Similar to other crops, hemp profits can be calculated per acre by multiplying the yield per acre to the market price, less the cost of production.
However, the profitability of hemp relies largely on the purpose of the crop. There are three different types of crops you can be growing and each has a different market value per acre and cost of production.
Below is a breakdown of costs and profit per acre for cultivating hemp according to the type of crop. The figures are just estimates, but if you want to know how much it’ll cost you – down to the penny – the only way to do it is by creating a detailed, professional hemp cultivation business plan.
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Hemp grain/seed market price ranges from $0.60-$0.65 per pound, while hemp farmers get about an average yield of 1000 pounds per acre. After taking into account production costs that can be anywhere from $300 to $350, farmers can make around $250 to $300 per acre.
Hemp fiber sells at an estimate of $260 per ton. The average yield of hemp fiber per acre can be anywhere between 2.5 to 3 tons. The production costs average around $300 to $350, which means farmers can make $430 to $480 per acre in profit.
Hemp CBD Oil
The hemp CBD profit per acre calculation is complex because many factors impact the CBD yield, like the cultivation method. There are two methods for cultivating hemp for CBD:
- Agronomic – hemp is grown like any other agricultural commodity crop. This method is cheap and low-risk but yields less CBD.
Horticultural – hemp is grown in a manner similar to cannabis – with exacting detail and environmental controls. This model is a lot more expensive and risky but produces significantly higher yields of CBD than the agronomic model.
Depending on a number of factors, your CBD crop could be generating anywhere between $2,500 and $75,000 per acre. The expansive range is due to the difference between agronomic and horticultural farming, as well as the learning curve when starting to grow hemp for CBD purposes.
Here’s a sample breakdown of numbers to realize if you’re doing everything right and following methods to have the highest yield of CBD:
If your crop produces about 2,500 pounds of hemp flower per acre with an average of 10% CBD content per pound, then you can sell it at a market price of $25 to $35 per pound. Then, this will leads to a gross profit ranging from $62,500 to $87,500 per acre before subtracting the costs of optimizing your CBD yield.
Hemp CBD oil gives the highest return among the three types of crops. However, it requires very different conditions and more tedious labor practices.
So if you are really interested in the more lucrative CBD market, you have to make a sure you take a deep dive and fully understand all the factors involved to secure a high percent CBD yield, so you can be near the $75,000 profit range, rather than the $2,500 profit per acre.