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Hemp bill could harvest opportunity

Gov. Scott Walker recently signed a bill that allows Wisconsin farmers to soon begin growing industrial hemp. Industry advocates say hemp is used in many applications including health food products, textiles and building materials.

For Rock County farmers and residents, the potential for good news does not stop there: the area is on a short list of potential sites for at least one hemp seed processing plant, which, Prescott resident and owner of Legacy Hemp, LLC, Ken Anderson said, he plans to build in the near future. The company sells industrial hemp seed to and contracts with producers.

As described by Wisconsin Farm Bureau Federation (WFBF) Senior Director of Governmental Relations Rob Richard, the bill allows for a 90-day period during which the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) is charged with studying the growth, cultivation and marketing of industrial hemp as well as developing a set of rules to launch a pilot program. Wisconsin farmers then may begin maximizing such opportunities while keeping within the boundaries of federal law. After the 90-day period, Richard said licensure is expected to become available through DATCP to farmers who apply and meet the criteria.

Farmers should be able to send in an application by March, Richard said. “Anyone can apply to grow hemp. There will be certain requirements. You can’t be a felon with drug convictions. Otherwise, most anybody can apply. There are no limits about land minimums or maximums.”

‘We don’t know yet’

Rock County Farm Bureau President and a farmer of some 4,000 acres located west of the city of Janesville, Doug Rebout, said he believed the pilot program was a good idea.

“In my opinion, anytime you can add something new into the mix for farmers, I think it’s a good thing,” he said, adding that farmers have faced economic struggles over the last few years.

“The price of corn and soy is not real favorable to us,” he said, adding that those crops are staples in Rock County because the area has compatible soil, and crop rotations, with two years in corn followed by one year in soy, keeps the soil healthy. “Soy puts things into the soil that’s good for the corn,” he said.

“In my opinion, one reason prices are down is because our farmers are doing such a good job of raising corn and soy that we have an abundance,” he said. Bringing something new to the mix could help renew profitability levels for farmers.

Still, the concept of farming hemp is new, he said, adding, “We haven’t had the chance to see if it fits into our operation; we don’t know enough yet.”

Cultivating opportunities

Dale Beaty, WFBF chief administrative officer for the past 13 years, has been working with his staff to advocate for the passage of the bill. While he’s not a farmer, he said, he did grow up on a dairy farm near Hillsboro, and holds a bachelor’s degree in agricultural economics from UW-Madison and a master’s degree in management, organization and leadership from Capella University.

“We have some of the best soils in the state in Rock County,” Beaty said, describing industrial hemp crops as another option in a farmer’s toolbox.

The WFBF became involved in advocating for the bill, Richard said, last December after a co-author, Rep. Jesse Kremer, R-Kewaskum, queried the agency about its policy. Without one, Richard said, the WFBF policy team looked at the proposal and decided to come out in support of the bill.

Describing himself as a fulltime lobbyist for farmers, Richard said he is not a farmer.

Groundwork for the bill and subsequent pilot program, Richard said, was laid within the USDA 2014 Farm Bill.

Farmers considering the pilot program, he advised, should not be making plans to lay seed before establishing a contract with a buyer.

“This whole crop is new, with new markets, so you need a contract first,” he said.

Emerging markets

“There is an established market we couldn’t tap into, but now we can because it’s legal, “ Richard said, describing some $600 million worth of imported hemp-related products from Canada and China, used within the United States annually.

“There are emerging markets in textiles, construction and food. There are even uses for it as interior panels for cars. The more we move from oil-based products to plant-based, the more markets there will be,” he said.

“Wisconsin is No. 2 in the country for organics, behind California, with certified organic soils. We can tap into that market,” he said adding that seeds grown for consumption in products such as cereals are healthy. “They are high in omegas 3 and 6, and fatty acids. They are almost a super food,” Richard said.

The seed, stalk and fiber are all marketable commodities, Richard said, describing the seed as the most immediately profitable for Wisconsin growers.

“At least for the first few years, the stalk and fiber are not profitable, but they will be the icing on the cake,” he said, noting that he is personally aware of people who want to invest in processing plants for fiber and stalks.

“Until then, we may be able to send them out to Minnesota. It’s all new, but Wisconsin is poised to become the leader in seeds already,” Richard said.

No special equipment is needed to farm hemp, Richard said, adding it can be profitable on an acre with conventional seed, making a net profit of $350 to $400 an acre. Certified organic hemp can make a net profit in seed of $900 to $1,000 per acre.

Richard described hemp as a “good rotation crop,” noting that during the beginning of the 20th Century, hemp was a “leading industry,” and was used rotationally, because it promoted soil health through deep root growth, which breaks up and aerates the soil, and its ability to return nutrients to the soil. It also uses one-third of the water used by corn, he said.

From Kentucky to Wisconsin

Richard described Anderson as instrumental in bringing hemp to Wisconsin, noting that after the introduction of the 2014 Farm Bill, Kentucky was the first state to import hemp seed, and Anderson was already on the front lines, working with the federal Drug Enforcement Agency to bring imported seed from Italy.

Today, Anderson farms, with a partner, and through producers with whom he contracts, some 1,000 acres located in Kentucky, Minnesota and North Dakota.

“He’s been very helpful to me,” said Richard of Anderson. “He is a place to get seed. He will help farmers get seed and work with them to market the seed. He will be a middleman to help farmers find a contract,” Describing Wisconsin as his home state and “near and dear to his heart,” Anderson said he hopes to sell farmers seed, but only if they have established contracts. He hopes to contract some 4,000 acres, with 3,200 of them certified organic, within the state next year, he said. (Those interested in contacting him for information can do so at: Ken@legacyhemp.com).

Processing plants and jobs also occupy his thoughts, he said, noting that locations in Pierce and Vernon counties have also made the short list of potential plant locations, with those location garnering attention because of their proximity to certified organic fields.

Rock County made the list in large part because of a connection made with Rock County Farm Bureau board secretary Sheila Everhart, who also serves as vice president of the Wisconsin Agricultural Tourism Association, Anderson said. Everhart is a resident of the Town of Janesville. Her family owns Everhart Farms and raises beef cattle and soybeans.

Everhart noted a strong interest by Wisconsin farmers in hemp production, evidenced, she said, by attendance at the WFBF annual meeting held recently in the Wisconsin Dells, during which, she said, some 54 farmers indicated an interest in diversifying their crops. She believed Rock County would make a good candidate for the processing plant because of its strong farming heritage and thriving economy.

Rock County is also interesting, Anderson said, because of its proximity to Madison where product development companies are already located.

“I will be looking for communities that are staving for jobs. That weighs heavily. If we can bring jobs and some economic development to a community, that’s one of our goals,” Anderson said.

With two sets of processing equipment already purchased, Anderson said, he hopes to have a processing plant operating within the state in time to process grain produced in Wisconsin next year.

Those interested in learning more about the industrial hemp pilot program can do so by visiting the DATCP website: datcp.wi.gov.

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