Highlights;
Certainly! Here’s a structured summary of the key points from the press release:
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Flawed USDA Methodology: The USDA’s current approach to calculating the value of the hemp cultivation sector is incorrect, particularly in how it assesses the floral component of hemp. The methodology incorrectly averages the value of high-value hemp flower with low-value hemp biomass, leading to a significant undervaluation of the crop.
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Value Discrepancy:
- Hemp flower is valued at approximately $330 per pound, while hemp biomass is only about $2 per pound.
- In 2024, the USDA reported 20.8 million pounds of floral cannabis output worth $386 million, averaging $18.56 per pound. However, correctly valuing this at $330 per pound would result in a total value of $6.86 billion.
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Impact on Farmers and Market:
- The undervaluation by the USDA makes it harder for farmers to secure funding and discourages them from cultivating hemp.
- This incorrect valuation undermines the true potential of the hemp industry, discouraging investment and growth.
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Policy Implications:
- Flawed data led a senator to incorrectly claim that farmers receive less than 1% of the $28.4 billion hemp market value, while accurate valuations show farmers could receive around 24.2% of the retail value, surpassing returns from crops like corn (15%) and soy (7.9%).
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Call to Action: The USDA needs to correct its methodology to reflect the true value of hemp, particularly the floral component, to avoid stifling market growth and to ensure accurate policy decisions.
This summary highlights the critical issues with the USDA’s valuation method and the significant impact on the hemp industry’s growth and farmer revenue.
[PRESS RELEASE] – PORTLAND, Ore., August 28, 2025 – Globally renowned cannabis and hemp economist Beau Whitney, Chief Economist of Whitney Economics, has presented data challenging the methodology used by the U.S. Department of Agriculture (USDA) to calculate the value of the hemp cultivation sector. According to Whitney, flaws in this methodology are leading to a misperception that farmers are not benefiting from the growth of the hemp-derived cannabinoid industry.
“By publishing inaccurate data about the value of the hemp crop, the USDA is inadvertently harming the farmers it aims to regulate,” Whitney stated. “The lower reported value of the crop makes it harder for farmers to secure funding, hinders infrastructure development, and stifles market growth. These errors are also discouraging farmers from incorporating hemp into their crop rotations. In reality, hemp farmers are benefiting more from their contributions than corn or soybean farmers.”
Hemp farmers are required to self-report data annually as part of USDA regulations, including details about the type of hemp grown, its purpose (fiber, grain, seeds, or cannabinoids/floral), the quantity produced, and the crop’s value. This data collection process is similar to that used for other agricultural crops. However, the methodology for evaluating the value of hemp, particularly floral hemp, is problematic.
The valuation process for hemp fiber, grains, and seeds is relatively straightforward, as these products have consistent and limited uses. However, the methodology for calculating the value of floral hemp is flawed due to the diverse and varying values of its uses.
“The issue lies in how the value of floral output is determined,” Whitney explained. “The flower’s value is significantly higher than that of biomass. To align with standard USDA practices, the crop’s value is based on a blended average of biomass and flower sales, which drastically undervalues the crop.”
In 2024, the price of hemp flower exceeded $330 per pound, while biomass averaged just $2 per pound. According to the USDA report, floral cannabis output in 2024 was 20.8 million pounds, valued at $386 million, resulting in an average of $18.56 per pound. However, only 1.2 million pounds of flower would be needed to reach the $386 million valuation. This flaw in valuation underestimates the entire floral sector.
This undervaluation misleads investors about the market’s potential, Whitney said. As a result, farmers are less inclined to plant hemp or include it in their crop rotations. Policymakers are also using inaccurate data to make decisions. For instance, during a recent congressional hearing, a senator cited that farmers receive less than 1% of the $28.4 billion in market value, despite the actual figures being significantly higher.
If the floral hemp were valued at $330 per pound, the 20.8 million pounds would amount to $6.86 billion at the wholesale level, representing 24.2% of the total retail value. This share is substantially higher than the 15% for corn and 7.9% for soy. Such accurate valuation would likely attract more investment and encourage farmers to grow hemp.
“Accurately highlighting farmers’ benefits from hemp cultivation could also shape federal policies,” Whitney added. “This USDA error is profoundly impacting the hemp industry and must be addressed to prevent further harm and market suppression.”
For more details, visit Whitney Economics.
