Economics of Producing Industrial Hemp in NYS: …...Industrial Hemp Production udgets, New York,...

For a detailed reporting of this work please see the teamrsquos website nwnyteamccecornelledu click ldquoBusinessrdquo click ldquoEconomic Analysisrdquo Also see Cornell Universityrsquos website focusing on in-dustrial hemp production in New York httpshempcalscornelledu Industrial Hemp Production Budgets New York 2019 To make decisions regarding industrial hemprsquos place in their cropping systems farm business owners can use information from 2019 industrial hemp budgets (Table 1) Please note that budgets are projections esti-mates of expected future revenues costs and returns Presently considerable uncertainty characterizes projected values of production and revenues Farm business owners may not ob-tain projected prices and quantities due to un-certainties in evolving markets for industrial hemp end uses Farm business owners should thoroughly investigate markets for their poten-tial to sustain favorable economic performance at the farm level by working closely with poten-tial buyers to best understand expected prices quantities and marketing costs Marketing con-siderations suggest that industrial hemp enter-prises perhaps require relatively greater man-agement input versus other crops

AG FOCUS MARCH 2 019

Economics of Producing Industrial Hemp in NYS

Projected Costs and Returns 2019 Budgets by John Hanchar

Page 6

Notes

Reported totals may not equal the sum of individual items due to rounding

Expected value of hemp fiber production $010 per pound expected value of hemp seed (grain) production $110 per pound

Expected yield hemp fiber production fiber production and harvest only scenario 397 tons per acre expected yield hemp fiber production dual purpose fiber and seed (grain) production and harvest scenario 124 tons per acre expected yield hemp seed (grain) production 1000 pounds per acre

Revenues costs and returns reflect expected 2019 price levels

Fertilizers amp Lime costs reflect Cornell University agron-

omistsrsquo recommendations regarding N and Purdue University regarding phosphorus and potash

Seeds amp Plants costs vary by scenario with respect to

seeding rates but are constant with respect to seed price per pound

Sprays amp Other Crop Inputs include crop professional fees machinery hire rent amp lease and others Estimates reflect no spray inputs since no pesticides are

registered for use on industrial hemp in the United States

Labor costs reflect labor from hired and or family andor owneroperator sources

Machinery related variable and fixed costs per Lazarus 2018 ltzumnedumachdatagt

This analysis excludes a charge for management inputs

Questions Comments Contact John Hanchar jjh6cornelledu

Budget Item Hemp Fiber Production amp Harvest

Hemp Seed (Grain) Production amp Harvest

Hemp Fiber amp Seed (Grain) Production amp Harvest

--- $ per Acre ---

Value of Production

Fiber 79400 24800

Seed (Grain) 111000 111000

Total Value 79400 111000 135800

Costs of Production

Variable Inputs

Fertilizers amp Lime 8160 8160 8160

Seeds amp Plants 20943 10472 4848

Sprays amp Other Crop Inputs

1767 6235 3961

Labor 3741 1523 4605

Repair amp Maintenance

Tractors 360 1873 2066

Equipment 1363 1324 2335

Fuel amp Lube 1717 1741 2876

Interest on Operating Capital

951 783 721

Variable Costs Total 39004 32112 29572

Fixed Inputs

Tractors 2316 4018 5284

Equipment 3067 2240 4088

Land Charge 10188 10188 10188

Value of Operator amp Fam-ily Management

Fixed Costs Total 15571 16446 19559

Total Costs 54574 48558 49131

Returns

Return above Variable Costs

40396 78888 106228

Return above Total Costs 24826 62442 86669

Table 1 Projected values of production costs and returns by industrial hemp production scenario

dollars per acre conventional tillage system New York 2019 budgets