New York43°

New York43°

Denver23°
February 19, 2020 CONTACT

Hemp Glut Causing Prices To Drop, Unsold Harvests

Hemp Benchmarks report for January was published on Wednesday at the Hemp Benchmarks website. Founder Jonathan Rubin noted that wholesale hemp markets continue to face significant challenges, including oversupply and declining prices.

The report stated, “We have in previous reports emphasized the current glut of biomass on the market, which has led to farmers being unable to move their harvests. Such market conditions continued in January, with numerous members of our Price Contributor Network reporting that relatively little buying and selling of biomass was
taking place. Transactions that were reported showed high-CBD biomass prices continuing to sink, with the assessed rate for transactions of over 1 million pounds down 53% from last month.

Even the assessed price for high-CBG biomass experienced a 27% downturn. Reports from our network indicate that large volumes of biomass remain unsold, suggesting that further price erosion is possible. Additionally this month, numerous price contributors stated that sales of extracts, specifically distillate, have been sluggish. Very few spot cash purchases are being made and inventories held by producers and processors who are taking splits or tolling fees are growing.”

His exhaustive report determined the following results:

  • The glut of CBD biomass persisted in January. Numerous members of our Price Contributor Network reported few spot cash transactions, while large volumes remain unsold. The aggregate price for all transaction volumes declined 31% month-over-month, while the assessed price for large transactions (1 million pounds +) sank by 53%.
  • Sales of CBD extracts, particularly distillates, were also reported to be sluggish in January. Cash transactions are also rare, while inventories of producers and processors taking splits and tolling fees are growing. The assessed price for Crude CBD oil sank by 25% compared to December 2019, and the aggregate price for various types of distillates was down 17%.
  • As farmers prepare for the 2020 growing season, prices for clones and feminized seeds of CBD cultivars saw increases this month after several months of declines. However, prices for such items remain down compared to those documented at the end of October, when the USDA released new production regulations with an effectively stricter THC limit. Farmers are concerned that available CBD cultivars could be non-compliant with the new rules, while some seed producers scaled up significantly from last year.
  • Available data shows relatively low planting and harvest rates compared to the amount of acreage licensed for hemp production in 2019, yet growers still generated enough CBD biomass to swamp existing processing capacity and tank prices. Wisconsin officials stated registered growers reported that only 6% of their crops had been sold by the end of 2019, on average. With production looking as if it will increase in 2020, processing capacity and demand appear as if they will have to expand significantly to absorb it.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

You may also like


About Us

The Hemp Market Report will target news from the fast growing worlds of cannabidiol (CBD) and hemp. As a sister site to the Green Market Report, HMR will cover financial stories, but also take a look at lifestyle news as well. The Hemp Market Report will also publish sponsored content as we seek to expand our content offerings.


READ MORE



Recent Tweets

@GreenMarketRpt – 3 hours

“let’s get back to fundamentals.” Matt Nordgren he says it’s time to focus on cash flows #NECannaBizCon

@GreenMarketRpt – 4 hours

RT : Move Over Impossible Burger, The Is Next On The Menu

Back to Top

You have Successfully Subscribed!