Compared to previous years, the upcoming hemp harvest isn’t going to be much of chore at Ken Iverson’s family farm near Woodburn, Ore.

With only 2 acres in production, Iverson expects to reap less than 1% of the amount he did just three years ago, at the peak of Oregon’s hemp boom.

Farmers don’t have much incentive to grow hemp flower, since the biomass market remains saturated, he said.

“It’s really not economically feasible to do that right now,” Iverson said.

About 3,250 acres of hemp were licensed for planting across the state in 2022, down 95% from 64,000 acres in 2019 — the year unprecedented growth cratered prices for biomass.

“Show a farmer a profit, and he’ll show you a surplus,” Iverson said, repeating an agricultural truism whose accuracy has been proven time and again.

While Iverson and other farmers have sharply reduced their hemp acreage, many have renounced it altogether. Only 1 in 7 Oregon farmers who planted hemp in 2019 still grow it today.

“I’m not 100% sure where we’re going to stabilize as a crop,” Iverson said.

Oregon was a prominent forerunner in the hemp industry, with the state’s Department of Agriculture licensing the crop’s production since 2015, or three years before it was nationally legalized.

Farmers in the state have more recently led the way in curtailing production, which they’ve done at a faster clip than the U.S. as a whole.

Hemp production remained steady nationwide at about 500,000 acres in 2020 despite the glut generated in 2019, when 520,000 acres were grown, according to Beau Whitney, an economist who tracks the industry. To compare, Oregon’s hemp acreage plunged by more than half in 2020.

U.S. growers have since been following Oregon’s lead, though not quite as rapidly.

Hemp production nationwide is estimated at 90,000 acres, down more than 80% from the highest point, according to Whitney.

On the ground, hemp production has probably shrunk even more drastically than the data indicates, since growers don’t necessarily produce it at the full licensed capacity, he said. “Not all things that are licensed are planted, and not all things that are planted are harvested.”

A lack of regulatory certainty from the U.S. Food and Drug Administration has constrained the development of new products containing compounds such as CBD, a non-psychoactive hemp extract touted for its health benefits, Whitney said.

Meanwhile, hemp is suffering from negative perceptions arising from the sale of a psychoactive extract known as Delta 8, Whitney said. The compound is similar to THC in marijuana, a related type of cannabis that remains illegal under federal law.

“The hemp industry doesn’t have any money to push back on it via lobbying,” he said.

Sales of the Delta 8 compound have helped reduce the oversupply of hemp biomass, Whitney said. However, the hemp industry has come under withering criticism from marijuana producers, who claim it’s evading regulatory oversight and endangering public health, Whitney said.

“It will perpetuate the death of the market,” he said. “It’s scaring away investors, scaring away operators.”

On the bright side, Congress is preparing to negotiate the 2023 Farm Bill, which may clear up some of the regulatory confusion that’s hampered the hemp industry, Whitney said. Congressional support for the hemp industry led to the crop’s legalization in the 2018 Farm Bill.

“That’s one thing that tends to skew to optimism,” he said.

Unfortunately, earlier directives from Congress haven’t moved the FDA to dispel the regulatory fear surrounding the crop, said Seth Crawford, a hemp seed breeder in Independence, Ore.

“You don’t see the widespread adoption of new products by national retailers in the same way you would if the FDA had granted a path forward to regulatory approval,” he said. “We’ve just got red tape ruining a perfectly viable industry.”

Crawford said he has a bleak view of the industry’s future and isn’t sure his seed company can stay in business through the current turbulence.

The amount of hemp needed to fulfill demand for CBD and similar compounds simply isn’t big enough to justify large-scale production, he said. Hemp will most likely be a niche sector dominated by a few large players, rather than a major new field crop grown by numerous small farmers.

“It turns out it’s an easy product to monopolize,” Crawford said. “It’s not something that required the 500,000 acres that people planted in 2019.”

The industry rightly sees promise in the multitude of products that can be manufactured from hemp fibers and seed, said Barry Cook, a hemp seed producer in Boring, Ore.

For example, hemp can be used in building materials, livestock feed and even batteries.

Up until now, though, the vast majority of Oregon’s industry has been oriented toward making CBD and other extracts from hemp flowers, which rely on much different agricultural practices, he said.

“We just don’t have any structure to support it,” he said. “Where do you take your hemp? Nobody is doing it. Does the plant have incredible potential? Absolutely. But you’ve got to have somewhere to process that plant.”

Processing plants geared toward CBD extraction need un-pollinated flowers, since seeds reduce potency, said Iverson, the Woodburn farmer.

His family has built a CBD-oriented processing facility that’s downsized production since the height of the hemp boom.

They’ve still got biomass from previous years that needs to be processed, which is why they only planted 2 acres this year. Next year, the Iversons plan to grow more hemp again under organic certification.

Meanwhile, they’re using the processing equipment for other “nutraceutical” crops with health benefits, including some they grow themselves, such as valerian and lemon balm.

“They’re not big acres but they allow us to diversify what we’re doing,” Iverson said. “We’ve got the facility, so how do we maximize that?”