Montana Hemp Co-op continues to push forward

Montana Farmers Union held a summit in Great Falls Tuesday for local producers to discuss what is next for Montana’s hemp industry, and members of Montana Hemp Cooperative, a hemp co-op based in Blaine County, said they spoke at the summit with several members of Farmers Union and other hemp processors on what the next step should be for the co-op.

“The main takeaway is, for me, ’cause where we are at, there’s just nobody really, other than the co-op, there is nobody looking at how to process fiber right now on a mass scale,” said Chuck Holman, owner of Earth In Hand: Soil Health Services and organizer of Montana Hemp Co-Op.

A press release from the Farmers Union said hemp is a rapidly growing industry and with the industry quickly expanding it is important producers continue to get education on growth, marketing and processing hemp. It added that the summit meeting Tuesday was to provide an opportunity for producers and processors to discuss crop growth and potential opportunities they may have in the future.

Some of the speakers at the event included representatives from Montana Department of Agriculture, Montana Tech, Montana Farmers Union and Ag Processing Solutions.

Holman said that since the Montana Hemp Cooperative started last year, it

has been taking its time to get all of the information needed and a proper business plan organized to maximize the longevity and the benefit of the co-op. In the past year, the co-op has been working on creating a structural foundation. He added that the co-op has been working with Bear Paw Development Corp., Lake County Community Development Center, Montana Farmers Union and have vetted and selected a law firm to represent the co-op.

The co-op has also been working to narrow its scope of operations, he said, determining Phase One of the co-op should focus on processing hemp fibers. 

In the past couple of months, Holman said, the co-op has been looking at different markets and what is going on not only in Montana markets but national trends in the hemp industry.

“The thing that’s going to stick around and be the most solid, probably for years to come, is the fiber, it’s not

going to have these big heavy swings and different things like that,” Holman said. “There are just so many products that are available out of it.”

Something the co-op is also looking to do in the following months is to apply for a grant to conduct a feasibility study, he said. He added that the feasibility study will go over what resources are in the area and what are the potentials for the co-op in the region.

Holman said the co-op has been working with Bear Paw and Lake County Community Development Center to apply for a grant through Bear Paw Development from the Big Sky Trust to pay for a feasibility study. He added that at the summit meeting the co-op also had a chance to sit down with Farmers Union President Walter Schweitzer and spoke with him about possible support from the Farmers Union with the feasibility study.

The feasibility study will look at things such as the economic impact, feasibility of the business and markets for a hemp processing facility in northern Montana, he said. The grant the co-op is applying for requires matching funds and the co-op intends to ask the Montana Farmers Union for help with those matching funds as well as its support in the co-op applying for a USDA Rural Development business grant to cover the matching cost for the study.

Holman said Schweitzer expressed support for the co-op and once the co-op has the grant written the Farmers Union would be willing to look over the proposal.

Holman added that the Farmers Union is about supporting Montana producers and the co-op offers a benefit to local producers across the state.

He said Schweitzer gave no guarantee the Farmers Union would assist in funding the feasibility study, but was in support of the idea if all goes well.

Schweitzer is a farmer himself and even has experience with growing hemp in the last year, Holman said. He added that the Farmers Union also funded a study for a company regarding Hempcrete, which hemp fibers are used to reinforce concrete. The study went well and, with the help of the Farmers Union is moving forward.

Schweitzer said the summit went very well and said he is willing to work with Montana Hemp Co-op.

“I think what they are putting together is intriguing and I’m looking forward to their proposal,” he said. “… I do believe that hemp has a lot of potential here in Montana. I believe the crop will perform well here, but the infrastructure hasn’t caught up yet.”

He added that the Farmers Union assisted in paying for the feasibility study investigating Hempcrete and is looking at trying to find avenues to further assist in the infrastructure of hemp processing to help hemp growers in the area.

Because hemp was made legal a year ago nationwide, hemp processing has not caught up to producers, leaving a large amount of possible income available but no way to access it in the market, he said, adding Montana participated in the country’s pilot program for a number of years and has started looking into creating more infrastructure around hemp production.

Schweitzer said that because of the legalization of hemp, producers also suffered from a poorer quality of seeds this year, which led to a less productive growing season. He said it was the biggest negative for producers last season and now the national hemp program is catching up, hopefully growers will be able to have a better seed this year.

But agriculture in general is in a crisis, Schweitzer said.

“We’re in a unilateral trade war, it seems, with all of our major customers, and we are struggling to find crops that will pay the bills, and hemp has the potential of doing that but we need a market and what (the co-op is) pursuing is a market for our crops.”

He said he wants to support their efforts.

Holman said by focusing on fibers the co-op will have a wide range of products it will be able to produce and simplify the processing process. He added that it is better to focus on one thing well then to spread themselves too thin and do something poorly.

Blaine County hemp producer and co-op member Katon Gerky said the co-op can do a lot on their own, but getting the Farmers Union involved will be a large help in speeding up the process of getting the co-op up and running.

He added that hemp fibers can be used for a wide range of goods, many of which farmers and ranchers in the area can use in their operations, such as bailing twine, animal bedding and wood stove pellets.

Hemp fibers can also be used for spill kits, stucco and concrete reinforcement, and insulation.

“We are farmers,” Gerky said. “We understand a lot of things but what we obviously understand the most is agricultural use products.”

Holman said, originally, the co-op was looking into processing cannabidiol, also known as CBD. Crude CBD oil last January was selling on the market anywhere between $2,000 to $7,000 a liter, although by the end of the year the market value for CBD dropped to approximately $450 a liter. He added that it was a dramatic drop in the market value.

“That gold rush is gone,” he said.

Although producers can still receive a small profit from producing CBD oil, the market still needs to normalize, he said.

“It’s just something we didn’t want any part of,” Holman said. 

Gerky said the CBD market is in a current freefall and although the market is trying to stabilize and the CBD market will never completely go away, the market for CBD is going to most likely suffer from rapid fluctuation for the foreseeable future. 

He added that something else producers should look at for CBD is companies and some producers are already working to figure out methods to mass-produce CDB. The process is currently very extensive, with producers taking a hands-on approach to try to maximize the amount of CBD they are able to harvest from the plant. He said the process is very labor intensive and takes a lot of time and work to be able to get the best crop as possible. 

But as time progresses and people get more accustomed to working with CBD and the extraction methods and equipment improves, CBD will not be as labor-intensive, Gerky said. Instead producers will be able to grow a large amount of crops, containing lower CBD levels, and still be able to successfully extract large amounts from their crops.

“I don’t think it’s unrealistic to see people basically field planting CBD acreage and harvesting it mechanically,” he said.

Holman said that, in the future, the co-op may also look into possibly processing hemp grain, which can be used for feed or alternative food sources, but as of now hemp grain is not approved by the U.S. Food and Drug Administration for animal feed. He added that a number of organizations and groups have formed in the past year to push for the FDA to approve hemp seed for animal feed, although the change has to be made at a legislative level, making adjustments in the Farm Bill. He said people need to petition to their senators and Congress members across the country to push for the change.

In the future, the co-op could possibly produce hemp hearts and other animal feeds which can be used for cattle, horses and small pets, he said. 

Gerky said the categorization doesn’t mean hemp grains are not safe for cattle, only that hemp is not categorized as safe for cattle by the FDA. He added that getting hemp grain approved for animal feed is still a few years in the future, but as soon as it is approved the price of hemp grain will increase dramatically.

Producers can utilize 100 percent of the crop, Gerky said. He added that hemp has very little waste and has a large amount of things producers can use the crop for. Some years grains may be at a higher market price than fibers, so producers can harvest the grains and harvest the fibers as a byproduct, other years it may be reversed with the fiber as the main crop and the seed will be the byproduct.

“At the end of the day, it still kind of fits the overall concept that the entire plant itself is usable and therefore we would be using the entire plant,” Gerky said.

He added that something the co-op can look into is the fiber can also be used to create biofuels. According to research, Gerky said, hemp oil is a very efficient for biofuel and per acre it produces twice as much fuel as the leading competitors in the same category, such as canola. He added that the only biofuel source which is higher than hemp was palm oil.

As more research is done into hemp and more producers start working on growing and processing hemp, more information about the crop needs to be available for producers, Gerky said. 

He added that everyone at the summit meeting seemed to be positive and he believes hemp can be in important crop for producers moving forward.