Lack of Kansas-specific knowledge about growing hemp and modest opportunity to market the plant’s fiber for manufacturing and grain for flour are limiting financial return for Kansas farmers working with the alternative crop, state auditors said Wednesday.

Auditors with the Kansas Legislature released a report to a joint House and Senate committee indicating hemp could become a more profitable crop in Kansas depending on harvest yields, development of markets for hemp fiber and grains and future demand of CBD products. The analysis for 2019 was hampered by lack of statewide data on hemp production costs and sales prices in Kansas.

The analysis relied on findings of Tyler Mark, an agricultural economist at the University of Kentucky, and information from the Kansas Department of Agriculture. Auditors estimated Kansas producers had a return of $4.4 million last year on commercial hemp crops. Farmers in the state apparently lost money on floral and grain sales, but sale of plants started in greenhouses more than made up for it.

Sales of floral, grain and starter plants is expected to generate $21.6 million in returns for farmers within several years, auditors said.

Mike Beam, secretary of the state Department of Agriculture, said the magnitude of the crop’s influence in Kansas would be determined by overall demand for hemp products, financial returns, market transformation and innovation on alternative uses. Other risks to producers involve legal considerations for growing industrial hemp as well as environmental constraints on growing a version of the marijuana plant that has less than 0.3% of the chemicals that people consume for recreational purposes.

“KDA acknowledges these risks and challenges and believes that as the federal and state regulations surrounding production become more certain, growers become more experienced, and processors and market outlets become more available, the opportunity for the crop’s success in Kansas will ensue,” Beam said.

Researchers at Kansas State University are using a $200,000 grant from the U.S. Department of Agriculture to gather insight into how the hemp plant could be incorporated into cattle feed. The federal Food and Drug Administration would have to approve addition of hemp in animal food.

“Although hemp can be legally cultivated under license in Kansas, feeding hemp products to livestock remains prohibited because the potential for cannabinoid drug residues to accumulate in meat and milk has not been studied,” said Hans Coetzee, professor of anatomy and physiology in the College of Veterinary Medicine.

Michael Kleinhenz, assistant professor of beef production medicine at Kansas State, said most research on THC intoxication and lingering presence of cannabinoids had concentrated on humans, mice and swine. There is a need to study use of byproducts, such as leaves and residual plant fibers, as feed source for cattle, he said.

“Because these are predominantly cellulose-containing plant materials, the ideal species for utilizing these feeds are ruminant animals, specifically cattle,” Kleinhenz said.

He said university researchers need to study the depletion profile of cannabinoid compounds absorbed by the rumen and passed on to animal tissue and milk. Follow-up experiments will include pilot studies to examine the results of feeding hemp on animal behavior and immune function.

“Our goal is to fill in the knowledge gaps,” Kleinhenz said. “Until feedstuffs containing hemp are established as safe in animals, our data will assist producers in managing situations involving intentional or unintentional hemp exposures.”

Hemp was grown legally in the United States before it was banned in 1970 under federal controlled substances law. In 2018, industrial hemp was removed from that federal law. Kansas officials agreed to the state’s participation in federal research on hemp. Last year, the Kansas Legislature adopted a regulatory framework for hemp production.

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