Cost Your Hemp
(to be released shortly)
The potential growth of a Hemp Industry in Australia has given rise to much enthusiasm along with a fair amount of hype regarding the potential business opportunities and profits to be made. The online Cost Your Hemp tool is designed to help you arrive at a realistic assessment of the cost of growing hemp in your region.
The Cost You Hemp tool is designed for both potential growers and hemp processors. Growers will have a guide to their investment risk by identifying all input costs to the point of sale. Processors will understand the cost factors when negotiating their contracts with growers. Since neither growers nor processors can succeed alone, it is imperative that they understand the primary production costs which affect them both and ultimately appear in the pricing of the end products.
While there will always be unpredictable factors which affect a crop, there are also many factors that we can control and measure when deciding what to sow. The type of soil, suitable seed variety, access to water, equipment and other infrastructure as well as their respective costs can all be identified in advance. Managing risk is part and parcel of any farmer’s planning and setting a profitability margin will need to take account of unforeseeable fluctuations in yield and quality. Experience and timely advice from agronomists will help to ensure the best chance of success.
Aside from taking you through all the steps required to cost your crop you will also know the critical questions to put to your suppliers and how these might be reflected in any supply contracts.
With the Cost Your Hemp tool you can systematically identify the costs for either Fibre, Grain or Dual Crops. It also includes a section for identifying Opportunity Costs, namely the cost of choosing hemp over another option for using that land, water and infrastructure. This is an important consideration also where you are able to double crop.
By using this tool you will identify costs for the following:
- Soil preparation
- Seed requirements
- Fertiliser and chemical applications
- Water use
- Harvesting, baling/drying and storage
- Freight costs
- Capital/opportunity costs.
In addition to the harvested crop there may be other advantages of growing hemp, such as soil improvement and benefits for other rotation crops. Hemp is a quality sequester of carbon which may also deliver a value in carbon credits. These are not included in the calculations.
Thanks are due to Tom Smith for sharing his experience and detailed analysis of growing hemp. These were initially set out in an excel spreadsheet which formed the basis of the Cost You Hemp web tool which will shortly be available on a subscription basis.