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Techno-Economic Analysis of Hemp Production, Logistics and Processing in the United States

FABE-0561
Agriculture and Natural Resources
Date: 
12/11/2025
Asmita Khanal, Research Scientist; College of Food, Agricultural, and Environmental Sciences; The Ohio State University
Ajay Shah, Professor; College of Food, Agricultural, and Environmental Sciences; The Ohio State University

The U.S. market for hemp grain and fiber, a sustainable crop (Shepherd, et al., 2020) with several applications (Kaur & Kander, 2023), is expected to increase at a rate of 17.1% from 2023 to 2030, with a value of USD 16.75 billion (Grand View Research, 2023). Since its legalization in the 2014 and 2018 U.S. Farm Bills, interest in growing and utilizing industrial hemp has been expanding. Different varieties of hemp are cultivated for CBD (cannabidiol) oil, grain, or fiber, while some varieties can produce both fiber and grain. CBD oil is the highest-value product produced from the hemp flower and is commonly used for treating physical as well as mental illnesses (USDA NASS, 2023). In 2022, 3082 megagrams (Mg) of floral hemp was produced in the United States, with an estimated value of USD 179 million (USDA NASS, 2023). However, the CBD hemp market has been saturated due to high producer participation (USDA NASS, 2023). Production of multiple varieties of hemp needs to be increased for different uses.

Hemp is a temperate crop that can be grown for fiber and grain in many U.S. states (Honig, 2022). In 2022, hemp grain production was highest in Midwestern states [1383 hectares (ha)], followed by Northwestern states (396 ha) (USDA NASS, 2023). Hemp fiber production was also most concentrated in the Midwest, mainly Missouri (526 ha) and South Dakota (324 ha), followed by Montana (255 ha), Virginia (194 ha), North Carolina (170 ha), Kentucky (73 ha), and Oregon (40 ha) (USDA NASS, 2023). In 2022, the total hemp grain production was 1104 Mg, worth USD 3.6 million, while hemp fiber production was 9545 Mg, worth USD 28.3 million (USDA NASS, 2023). Due to the market saturation of hemp grown for CBD, interest has increased for growing hemp for grain and fiber, in rotation with other major grains such as corn, soybean, and other oilseed crops. Hemp grain and fiber have high-value applications in food and textile industries (Ruscitto, 2023). Hemp grain is sold as a dietary supplement, due to its nutritional benefits (Cerino, et al., 2021). Similarly, hemp fiber has several applications, including construction and building materials, textiles, and paper (Musio, et al., 2018; Ramesh, et al., 2022). In addition, to encourage more producers to grow hemp for grain and fiber, new federal laws are being written that reduce the THC content restrictions for grain and fiber hemp varieties (Derrick, 2023).

Current research on hemp is focused on establishing agronomy for hemp production methods and other best management practices for the harvest and storage of different hemp varieties (Alberta Agriculture and Rural Development, 2020; Wortmann & Dweikat, 2020; Buetow, et al., 2020; Darby, et al., 2019; Schluttenhofer, 2020). These practices include determining optimal growing degree day requirements, field preparation, seeding rates, row spacing, nutrient requirements, harvest timing, and potential yield (Wortmann, et al., 2020; Buetow, et al., 2020; Darby, et al., 2019; Schluttenhofer, 2020; Bennett, 2024; Harper, et al., 2018; Roseberg, et al., 2019). These studies have found that early-maturing varieties are better for fiber production while late-maturing varieties are better for seed production (Harper, et al., 2018; Roseberg, et al., 2019). However, grain loss due to seed shatter is a major concern for grain production, thus the optimal harvest timing is at a seed maturity of ~70% and a grain moisture between 22% and 30% (Wortman & Dweikat, 2020; Buetow, et al., 2020; Darby, et al., 2019; Schluttenhofer, 2020; Bennett, 2024; Harper, et al., 2018). In addition, research on herbicides and pesticides for hemp is ongoing.

A few studies have evaluated the economic viability of hemp production. One study considered intercropping fiber hemp with loblolly pine for 6 years during its establishment in the Southwestern United States. It estimated that such a system could produce 25% higher overall returns for the farm compared to monocropping of loblolly pine (Barnes, 2023). Another study in the Czech Republic evaluated the economics of using the residual biomass from CBD hemp production for energy or biochar and found that the cost of biochar or direct use of hemp biomass for energy would be less than other biomass grown solely for bioenergy (Vávrová, et al., 2022). However, this study allocated the cost of field production completely to the flowers, and only considered the costs associated with collecting and processing the residual biomass. One study, which evaluated the economic viability of industrial hemp production in Turkey, estimated the hemp stalk production costs for hemp fiber alone and a dual purpose (fiber and grain) at USD 0.29 kg−1 and USD 0.41 kg−1, respectively (Ceyhan, et al., 2022).

These economic analyses have mostly been conducted using linear programming, directly using costs and prices from the literature. However, a comprehensive systems analysis using process modeling has not been conducted for the Midwestern United States, where hemp grain and fiber production is increasing (USDA NASS, 2023). Thus, the main objective of this study is to determine the technical feasibility and costs of hemp grain and fiber production, harvest and post-harvest logistics, and processing for the Midwestern United States. This study incorporates current agronomic and best management practices and state-of-the-art technology for harvest and post-harvest logistics and processing.

Materials and Methods

System Definition

Graphic showing the elements needed for hemp grain and fiber production, including combining, transport, drying and storage for grain; and cutting, baling, collection and transport, and decortication and storage for fiber/stalk production.The system considered for the analysis consisted of all processes required for the field production, harvest, post-harvest collection, and handling of hemp grain and stalks; the drying and storage of hemp grain; and the storage and decortication of hemp stalks (Figure 1). The functional unit for the analysis was considered to be 1 Mg of hemp fiber and grain produced. For field production, seeding and fertilization were considered and it was assumed that pesticide application and irrigation were not necessary (Visković, et al., 2023). The farm size used for both hemp grain and fiber production scenarios was 162 ha because the average farm size in the United States has been in the range of 177–180 ha since 2014 (USDA NASS, 2022a). While this size is bigger than 49 ha, which was the average size of actual hemp farms in the United States in 2019 (HempIndustry Daily, 2019), most of these farms produced high-value hemp varieties for CBD. Thus, for this model, which considered grain and fiber production that has a lower economic value than hemp flowers, the 10-year average U.S. farm size was used.

Discrete Production Processes

Field Production

For the field production of hemp grain and fiber, direct seeding was considered and seeding rates are provided in Table 1. Nitrogen, phosphorus, and potassium fertilizer applications for both hemp grain and fiber stalks were based on recommendations from the literature.

Table 1. Agronomic parameters considered for analysis.*

Parameters

Unit

Grain

Fiber

Seeding

Optimal planting density

plants ha−1

1,347,385 (1,075,932–1,613,898) (Purdue University, 2023)

3,496,779 (3,227,796–3,765,762) (Roseberg, 2019)

Germination rate

%

45% (10%–80%) (Buetow, et al., 2020)

83% (70%–91%) (Suchoff & Inoa, 2022)

Hemp seeds weight

g 1000 kernels−1

20 (18–22) (Wortmann & Dweikat, 2020)

20 (18–22) (Wortmann & Dweikat, 2020)

Fertilizer

Nitrogen

kg ha−1

157 (64–168) (Darby, et al., 2019; Harper, et al., 2018; Anderson, 2018)

168 (112–225) (Darby, et al., 2019; Harper, et al., 2018)

Phosphorus

kg ha−1

38 (15–64) (Darby, et al., 2019; Harper, et al., 2018; Anderson, 2018)

45 (22–90) (Darby, et al., 2019; Harper, et al., 2018)

Potassium

kg ha−1

43 (19–64) (Darby, et al., 2019; Harper, et al., 2018; Anderson, 2018)

84 (22–225) (Darby, et al., 2019; Harper, et al., 2018)

Yield

kg ha−1

339 (285–393) (Honig, 2022)

2620 (2140–4773) (Honig, 2022; Minnesota Department of Agriculture, 2020; Minnesota Department of Agriculture, 2019)

* The values represent the triangular distribution of the parameters with the average, minimum, and maximum values in parenthesis.


Seeding
Seeding was considered to be completed using a 4.5 m drill planter for both grain and fiber hemp. The inter-row spacing for grain hemp was considered to be 0.4 m (Purdue University, 2023), and for fiber hemp it was considered to be 0.3 m (Wortmann & Dweikat, 2020), based on agronomic practices. Due to the larger inter-row spacing for grain hemp, the planting density was lower per acre than the planting density for fiber hemp (Table 1). The seeding rate was estimated using the optimal planting density, germination rate, and 1000 kernel weight of hemp seeds (Table 1). The field productivity of the seeding equipment was estimated using the seeding width, speed, and field efficiency (Table 2). The field efficiency used was based on literature values and is similar to the ASABE standard (ASAE, 2000), which is widely used for making machinery management decisions for farm operations in the United States. Since field conditions vary greatly due to variations in topography, it is important to use a more generic field efficiency that can be applicable to a wider geographic region as the same equipment will function differently on different fields. This was considered for all operations and is not specific to the seeding operation.

Table 2. Equipment parameters used for the different operations considered for the analysis.

Equipment Parameters

Unit

Values *

Assumption #

Seeding

Speed

km h−1

9.6 (6.4–12.8) (John Deere, 2023a)

Rated speed

Field efficiency

%

70%

Based on literature (Hanna, 2016)

Power

kW

75 (TractorHouse, 2023g)

Rated power

Fertilization

Speed

km h−1

9.6

Based on literature (Hanna, 2016)

Field efficiency

%

70%

Based on literature (Hanna, 2016)

Power

kW

30 (Frontier Equipment, n.d.)

Rated power

Harvest and post-harvest

Grain harvest

 

 

 

Combine speed

km h−1

6.4 (4.8–8.0) (Almaco Specialized Plot Combine, 2025)

Rated speed

Combine field efficiency

%

77% (75%–78%)

Based on literature (Hanna, 2016)

Combine power

kW

68.25 (Almaco Specialized Plot Combine, 2025)

Rated power

Grain cart storage capacity

m3

26.4 (John Deere, 2023b)

Rated capacity

Grain cart tractor power

kW

112.5 (John Deere, 2023b)

Rated power

Grain cart unload speed

m3 s−1

0.29 (John Deere, 2023b)

Rated capacity

Fiber harvest

 

 

 

Mower width

m

2.1 (John Deere, 2023c)

Rated width

Mowing speed

km h−1

11.2

Based on literature (Hanna, 2016)

Mower field efficiency

%

80% (78%–83%)

Based on literature (Hanna, 2016)

Windrower width

m

2.7 (Pottinger, 2023; Kubota, 2023)

Rated width

Windrowing speed

km h−1

6.4 (4.8–8.0)

Based on literature (Hanna, 2016)

Windrowing field efficiency

%

79% (78%–80%)

Based on literature (Hanna, 2016)

Baling width

m

2.7 (TractorHouse, 2023d)

Rated width

Baling speed

km h−1

4.8 (3.2–6.4)

Based on usual practice (HayTalk, 2013)

Baling field efficiency

%

80% (70%–90%)

Based on literature (Hanna, 2016)

Bale handling capacity

no. load−1

12 (Anderson, n.d.; Highline, 2023)

Rated load capacity

Bale handler transport speed

km h−1

9.6 (8.0–11.2) (Highline, 2023)

Rated speed

* Multiple values for the same parameter represent its triangular distribution with the average, minimum, and maximum values in parenthesis.

# For speed and field efficiency of different operations, values were either obtained from the literature or based on the specification of the equipment used in this analysis.


Fertilization

Dry fertilizers were considered for both grain and fiber hemp production at the recommended rates (Table 1). Urea was used as the source for nitrogen, di-ammonium phosphate (DAP) for phosphorus, and potassium chloride for potassium. Fertilization was considered to be applied using a dry fertilizer spreader with a 0.45 Mg capacity and spreading width of 1.2 m. The productivity of the fertilizer spreader was estimated based on field speed, field efficiency, spreading width, and fertilizer holding capacity (Table 2).

Harvest and Post-Harvest Logistics

Grain harvest and transport

Combining was considered for harvesting hemp grain, as it is the most common grain harvesting method in the United States. Due to the small size of the farm, a two-row plot combine (1.7 m), with a storage capacity of 1.4 m3 and an unloading rate of 58 kg s−1, was considered for harvesting the hemp grain. The productivity of the combine was calculated based on the field speed, working width, and field efficiency. A small grain cart, with a 26.4 m3 storage capacity, was considered for collecting and transporting the hemp grain from the field to the field edge for drying and storage. The speed of the grain cart was considered to be 6.4 km h−1 for collection and transportation. For the transportation distance, the farm was considered to be circular, with the radius used as the transport distance.

Fiber harvest

Hemp stalk harvesting for fiber was considered to be achieved using a multi-pass system consisting of mowing, windrowing, baling, and collecting and stacking bales at the field edge. Mowing was considered to be performed at a hemp moisture content of 30% for field retting (Nelson, 2000), in which hemp is left in the field until the stalk dries to a moisture content of 15% (Brook, et al., n.d.). It was assumed that the hemp fiber yield was 20%–30% of the hemp stalk (National Hemp Growers Association, 2024). Thus, the amount of material to be mowed, windrowed, and baled was estimated based on the total hemp stalk yield. Windrowing was considered to be performed after the hemp had field retted for two weeks (Brook, et al., n.d.).

Baling was considered to be performed after windrowing using a large rectangular baler. The number of bales to be formed was estimated based on the hemp stalk yield. The wet bulk density of the bales was considered to be in the range of 176–224 kg m3−1 based on the bulk density achieved for other biomass bales, and the bale dimensions used were 0.9 m × 1.2 m × 2.4 m. Bale collection and stacking at the field edge were considered to be performed using a bale handler that can collect and transport 12 bales per trip. For the transportation distance between the field edge and the bales, the farm was considered to be circular, with its radius used as the average transport distance.

Storage and processing

Grain

Grain was considered to be stored in a silo at the farm. Since grain was to be harvested at 15% average moisture content (12%–20% range) (Brook, et al., n.d.) and safe grain storage was at 8% (Brook, et al., n.d.), grain drying prior to storage was necessary. The energy required for grain drying was estimated to be 34–56 MJ Mg−1 of grain and was based on the amount of water that needed to be removed to reach 8% moisture. It was assumed that hemp grain drying and storage would be performed using existing systems used for other grains such as corn and soybean.

Fiber

Hemp stalks require decortication to separate the outer bast fiber from the inner hurd. Decortication and baling of the hemp fibers was considered for the processing of hemp stalks. Processing of hemp fibers was considered to be performed on farm; thus, a small scale decortication system was considered for the analysis (Hubbard, 2020). This system also included conveying, cleaning, and sorting of the bast fiber and hurd post-decortication. The decorticating capacity of the system was 454 kg h−1 and its power requirement was 7.5 kW based on a similarly sized decorticating unit (Made in China, n.d.1). To facilitate the post-process handling and transportation of hemp fiber bales, a stationary compacting unit with a productivity of 4–6 bales h−1 was considered (Made in China, n.d.2). The bales were considered to be 80–120 kg by weight and their dimensions were 0.8 m × 0.4 m × 0.8 m (Made in China, n.d.2). The power requirement of the unit was 4 kW (Made in China, n.d.2). The operating hour requirements of the processing plant were estimated based on the productivity of the processing equipment, which were also used to estimate the total power and labor hour requirements.

Economic Considerations

Consumables and labor

The major cost inputs required for this study, excluding the capital cost of equipment, were the land rental cost; the price of consumables including seeds, fertilizers, and fuel; and the farm labor wages (Table 3). License fees for growers and processors were not included because this fee would be negligible over time for the farm size and the service life considered in the analysis (Cannabis Business Times, 2021). For grain, on-farm drying and storage costs were also considered (Ward, et al., 2022) and were assumed to be the same as current commercial grain drying and storage costs (Table 3). The labor requirement for the field operations were estimated to be 1.2 times the actual machinery hours in the field (American Agricultural Economics Association, 2000). Fuel use for the different operations was estimated using the rated power required for the operation (Table 2) and a specific fuel consumption coefficient of 0.015 l kW-h−1 (0.044 gal hp-h−1) (Grisso, 2020), as well as the total hours used every year.

Table 3. Price of fertilizers, fuel, and other inputs to the model.

Parameters

Units

Values *

Land rental cost

USD ha−1

563 (452–674)(Ward, 2022)

Urea ammonium nitrate (UAN) **

USD Mg−1

658 (599–732) (Quinn, 2023)

Diammonium phosphate (DAP) **

USD Mg−1

835 (818–868) (Quinn, 2023)

Potash **

USD Mg−1

672 (623–742) (Quinn, 2023)

Diesel price ***

USD l−1

1.07 (1.00–1.16) (US EIA, 2023)

Hourly wage for field workers ****

USD h−1

17.77 (17.64–17.89) (USDA NASS, 2022b)

Grain drying costs

USD Mg−1

0.15 (0.10–0.21) (Ward, et al., 2022)

Grain storage costs

USD Mg−1

10.91 (5.91–15.91) (Ward, et al., 2022)

Hourly wage for production workers

USD h−1

17.06 (13.23–27.01) (U.S. Bureau of Labor Statistics, 2022)

Hemp grain selling price

USD kg−1

3.32 (1.45–12.25) (Honig, 2022)

Hemp fiber selling price

USD kg−1

3.30 (2.64–3.96) (Honig, 2022)

* Values for each parameter represent the triangular distribution with the average, minimum, and maximum values in parenthesis.

** Nitrogen, phosphorus, and potassium fertilizers prices were from late 2022 to early 2023.

*** Average diesel price was from 2023.

**** Labor wages from 2022 were used for field workers with 30% benefits.


Equipment

The costs of the different pieces of equipment were obtained from the manufacturers’ websites (Table 4). The actual purchase price of the equipment was assumed to be 85% of the list price (American Agricultural Economics Association, 2000). The annualized cost, salvage value, and repair and maintenance of equipment were estimated using equations from ASABE standards (ASABE, 2011; ASABE, 2006) and factors listed in Table 4 (ASABE, 2006). In addition, other relevant costs, including taxes, housing, insurance rates, and lubrication, were based on the annualized equipment cost and are summarized in Table 4.

Table 4. Purchase price of field equipment and factors for estimating annual fixed costs.

Parameters

Units

Values *

Factors applicable to all equipment

Interest rate **

%

9.5 (9.0–10.0) (USDA Farm Service Agency, 2023); Coinnews Media Group, 2023)

Taxes, housing and insurance rate

%

2% (ASABE, 2006)

Lubrication cost as percent of fuel cost

%

15% (ASABE, 2006)

Tractor

Tractor list price (131.25 kW)

USD

219,654 (183,800–269,161) (TractorHouse, 2023h); TractorHouse, 2023i); TractorHouse, 2023c)

C1, C2, C3 ***

 

0.976, 0.119, 0.0019

Service life

hours

16,000

RF1, RF2 ***

 

0.003, 2

Grain drill

Grain drill list price (75 kW)

USD

51,100 (37,500–69,900) (TractorHouse, 2023e; TractorHouse, 2023f; TractorHouse, 2023o)

C1, C2

 

0.943, 0.111

Service life

hours

5000

RF1, RF2

 

0.41, 1.3

Fertilizer spreader

Fertilizer spreader list price (30 kW)

USD

3599 (2879–4319) (TractorHouse, 2023n)

C1, C2

 

0.943, 0.111

Service life

hours

1000

RF1, RF2

 

0.41, 1.3

Combine

Combine list price (68.25 kW)

USD

550,000 (440,000–660,000)

C1, C2, C3

 

1.132, 0.165, 0.0079

Service life

hours

5000

RF1, RF2

 

0.12, 2.3

Grain cart

Grain cart list price (112.5 kW)

USD

61,900 (49,520–74,280) (TractorHouse, 2023b)

C1, C2

 

0.943, 0.111

Service life

hours

5000

RF1, RF2

 

0.41, 1.3

Mower

Mower list price (28.12 kW)

USD

7178 (5742–8613) (John Deere, 2023c)

C1, C2

 

0.756, 0.067

Service life

hours

5000

RF1, RF2

 

0.44, 2

Windrower

Windrower list price (54.37 kW)

USD

35,875 (34,850–36,900) (TractorHouse, 2023j; TractorHouse, 2023m)

C1, C2

 

0.791, 0.091

Service life

hours

5000

RF1, RF2

 

0.03, 2

Baler

Baler list price (131.25 kW)

USD

192,998 (169,900–253,900) (TractorHouse, 2023l; TractorHouse, 2023k; TractorHouse, 2023j; TractorHouse, 2023c)

C1, C2

 

0.852, 0.101

Service life

hours

3000

RF1, RF2

 

0.1, 1.8

Bale loader

Baler loader list price (112.5 kW)

USD

173,500 (138,800–208,200) (TractorHouse, 2023a)

C1, C2, C3

 

0.943, 0.111

Service life

hours

5000

RF1, RF2

 

0.41, 1.3

* Equipment list prices were obtained from different manufacturers’ websites and represent the triangular distribution with the average, minimum, and maximum values in parenthesis.

** The interest rate used accounted for the current interest on farm loans and the average inflation rate for 2023. It is represented as a triangular distribution with the minimum and maximum values in parenthesis.

*** Salvage value coefficients (C1, C2, C3) and repairs and maintenance coefficients (RF1, RF2) were obtained from the ASABE standard(ASABE, 2006).


Processing

Processing costs for hemp fiber stalks were estimated based on the purchase price of the equipment and the factors for building the processing facility based on the equipment price, as provided in Table 5. The annual facility-dependent cost was estimated based on the service life of the plant and the interest rate.

Table 5. Processing equipment purchase price and facility cost factors.

Parameters

Units

Values*

Equipment purchase price

Decorticator assembly

USD

229,000 (Hubbard, 2020)

Stationary fiber compactor

USD

10,000 (Made in China, n.d.2)

Factors for estimating facility cost *

Interest rate **

%

9.5 (9.0–10.0) (USDA Farm Service Agency, 2023; US Inflation Calculator, 2025)

Direct cost (DC)

Total Equipment purchase cost (TP)

 

239,000

Instrumentation as % of TP

%

15

Electrical as % of TP

%

5

Buildings as % of TP

%

10

Yard improvement as % of TP

%

5

Indirect cost (IDC)

Engineering as % of DC

%

10

Construction as % of DC

%

10

Miscellaneous cost (MC)

Contractor’s fee as % of DC + IDC

%

5

Contingency as % of DC + IDC

%

5

Direct Fixed Capital (DFC)

 

DC + IDC + MC

Repair and maintenance as % of DFC

%

3

Taxes and insurance as % of DFC

%

1

Salvage value as % of DFC

%

11

Service life of the plant

years

30

* The factors required to estimate the cost of processing facility were based on the factors in the SuperPro Designer process modelling software(Intelligent Inc. SuperPro Designer, 1991). Due to the less complicated nature of the processing facility, the factors associated with direct fixed capital were reduced by at least 50% for each category. Taxes and insurance were kept the same.

** The interest rate used accounted for the current interest on farm loans and the average inflation rate for 2023. It is represented as triangular distribution with average, minimum, and maximum values in parenthesis.


Uncertainty and Sensitivity Analyses

The input parameters were used as distribution functions due to the uncertainty associated with them. The distributions considered were mostly triangular due to limited data availability. Monte Carlo simulations (10,000 iterations) were performed to obtain the distribution of the outcomes and are reported as interquartile (IQR) ranges. In addition, sensitivity analysis was conducted to identify the most influential parameters that affect the outcomes of the analysis.

Results and Discussion

Feedstock Production and Fertilizer Requirement

The grain and fiber produced from the 162 ha farm had an IQR of 128–141 and 487–647 tons per year (t/year), respectively. Hemp grain yields were lower than hemp fiber yields. However, hemp grain is considered a superfood and could be used for higher-value applications than processed hemp fiber, which could make hemp grain more attractive for farmers. With the implementation of the best management practices, hemp grain and fiber yields are likely to increase in the future.

Hemp grain required 206–284 kg Mg−1 of urea for nitrogen, 57–109 kg Mg−1 of DAP for phosphorus, and 49–85 kg Mg−1 of potash for potassium. For hemp fiber, 62–87 kg Mg−1 of urea, 22–34 kg Mg−1 of DAP, and 30–55 kg Mg−1 of potash were required. For comparison, the fertilizer requirement for hemp production is higher than that of the major row crops in the United States [corn: 60 kg Mg−1 of urea, 12 kg Mg−1 of DAP and 28 kg Mg−1 of potash (Mosaic, 2023); soybean: 14 kg Mg−1 of DAP and 23 kg Mg−1 of potash (Jardine, 2020)] due to the lower hemp grain and fiber yields (Mg ha−1).

Machinery, Fuel, and Labor Requirements for Field Operations

For the modeled 162 ha farm size, for both hemp grain and fiber production, one of each piece of equipment for different operations was enough to fulfill the machinery needs. However, for smaller farms with approximately 49 ha (Purdue University, 2023), which is the current median hemp farm size in the United States, it would not be economically viable for a farmer to own all the equipment; thus, hiring custom operators would be best option.

Machinery hour, fuel, and labor requirements are summarized in Table 6. Machinery hour requirements for the seeding of grain and fiber hemp were similar, as the productivity of the grain drill was assumed to be the same. The slightly higher number of hours required for fiber hemp is due to the higher number of trips required for refilling the grain drill during planting as the seeding rate for fiber is higher. A similar trend was observed for fertilization because of the higher fertilizer requirements for fiber hemp per hectare.

Combine harvesting was considered for grain while mowing, windrowing, and baling were considered for fiber stalk harvesting. The number of grain harvesting, collection, and transportation hours was high because a small plot combine was considered for harvesting grain hemp, while the grain cart would transport the grain to the field edge for storage. Due to the small width of the plot combine, the number of harvesting hours was high. If a large combine was considered, the field productivity of the combine would be much higher than the plot combine considered here. However, since the scale of operation considered in this analysis was small, a plot combine was considered to be suitable. Fiber harvest hours were also high compared to other field operations because of the multiple operations required, including mowing, windrowing, and baling, which increased the total number of harvesting hours. The collection and transportation of the hemp stalk bales were considered to be performed using an efficient bale collector and stacker, and

Table 6. Machinery hours, fuel (diesel) and labor hour requirements for hemp grain and fiber production, harvesting and post-harvest logistics.*

Machinery Hours (h year−1)

Grain

Fiber

Tractor—seeding

68 (60–74)

68 (61–74)

Tractor—fertilization

117 (115–120)

129 (126–132)

Combine—grain harvest

198 (183–212)

 

Tractor—stalk harvest

 

241 (227–253)

Tractor—collection and transport

207 (192–221)

63 (52–71)

Total machinery hours

590 (559–618)

500 (482–517)

Fuel (Diesel) (l year−1)

Grain

Fiber

Seeding

1128 (1007–1227)

1131 (1010–1231)

Fertilization

783 (768–798)

859 (838–881)

Harvest

3009 (2772–3214)

4490 (4115–4807)

Collection and transport

5184 (4791–5526)

1591 (1328–1809)

Labor Hours (h year−1)

Grain

Fiber

Seeding

81 (72–88)

81 (73–89)

Fertilization

141 (138–144)

155 (151–158)

Harvest

238 (219–254)

289 (273–304)

Collection and transport

249 (230–265)

75 (63–86)

* Values reported as the average and IQR in parenthesis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Hemp Fiber Stalk Processing Resource Requirements

Hemp stalk processing requirements were estimated in terms of energy, labor, and equipment requirements. One decorticator (454 kg h−1) and one stationary baling unit (4–6 bales h−1) with the rated processing capacities would be sufficient to process the amount of hemp stalks produced from the 162 ha farm considered in this analysis. The total number of equipment hours required for processing was estimated to be in the IQR of 1084–1437 h year−1, which is equivalent to 3.6–4.8 months per year, with the decorticator and stationary baling unit working simultaneously. This type of facility would be similar to cotton gins in the United States, which typically operate for 1–2 months of the year, and remain idle for the rest of the year (Wakelyn, et al., 2005). Having an on-farm processing unit to process the hemp stalk could provide employment for farm workers beyond the harvest period, which would be beneficial for the rural economy. It was assumed that one full-time worker would be able to complete the processing tasks, as the decorticator and stationary baling units considered are fully automated. The worker would be required to monitor the processing equipment and move the materials. All processing was considered to be performed using electricity and the energy requirements for hemp stalk processing for the farm size considered were estimated to be in the IQR of 12,075–16,010 kWh year−1.

Hemp Grain and Fiber Production Cost

The total cost of hemp grain production, harvesting, post-harvest logistics, and drying and storage was estimated to be in the IQR of USD 2913–3573 Mg−1 (Figure 2a). The total cost of hemp fiber production, harvest, post-harvest logistics, and processing was estimated to be in the IQR of USD 1155–1505 Mg−1 (Figure 2b). Hemp-fiber production and processing costs were lower than grain costs because of the lower fertilizer requirements and higher fiber yields. For grain hemp, the cost of consumables, i.e., seeds and fertilizers, contributed 50% of the total production cost, followed by equipment (23%), land rental (21%), labor (4%), and fuel (2%). Similarly, for fiber hemp, the cost of consumables, i.e., seeds and fertilizers, contributed 59% of the total production cost, followed by equipment (20%), land rental (12%), labor (7%), and fuel/energy (1%). The cost of the seeds contributed 94% and 95% of the total seeding cost for grain and fiber hemp, respectively, due to the current low hemp seed production, as the crop is in its infancy. With the increase in hemp seed production and price stabilization, it is likely that the cost of hemp seeds will be reduced, thus reducing the overall cost of production. Fertilization operations followed a similar trend as fertilizer prices have increased drastically since 2020 (Schnitkey, et al., 2022a) due to rising inflation, and the higher fertilizer requirements for hemp grain and fiber that produces lower yields compared to conventional crops such as corn (14 Mg ha−1) and soybean (4.7 Mg ha−1).Two bar graphs aligned vertically, with the top graph showing costs for hemp grain production, and the bottom graph showing costs for hemp fiber production.

For harvest and post-harvest logistics, equipment cost was the highest contributor for both grain and fiber hemp. This was due to the use of capital-intensive farm equipment, which has high productivity but is fully automated with low labor requirements. For grain hemp, the harvest cost alone contributed to 16% of the total cost due to the high cost of the combine. For fiber hemp, harvest and post-harvest logistics had a lower contribution of 11% because of the use of existing equipment, which is less expensive and efficient for biomass cutting and baling.

The contribution of grain-hemp drying and storage to the total cost was low because grain drying and storage are already commercially available. It was assumed that the cost of grain-hemp drying and storage would be same as that for commercial facilities. For fiber-hemp processing, facility-related costs contributed 63% of the total cost, followed by labor (36%) and energy (1%). The contribution of facilities and labor was significant because of the small size of the processing plant and the high cost of the processing equipment. As hemp-stalk processing equipment is in its infancy, only a few companies manufacture the processing equipment, and the related costs are high. Because the amount of material for a 162 ha farm requires only 3.6–4.8 months for processing, the excess equipment capacity would allow the processing of additional material in a facility of this size. Thus, if more material is processed, the facility and labor needs will not increase in the same proportion due to economy of scale, which can help reduce the total processing costs. However, collecting more material will result in a larger collection radius around the processing plant, increasing the transport distance between the field and the plant, which can increase the post-harvest logistics cost.

Income from Hemp Grain and Fiber

Based on the current market prices of hemp grain and fiber, the average net income for a 162 ha farm was estimated to be USD 325,212 year−1 (IQR: USD 62,671–551,136 year−1) for hemp grain and USD 1,162,115 year−1 (IQR: USD 874,421–1,412,350 year−1) for hemp fiber, respectively. For the same farm size, corn and soybean would have generated a net income of USD 53,200–200,000 year−1 and USD 46,400–128,400 year−1, respectively, considering high corn and soybean yields of 14 and 4.7 Mg ha−1 and higher-than-average prices of USD 262 Mg−1 and USD 530 Mg−1, respectively (Schnitkey, et al., 2022b). The higher estimated income for hemp grain is due to its market price (USD 3.32 kg−1) (Honig, 2022), which is 13 and 6 times higher than that of corn (USD 0.26 kg−1) (Schnitkey, et al., 2022b) and soybean (USD 0.52 kg−1), respectively (Schnitkey, et al., 2022b). Similarly, the price of hemp fiber (USD 3.3 kg−1) (Honig, 2022) is two times higher than other natural fibers such as cotton (USD 1.87 kg−1) (USDA, 2023).

Despite the potential to produce a higher income for the farmers, the resource (seed, fertilizer) requirements for the production of hemp grain and fiber are high compared to existing crops because hemp is new to farmers in the United States. Due to the newness of hemp products and markets, prices are volatile, thus there is risk that the income generated could be lower. Similar to the decrease in CBD biomass prices over the last few years (Moreno, 2020), it is likely that hemp grain and fiber prices will decrease as their production increases. Thus, the results from this analysis would be applicable for the current state of technology and for the current costs and prices, which are likely to change in the future as hemp markets develop, and thus market volatility is the main limitation of this study. In addition, the environmental impacts of hemp grain and fiber production and processing need to be evaluated and compared to existing ones. However, this study can provide information to farmers and processors who are interested in producing hemp but are hesitant due to unknown associated costs.

Sensitivity Analysis

Two bar graphs aligned vertically with the top graph showing potential net income from hemp grain production, while the bottom graph shows the potential net income of hemp fiber production.Sensitivity analysis was conducted to identify the parameters that were most influential on the net income. The price of hemp grain and fiber were the most influential parameters because of the high variability in their price due to the volatile market (Figure 3). Other influential parameters were associated with seeding and fertilization, including the germination rate, plant population, and fertilizer application rate, which were among the highest contributors to the production cost, which would negatively influence the net income. In addition, hemp grain and fiber yields also had a high influence on the net income, as the yield can directly increase/decrease the net income. For grain hemp, land rental cost was also one of the most influential parameters as it was more than 20% of the cost. Farmers and processors, as well as other researchers, can use this sensitivity analysis as a starting point to identify the major hotspots within their current system. This will provide direction for future research as the system needs to be optimized for the field production of both grain and fiber hemp and the processing of the fiber stalks.

Conclusions

The techno-economics of hemp grain and fiber production and processing for an average U.S. farm size of 162 ha was evaluated. The total cost of hemp grain and fiber production, harvest, post-harvest logistics, and processing was estimated to be USD 2913–3573 Mg−1 and USD 1155–1505 Mg−1, respectively. Seed and fertilizer costs were the largest contributor to the field production cost, while facility and labor costs were the highest contributors to processing costs. This analysis showed that hemp grain and fiber had high resource requirements but, with the current state of technology, could produce higher net income compared to conventional crops. However, due to the high price fluctuations, hemp production for grain and fiber also showed risks when considering low market prices. In conclusion, under current conditions, hemp grain and fiber can provide U.S. farmers with a viable alternative crop that can be grown in rotation with existing crops such as corn, soybean and cotton.

Additional Resources

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This fact sheet was originally published March 1, 2024 by Biomass, 4(1), 164–179.

Originally posted Dec 11, 2025.
Ohioline https://ohioline.osu.edu