would necessitate regional processing or power generating plants. The economic potential of this application in the short term is questionable, however, since hemp would have to compete with other agricultural waste products. North American agriculture currently generates over 350 million tons of cellulose waste a year (straw, corn husks, etc.) much of which is burnt in the field but has energy generating capacities generally at least equal to hemp (see table below).[22]

Plant Energy Output (kJ/kg)
Corn 16510
Grains, Cereals 17610
Rape 20170
Wood 18660
Hemp 16450



Source: H. von Buttlar, "Hemp: Perspectives for use as a Boiler Fuel," GHK Kassel/Universitat

Since these agricultural "waste" products currently generate no additional revenue for the farmers, any amount would be incremental income. To grow hemp specifically for this purpose, then, would neither take advantage of hemp's unique fibre qualities, nor would it command any premium price over the likely nominal costs for such agricultural waste.

2) Building material (bast, core or whole plant):

The possible building material applications for hemp range from an input for fibre board to insulation to hemp houses. Although the bast fibres, because of their high tensile strength, have significant potential as replacements for glass fibres for fiberglass or as a replacement for asbestos in fibre cement, such applications would require the bast fibre to be separated from the hurds. Joe Hickey of the Kentucky Hemp Growers Co-op has reported that a major fiberglass manufacturer calculated the market value of bast fibre to be $2000/ton.

Composites, which include paneling, medium-density fiberboard, trusses, and support beams, comprise the fastest-growing segment of the wood-products industry. In 1994, building materials accounted for 20 000 tons of assorted crops, in 1996, it is expected to account for 500 000 tons.[24] Washington State Univ.'s preeminent Wood Composite Laboratory has tested hemp for use in medium-density fiberboard, and lab results show that hemp is up to twice as strong as wood. Certain other low-cost agricultural waste products are already being used in this process (straw, for instance), but hemp has a significant advantage because of its high tensile strength. Current prices for wood chips used in fiberboard production are approximately US$100/t, while straw is sold for as little as US$10/t for animal bedding.[25]

Hemp hurds, traditionally considered a waste product are now being used fairly extensively in France for insulation materials and when combined with lime naturally petrify to create a pourable building material. This material is five times lighter, yet stronger than concrete, and has superior insulation and fire retardant properties. The most renown of these processes has been patented by a French company Isochanvre.

3) Paper (bast, core or whole plant):

Although in 1994, non-wood fibre sources accounted for only 7-10% of total paper and board production worldwide,[26] they have become the target of widespread interest as traditional wood sources are being depleted, and consumers demand tree-free alternatives. Hemp has additional environmental advantages, since compared to wood fewer chemicals are required to convert the low-lignin fibres to pulp (thus reducing waste water contamination), and hemp requires less, if any, bleaching. Hemp paper also has a much greater resistance to decomposition, is not subject to age related yellowing, and can be recycled much more often than wood.

In Australia there is ongoing research into the viability of pulping the whole stalk, although a study at the Agrotechnical research Institute in the Netherlands concluded that it is better to pulp bast and hurds separately.[27] When processing the whole stalk, a mix of long and short fibres is obtained which has similar properties to (and so would compete price-wise with) good de-inked wastepaper stock, but it drains slowly, and its throughput on standard papermaking machines is two to three times slower than wood.

Australian Newspaper Mills technical manager Len Johnson reports that hemp for newsprint "just looks prohibitively expensive." Nevertheless, Johnson said that in laboratory experiments "we have confirmed that mechanical pulping gives rise to a useful pulp using the whole stem of hemp." At the commercial production and marketing level, however, Johnson said that hemp pulp "competes head on" with TMP softwoods. Johnson also said he was still "keeping an open mind" about pulping hemp for newsprint, hoping that the process can be achieved at a lower cost. Separated longer fibers cut to suitable length, he said, can be used to make stronger papers, even as a "reinforcement" for newsprint, where it could replace the 4% to 25% chemical pulp.[28]

While the hurds can make excellent tissue paper and packaging materials, chemical pulping of the shorter core fiber is thwarted by the fact that "it just won't drain on a paper machine." Once separated, however, bast fibres are ideal for the higher priced but limited field of specialty papers such as filter, currency or cigarette paper. Bast fibre also has great potential as a reinforcing fibre for recycled paper and packaging. Andy Graves, president of the Kentucky Hemp Growers' Co-op has, for example, already received an offer from a boxboard recycler who wanted to order 20,000 acres of hemp to add strength to reused cardboard.[29]

As with its application for building materials, hemp faces stiff competition from other non-wood fibres. Long-bast-fiber pulp, for example, may obtain a premium price of up to 20% above top-quality long-fiber pine pulps,[30] but will face strong competition from such fibers as cotton, sisal, flax and abaca. Other non-wood fibres currently being researched for use in pulp and paper are: kenaf, wheat and rice straw, and cereal grasses. In particular, cereal grasses contribute a readily available surplus material from grain cultivation, are cheaper than trees and require less energy to pulp that wood. Another example is seedflax, a fibre very comparable to hemp, and available in Canada in huge quantities virtually for free, since it is a by-product of linseed oil production.[31]

Al Wong, president of the Vancouver-based Arbokem Inc., has compared straw's low price and low pulp yield with wood's higher price and higher pulp yield, and has determined that straw comes in at $58 per ton, while wood costs $105 per ton. North America annually produces approximately 200 million tons of fibrous crop waste, from which 100 to 120 million tons of papermaking pulp could be produced. North American wood pulp production for 1993 was estimated by the Canadian Pulp & Paper Association to be only 88 million tons.[32]

4) Textiles (bast):

Hemp for textiles is perhaps the greatest value added use for hemp, but it is also the most involved. Seeding and harvesting is critical to ensure only the highest quality fibre, while processing is a multi-step, capital and usually labour intensive process. After harvesting, the primary bast fibres are separated from the hurds, after which they are "hackled" to remove any remaining woody particles and to align the fibres into a continuous "sliver" for either wet or dry spinning into yarn. Secondary bast fibres (or "tow"), the by-products of fibre separation and hackling can be carded and then spun into a lower quality yarn or twine. Alternate fiber separation processes such as steam explosion, ultrasound or pulping can be used to obtain various short fibre qualities (see below).

Although flax machinery can be adapted to produce hemp textiles at a similar cost, more robust machinery would be better suited, especially for fibre extraction. The proportion of bast fibre in hemp plants is typically in the 22-30% range, but during processing, a loss of fibre in inevitable. In U.K. trials, one tonne of hemp was calculated to yield 15% or 150kg of line or high quality fibre. Further losses of 35% in hackling and carding, 5% in yarn production and a further 20% in boiling and bleaching the yarn to accept dye, results in an net yield of 73kg, producing 182 square meters of 400gsm (jeans weight) fabric. In addition 100 kg (10%) of shorter or tow fibres would be generated, and 500kg of hemp hurds. The long term price for hemp textiles has been estimated at US$7-10/kg - above cotton, but below linen (flax), since flax has the advantage of having a higher spinning limit, enabling a finer end product. The potential market is difficult to estimate, except to say that, depending on price, it would be between cotton's 50% of total fibre consumption and flax's 3%.[33]

5) Oil (seed):

When growing hemp for seed a much lower seeding rate (usually only 10-15kg/ha) is used. A number of high yield, monoecious strains have been developed specifically for seed production. These varieties typically yield 0.7-1.2 t/ha, of which 30-35% is oil.[34] This is somewhat lower than the average oil extraction rate for canola of 42-43%, from average yields in Canada of 1.27 tonnes per hectare,[35] but hemp oil has the advantage of having unique nutraceutical properties, and a potentially valuable protein meal and (lower quality) fibre crop by-products. A closer competitor would be flax (linseed) oil, which has very similar uses and an oil content basically identical to hemp.[36] Since plant densities between 80-400 plants per square meter have been shown to have little effect on dry stem matter,[37] seeding at a rate of 15 kg/ha (approximately 80 plants per square meter) should result in both maximum fibre and seed yields.

Given the prohibitive price of importing certified seed into Canada from Europe, another important element to seed production will be the production of viable seed for Canadian farmers. As seed varieties are bred specifically for local conditions and uses, yields of fibre and seed are bound to increase, the cost of seed will decrease dramatically, and thus hemp cultivation will be much more competitive. Finally, a somewhat unusual but serious impediment to growing hemp for seed is that hemp seeds are a favorite meal of birds.

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