Diverse coalition will boost hemp industry

SAVANNA, Ill. — The industrial hemp industry is still in its infancy in Illinois and a new venture is underway to create viable models for its success.

Mississippi Fiberworks was developed last year at the Savanna Industrial Park, and Robert Davies detailed the new initiative at the recent Illinois Hemp Summit, hosted by the Illinois Department of Agriculture.

“Through our work we hope to create better economic outcomes for family farmers, rural communities and their economies, as well as statewide industry. Underpinning our work is the belief that growing industrial hemp fiber as a rotational commodity will make a positive and lasting impact on Illinois watersheds and the natural environment,” Davies said.

Mississippi Fiberworks has a diverse partnership that includes regional economic development entities, agricultural organizations, educational institutions, industry and logistics.

“Illinois now has the opportunity to take the lead in fiber production and related manufacturing.”

—  Robert Davies, Mississippi Fiberworks, Savanna, Illinois

In late 2020 Mississippi Fiberworks worked with Eastern Illinois University’s School of Technology to facilitate a research grant which was awarded by the Lumpkin Family Foundation. The research will focus on three tiers — production, processing and value-added products.

“Under production we will look at how planting industrial hemp fiber in a rotation affects water quality and soil health. Under processing we are trying to understand who and what we are processing for. Under value-added products we will look at new products, as well as how industrial hemp fiber can play a role in repurposed and recycled materials,” Davies noted. “Sustainable energy solutions made from industrial hemp fiber will also come under the spotlight.”

Field Trials

Mississippi Fiberworks began on-site industrial hemp production trials in 2020 on over three aces at Savannah Industrial Park. The trials cover a broad spectrum of hemp production from agronomics to budgeting and sales.

“Projecting revenues is still a guessing game as there are very few natural buyers leading to a thin market with little transparency,” Davies said.

“When developing budget models in undeveloped markets it is important to acknowledge the uncertainty surrounding financial projections. Two important things to note in this sensitivity analysis. First, the literature suggest extremely wide variability in production numbers per acre. Our conversations with farmers who have cultivated hemp fiber suggest that a conservative approach is best.

“Second, transactional data for fiber sales is scarce. The true clearing price is difficult to ascertain. We are interested to hear commodity groups’ thoughts on transparent pricing in the marketplace.”

Coalition For Success

Davies said the creation of a coalition of agriculture, environmental, manufacturing and state agencies would help lead to success.

“We must not lose sight of the environmental imperative which is Illinois watershed health. We must incentivize Illinois manufacturers and create a slow rollout of producers. It would be good to look at a quota production system and create areas for collaboration, research and market-driven outcomes. Industry must realign and we must not forget that we are the consumers,” he said.

“The first group in our coalition is family farmers. What do we think the incentives could be for family farmers? We must take a look at the family farm income over the past five or even 10 years. We must look at how family farmers understand the risk mitigation and diversification and also the environmental considerations.

“What is the benefit of adding an additional rotational commodity to their operations? How well does it integrate with the row crop system and how can we create profitability through managed markets? We must also understand that industrial hemp fiber has a comparatively low cost of production.”

Environment

From an environmental aspect, there is a need to understand what impact the introduction of industrial hemp production as a rotational crop will have on local watersheds.

“What will this crop do for nutrient loss reduction, what will it look like with a decrease in herbicide and pesticide application, what will the regional and national impacts be and how will this impact the Mississippi River system. For example, a 10% reduction in Illinois glyphosate use would equate to about 2.4 million pounds annually,” Davies said.

Green Appetite

Industry and manufacturing combine to form the third cog in the coalition.

In conversations with manufacturing and industry bodies throughout the state, Davis said it has become clear that there is significant appetite for green materials, bioplastics, composites and sustainably produced building material.

“Manufacturers want inputs that are grown, processed and manufactured in Illinois. If we create an incentivization program to reward companies that see and use inputs from family farmers in Illinois we will see market expansion,” he continued.

“Incremental growth with real market-driven outcomes should be our goal. An annual expansion of the incentivization program will lead to more product lines.

“The final and possibly most important part of the coalition puzzle is the Illinois Department of Agriculture. As a nationwide ag leader, there exists an opportunity for Illinois to play a prominent national role in establishing a hemp fiber rotation in the state.

“Illinois now has the opportunity to take the lead in fiber production and related manufacturing. The department can also help to facilitate the development of an Illinois hemp fiber coalition that includes family farmers, the environment and manufacturing.

“The department can also play a role in incentivizing manufacturers and other industry stakeholders.”