Hemp brokers offering grower contracts for 2020 | News


Olivia, Minnesota’s long-time ‘corn capital,’ might be facing a new challenge. This Renville County community of 2,482 people could be sprouting a new title as Minnesota’s hemp capital! That amazing and exciting information was presented to 42 potential new hemp farmers on Feb. 27 in Olivia.

Entrepreneurs of this ambitious development are Tim and Paul Seehusen, brothers and sons of Jim Seehusen who 42 years earlier started up his own agricultural business, Pro Equipment Sales. Pro Equipment specialized in steel bins for on-farm storage of corn and soybeans — mostly a new concept to farmers some 40 years ago.    

Tim Seehusen, Chief Operations Officer of prairiePROducers, admits some of his dad’s ambition very likely seeped into the veins of he and his brother Paul. That’s evident in their marketing tag line, “It’s not the future — It’s today!

At this Olivia meeting, Tim commented, “You bet we’re excited; but we’re also cautious — especially in view of the economic squeeze of agriculture these days. We were shooting for 1,000 to 1,250 acres this initial growing season. But even starting with 500 acres will be okay. As everyone knows, the Industrial hemp program is still in its infancy. But farmer interest in growing the crop is incredible. 

“Our challenge will be to find the buyers. Yes, all sorts of talk about the growing multitude of new products made from hemp. And some manufacturers are already on the scene in Minnesota and the Fargo/Morehead area. So we’re confident markets will be developing.

 ‘We’ll start this fall building a receiving and handling facility here at our Olivia headquarters. We’ve gathered lots of data on production costs to grow hemp. An $800 cost per acre — which includes land costs — is the figure we’re working with right now. We don’t yet have markets lined up, so the question is how much risk can we handle? If we do 1,000 acres, we’re sticking our necks out to cover about $800,000 in production costs for our growers. And that’s the risk we and our growers are facing at this stage. Essentially this first year we’re asking they grow the crop; we’ll process and deliver to the market; we’re offering 15-cents per pound. It’s like a partnership agreement: You grow it; we’ll get it sold.”

So obviously, faith and confidence between growers and the Seehusen crew is a must this first year. Tim is well known to many area farmers. For the past 23 years he owned and operated Square One, a local building supply business in Olivia.

Seehusen had previously talked with most farmers attending this Feb 27 meeting. He estimates most growers will be doing at least 20 acres; a potential $16,000 start-up investment cost. Tim knows farmers. “Most have told me ‘I can handle that.’ We have tremendous farmers in this area. They are risk takers every year, but their crops always get planted. Each day as we move along, I’ll have more knowledge on our prospective buyers. And that’s why we offer that 15-cent startup contract price.

“Our growers know an early start on this new crop gets them ahead of the learning curve. Once this hemp industry kicks into gear, we’ll have competition. At this stage I’m counting a number of area farmers to get on board.”

Already on board is Jon Steinbach of Redwood Falls, Minn. He’s familiar with hemp for CBD products and medicinal uses. He’s an indoor grower using a large heated building with air filtration and LED lighting which lets him grow three crops per calendar year.

What got Steinbach into growing his own hemp? Sleep apnea. “If you grow the right strain, it will make you feel better. I was doing medicinal hemp before medicinal was the thing. I started growing my own hemp and it certainly cleaned up my problem.” (This was in the early 1990s he said.)

“Working with the Seehusen team, I’ll be a research grower working on industrial hemp varieties for this area. I won’t be doing official testing; that’s the job of the Minnesota Department of Agriculture. But I’m just 20 miles down the road from Olivia so we can easily connect on some of these projects.”

Steinbach is enthusiastic about hemp out here in Prairie Country. “I salute what the Seehusen guys are doing. They’re taking that first big step! I believe this crop can be a new cash crop for smart growers getting on board the ‘hemp train’ now picking up momentum with Minnesota farmers.”

A Renville County sugar beet grower at this Feb 27 meeting now has two years’ experience growing hemp. Marketing is the biggest challenge, he said adding, “I think it’s overstated how hard a crop it is to grow. Getting it out of the ground is sort of like sugar beets … you have that nervous moment waiting for the crop to emerge. But once up, it grows fast. It’s not a difficult crop to grow.”

He plants in 7-inch rows on irrigated sand soils which he thinks is helpful for this crop. He said on black dirt you can get crusting problems — just like in sugar beets.  Is he expanding for 2020? “Maybe … that 15-cent market might convince me. I’m encouraged. I think the Seehusens are on the right track.”

And he’s encouraged about the future of hemp. “My son is only 12 and he really wants to farm. By then I think hemp will be in full production. I think hemp will be a rotational crop for a lot of guys here today.  Reliable markets are the key.”

AURI Project Development Director Harold Stanislawski spoke at this Feb. 27 meeting. AURI’s (Agricultural Utilization Research Institute) mission is to assist new ventures, new products for long-term benefit through value-added agricultural products.

Stanislawski brought a piece of hemp wood made from hemp fiber by a Kentucky firm Fiber Ogee. “This is a bio-composite product made into hemp board for flooring, or even higher end products that might go into cabinet doors. Hemp fiber used in these cabinet doors strengthens them considerably. Its heavy stuff … this particular piece could be used in flooring. It could be stained and treated many different ways to give a variety of looks and design. 

“AURI is pleased to be working with companies interested in new uses of hemp fiber,” he went on to say. “Even building products such as Hemp Crete blocks for structural walls in homes, commercial buildings, etc. There’s a company in Fargo using hemp resins to make things such as coffee cups, tooth brushes, even eye glass frames, all from hemp. And we soon will be working with some Minnesota packaging companies that have contacted us about the potential of hemp fibers in packaging — anything from cardboard boxes to carpeting.

“Obviously, new end-product users are coming along regularly now that industrial hemp is recognized by USDA as a renewed commodity. AURI is committed to working with the hemp industry by providing  value-added ag research, laboratory analysis, business and technical services, and a network of science and business professionals.  Please connect with us via our website at www.auri.org.”

Stanislawski mentioned AURI people are also meeting with the Minnesota Department of Transportation. “When new roads are being built, rubber erosion control mats are placed on the ditch banks and surrounding drainage structures. That’s a pretty big market for the Minnesota Department of Transportation. They have told us they would love to switch over to some hemp products — thinking hemp mats would simply last much longer. They’re under mandate from the Erosion Control Agency to move away from rubber-based mats. This potentially could be a huge new market for a hemp-based fiber mat.”

“Two Canadian firms have invited us to see their factories making these hemp based erosion control mats and their hemp-crete building blocks. So why re-invent the wheel?  If we can learn from our Canadian neighbors, who are already into this manufacturing process, we should bring this knowledge back to potential Minnesota processors. Who knows? Maybe even the Seehusens right here in Olivia.”

“Just this morning I got a call from a Minnesota company wanting to get into new packaging materials using hemp as the prime ingredient. Suffice to say, hemp potentially is a rapidly expanding new industry for Minnesota,” said Stanislawski.

He mentioned visiting with Ford Motor Company in Georgia and hearing about the bio-based materials now being used in their automobiles. “I asked her about hemp. She replied, ‘Oh yes, we’ve got lots of uses for hemp products in various components of our vehicles. It’s stronger, lasts longer and doesn’t rust like metallic substances. But she reminded me that it must not be more expensive than the current products they are using”

Stanislawski also mentioned a product called grapheme. It is mined from the earth to make super capacitator batteries. Hemp can be the carbon-like graphene source for that usage; and it would be much cheaper than extracting this product from the earth.

The AURI offices at Marshall, Crookston and Waseca provide services both to growers and processors.  Check the MDA website for a listing of the various hemp seed varieties they have tested; and lists of some of the characteristics of the oils. 

It’s important to note you must be a grower licensed by the Minnesota Department of Agriculture before crop insurance agencies will write up hemp coverage insurance. March 31 is the license deadline to become a 2020 certified hemp grower in Minnesota. Licensing cost is $400.

Your hemp field will be walked and pre-harvest samples are cut 25 to 30 days ahead of harvest. If tested above a 0.3 percent THC level, the field must be destroyed. The 2018 farm bill spells out that industrial hemp (Cannabis sativa L) contains no more than 0.3 percent THC (delta-9-tetrahydrocannabinol).

For licensing information, contact Margaret Wiatrowski who is the Industrial Hemp Program Coordinator with the Minnesota Department of Agriculture. Her email address is Margaret.wiatrowski@state.mn.us. Her phone number is (651) 587-6795.

Seed costs are about $6 per pound. At a 40-pound per acre seeding rate, that’s $240. However, with a yield of 8,000 pounds per acre at 15-cents, you have a $1,200 gross revenue expectation and $400 per acre net.

A seed source spokesperson reminded you must be a registered and licensed grower to buy hemp seed.  “We will have a pre-planting meeting to go through all the agronomics information that you’ll need.  And we will also follow that crop through the course of the year to make sure there aren’t any hiccups.”   

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