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In general, the technology which has traditionally been used to process
hemp (and is still being used in China and Eastern Europe) is not ideal
for modern agriculture because of the high labour demand and therefore
high costs of these methods. Although hemp has not had the benefit of continued
cultivation and processing in the West, technology has been developed for
similar crops, in particular kenaf and flax, which can be adapted to hemp.
Also, in the past few years, a number of European companies have developed
innovative new approaches to processing hemp fibres.
The degree and type of processing required is determined by the destination
of the crop. End users, including paper manufacturers, building product
suppliers and textile mills each require a supply of hemp in different
forms, ranging from raw stalks to fibers-only or hurds-only. By transporting
unprocessed hemp, shipping costs rise because the "waste" portion
of the stalk is shipped with the portion that the purchaser requires as
inputs for production. Harvesting for chopped stalk essentially eliminates
processing costs, but does not capture revenue for the raw fibre. At advanced
stages of raw crop processing, hemp is more marketable and less costly
to transport than is unprocessed hemp.
As the requirements to the fibre increases, so does the necessary processing,
and this technology also becomes more complicated and costly. To determine
the economic viability of hemp, I will therefore focus on three approaches
to producing hemp commercially:
1. Separation of Bast Fibres from Hurds
This is undoubtedly the highest value-added approach to hemp, but it
is also the most involved and costly, and the most difficult to estimate.
Under optimal conditions, the raw fibre and hurds would be sold separately,
generating the most significant returns per hectare. Traditionally fibre
separation was a lengthy process of water or dew retting (rotting) the
crop after harvest either in water tanks, rivers or ponds, or on the field,
followed by breaking the stems, scutching and finally hackling to ensure
clean fibre. This basic process has recently been used in France and in
trials in England, where processing was found to be "the most difficult
part of the whole venture and a key feature in any future expansion."[38]
The UK trials attempted to use as high a degree of mechanization as possible,
and so after field retting and baling, the crop was delivered to an existing
flax processing factory for decortication (fibre separation).
Although flax processing equipment has proven adequate for hemp, equipment
designed specifically for hemp processing would be much more efficient
and thus profitable over time. There has been talk of the possibility of
mobile processing units to minimize transportation costs, but in the experience
of UK's Hemcore, the amount of equipment needed would make this approach
unrealistic. Regional primary processing units, however, may be a more
realistic approach to reducing these transportation costs. Since the Canadian
climate is ill-suited to field retting, and as there is no existing long
fibre processing infrastructure in Canada, a traditional processing strategy
is at best a longer term opportunity which is certain to require significant
capital investment, and further study.
A cost efficient and effective approach to fibre separation has been developed
in the Netherlands by E. de Meyer and W. Huisman. Their process requires
ensiling of the stalk for a minimum of 6 months after field chopping. After
the ensiling period, the very clean bast is easily separated from the hurds
by floatation - the bast sinks, and the hurds float. This process is estimated
to cost only about C$5/tonne, versus mechanical decortication which has
a much higher rate of cross-contamination between the bast and hurds, and
can cost up to C$100/tonne. The disadvantage of this system, however, is
that the ensilage period causes a substantial reduction in the strength
of the bast fibres, thereby significantly reducing their value for most
industrial applications. If a method can be discovered to better preserve
the bast fibre strength this would be an excellent fibre separation alternative.[39]
A number of innovative approaches for smaller scale hemp processing have
recently been developed on the lab scale, including using steam explosion,
detergents and ultrasound, but for the most part these all still lack demonstration
at the pilot or production scale. Some of these technologies produce short
fibre or "cottonized" hemp which has the advantage that it can
be spun on slightly modified cotton or wool processing equipment.
The first commercial project using such technology is being undertaken
this year in the former East Germany. Three Flaksy (bast fibre decorticating
and preparing) units recently developed in Germany by the Bahmer Company
are going into operation in June, each having an hourly processing capacity
of two tonnes of flax and/or hemp fibre. Two of the lines are intended
to process flax into a fine short fibre for the textile industry, but will
likely also process hemp. The third unit is combined with a detergent processing
step which produces a very fine, cotton-like flax fibre (FLASIN).[40]
Although such new processes are very promising, this technology is still
in its infancy, has limited availability and is expensive to install and
operate. The price of a Flaksy line amounts to US$2 707 500 "delivered
ex works, Germany"[41] and may be even higher depending on the quality
of the breaker / decorticator unit, the number of separation steps and
the sophistication of the dust collection system. In addition, operating
costs per shift for any of these lines are likely to be US$195 000 - $325
000.[42] It will be some time, therefore, before such technology will be
economically and technologically feasible to implement in Canada.
The high cost of purchasing this machinery from overseas vendors has led
to an increased interest in the development of domestically produced equipment.
One example is Geof Kime of Hempline, Inc., growers of the first Canadian
hemp crop since prohibition. Kime's expertise in the field of equipment
design and Hempline's early entry into the business has given Hempline
Inc. a distinct first mover advantage. Nonetheless, for the time being
it seems that it will be cheaper to import finished textiles from such
low-cost hemp producing countries as China and Hungary.
2. Whole Stalk
When growing for the whole stalk of the hemp plant, very little processing is required. The crop can be mowed and then baled with conventional combines. The only further processing required is drying (which can be done in the field after mowing) and chopping which can be easily done with existing equipment. If the highly valued bast fibre is not to be separated from the hurds, however, it makes more economic sense to grow hemp for stalk and seed, and harvesting the stalk after the seed (see below).
3. Seed Pressing
The principal challenge in pressing hemp seed for oil is that hemp seed
oil is so highly unsaturated that rancidity begins as soon as the oil is
exposed to heat, light or air. In 1986, advanced seed oil companies began
using technology that could extract oil in the absence of all three. This
proprietary technology uses inert gasses and vacuums to cold press the
seeds without contaminating the oil with oxygen, and so avoids starting
the chain reactions that create rancidity. Using this technology reactive
oils like hemp can be pressed into a product which can be kept in a bottle
for up to a year without going rancid. [43]
Hemp oil is currently very expensive (about three times the price of flax
oil), but again this is almost exclusively due to the high cost of importing
seed. Since they have almost identical yields, and oil contents, and flax
is also very highly unsaturated they should compete head to head price
wise. Hemp, however, has the advantage of being flavorful, while flax oil
is generally considered unpalatable, and is almost always sold for consumption
in capsule form.
Since the pressing technology best suited for hemp seed is presently being
used for other highly volatile oils, in particular therapeutic oils, hemp
would at least initially compete in this high value specialty oil niche.
Its main competitors would be oils such as: evening primrose oil, borage
oil, black currant seed oil and flax oil, all which are also typically
taken in capsule form. Hemp seed oil would likely not compete against cooking
oils, since the extreme heat of frying changes its molecular structure
and may diminish its nutritional value.
Hemp oil can also be used for commercial purposes, in particular as a lubricant
or in the production of varnishes and oil paints. For centuries hemp oil
was the principal oil used for oil paints as it is a particularly good
vehicle for ground pigments, and is very quick drying. In these uses hemp
seed oil's proneness to rancidity is not as significant a factor, since it
can be easily stabilized and preserved with the addition of vitamin-E.
In these applications, again its most serious competitor is the less ideal
flax oil, which many manufacturers of paint supposedly were forced to switch
to after hemp's prohibition.[44]
After harvesting hemp for seed, a substantial stalk crop remains. As has been previously discussed, the lower fibre quality would not make this crop as suitable for fibre separation even if the processing technology were available, though it may find a niche market as a strengthening additive for recycled paper and packaging. Unseparated, the whole stalks may be a valuable input for fibre board and other composite building materials. The crop can be mowed and then baled with conventional equipment, though some modifications may be required. The principal limiting factor will be the necessity of finding a processor/ end user within a close enough proximity to the farmer to ensure that transportation costs are not prohibitive.
Less rigorous fibre separation techniques which result in separated bast fibre with a greater degree of ‘contamination’ in the way of unseparated hurds may prove to be an exception which could justify separating the residual fibre crop for such specialty purposes as a strength additive for recycled paper and packaging. One possible alternative may be portable decorticators which separate the fibre on the field and offer the farmer the opportunity to add value to the crop. A prototype has been developed in Ontario by Jim Hill of Agra Hill. Hammer mills might also be an existing alternative. Tests have shown their effectiveness, though on a commercial scale energy costs may be prohibitive.
Fibre Separation:
Bast Fibres:
According to UK trials, Sue Riddlestone reports that when processed on
a commercial scale, one tonne of raw hemp stalk would conservatively produce
182 square meters of 400gsm fabric (73kg). At current wholesale market
prices of approximately C$10 per square meter, this would translate into
C$1820/t. Given the longer term estimates of C$10-14/kg, however, expected
revenue generated from the bast fibre of one tonne of hemp would be C$730-1022.[45]
Since 2.5-4 tonnes of hemp can be grown per acre, the total primary bast
revenue per acre would be C$1825-4088. These prices, however, must cover
the very substantial processing required to achieve a fine hemp textile.
As an alternative input for fibre glass, one tonne of stalk should yield
a minimum of 150-200kg of suitable primary bast fibre. At the reported
market price of C$2800/t,[46] this would generate C$420-560 per tonne of
stalk, or C$1050-2240/acre.
As an alternative to imported jute, Canada Cordage of Kitchener, Ontario
has offered $800/tonne for raw bast fibre for processing into yarn, rope
and electrical cable filler. Although a superior fibre, at this price,
bast fibre from an acre of hemp would generate $300-640/acre.
As an input for high quality, specialty paper, it has been estimated that
hemp in the long term could command a 20% premium over top quality long
fibre pine pulps. [47] Presently, however, because of its limited supply,
the market price for hemp pulp is in the US$2100/t range, versus around
US$600/t for a standard grade of softwood pulp.[48] This premium is deceptive
since the price of the input is typically a small proportion (approximately
16.5%)of the final cost of the pulp. In late 1995, for instance, standard
softwood pulp prices hit an all time high of US$1000/t. At the same time,
standard softwood wood chip prices were also at their height at US$165/t.
At current hemp pulp prices, then, hemp bast only commands C$485/tonne.[49]
Hurds:
The most likely use for the principal by-product of processing, the hurds, would be as a building product raw material, or as animal bedding, specifically for horses which because of its superior absorbency and rapid composting in Europe fetches US$130-250/tonne. In either case, the main competitor is wood shavings, and more recently other non-wood crops such as straw or flax shives. These materials are typically in the C$55-$70/t. Even at a very low final yield of 1500-2400 kg/acre (60% hurd yield), these very low prices would generate an additional C$83-$168/acre. At the premium generated by hemp hurds elsewhere, this additional revenue would be C$285-684.
The uses and thus price for whole hemp stalk is likely to be similar to hemp hurds, although the inclusion of the strong bast fibres may in the future command a premium price as an input for composite building materials. Assuming that when being grown for whole stalk, the hemp is also being grown for seed, for yields of 2.5-3t/ac, the projected revenue from whole stalk would be C$137.5-$210.
Until Canadian grown hemp seed is available, hemp seed and hence oil prices in North America will remain inflated. Currently, premium quality, cold pressed hemp oil sells wholesale for approximately US$50/gallon or C$18.50/liter which translates into approximately $17.50/kg. Cold pressing seeds with oil contents of 30-32% should yield 20-24% oil in a single press. Thus with initial expected seed yields of 750-1000 kg/ha, a hectare of seed pressed for oil will gross C$2625-$4200. These wholesale prices include transportation, cleaning, drying, pressing and packaging costs, distribution costs, margins, etc.[51]
Once domestic commercial hemp production has become commonplace, the likely long term farmgate price for raw hemp seed has been estimated at C$7.50-$10.00/bu ($0.36-$0.48/kg). This price is comparable with, though on the higher end of prices for other similar seed crops to reflect its lower yields. At this price, an acre of hemp grown for seed would generate $270-$480/ha. Currently in Europe organically grown hemp seed fetches C$1300+/ha. In 1998, Canada’s first year of commercial hemp production, Kenex Ltd. is contracting seed production at C$0.50/lb, which should translate into seed revenues of C$825-1100/ha.