Oklahoma hemp farmers will receive a big boost when a major processing plant opens early next year in Wichita Falls, Texas.
Panda Biotech, headquartered in Dallas, announced the 500,000 square-foot facility will be the largest in the nation to process and cottonize industrial hemp fiber in commercial quantities.
Panda company executives expect partial operations will begin in the first quarter of 2021 with full production anticipated by the first quarter of 2022.
Panda is targeting Oklahoma’s industrial hemp farmers as major customers, according to company spokesman Bill Pentak.
“They (Panda) want the hemp products from Oklahoma,” he said. “They’re very close to the Oklahoma border so they’re excited about that.”
Panda’s announcement should excite state hemp farmers, too. The lack of a major processing plant for Oklahoma farmers growing hemp fiber has been a significant drawback, said Kenny Naylor, director of consumer protection services for Oklahoma’s Department of Agriculture.
“Right now, farmers are in more of a wait-and-see before they jump in,” he said. “There are so many things that hemp can produce. There are tons of products. All of those lend to making hemp a good option (for farmers).”
Industrial hemp used for manufacturing applications is highly valued for its natural durability and environmental sustainability. The processed fiber, hurd, and cellulose from industrial hemp can be used in the production of a multitude of products including textiles, a wide array of building materials, paper products, automotive components, nanomaterials, composites, and bioplastics.
In addition, research indicates that hemp-based supercapacitors offer a less expensive alternative to materials currently used in rechargeable batteries for applications such as smartphones and electric cars.
State Rep. Scott Fettgetter (R-Okmulgee) said he’s hopeful Oklahoma farmers will utilize the Panda facility and take advantage of its proximity to enhance their operations.
“It should be (used) and since hemp is federally recognized as a legal plant it can be transported across state lines,” he said.
At the same time, Fettgetter would like to bring a processing plant to Oklahoma.
“I’ve preached to the Department of Commerce and economic development people about this,” he said. “The problem is getting people to invest money to do that (build processing plant). We need manufacturers who will use it (industrial hemp) once it’s processed. Who’s going to invest money into planting hemp and not know if someone is going to buy it? At the same time, who’s going to build a processing plant and not know if the hemp will be grown? It’s a messy situation right now.”
However, some Oklahoma farmers aren’t focusing their work on industrial hemp. Instead, they’re planting the hemp seeds for cannabidiol (CBD) and cannabigerol (CBG) oil extracts.
Still, Naylor believes Panda’s new facility might convince state farmers to include industrial hemp in their growing plans.
“I think they would certainly do that,” Naylor said. “I think that (Panda’s) site being where it is gives them (Oklahoma hemp farmers) a place to take their hemp to. Having some way of processing their hemp opens up a whole new market. And I think a lot depends on what happens to the CBD market.”
Panda Biotech plans on installing the largest industrial hemp decorticating, or processing, equipment ever used to separate the outer bast fiber from the inner woody core, or hurd. Panda Biotech’s top mechanical engineers worked with a leading international equipment manufacturer to “super-size” their existing line of decorticators.
At full production, the two 10-ton/hour decorticators are expected to process close to 300 million pounds of industrial hemp per year. The fiber will be refined for textile applications, and the hurd will be processed for a variety of industrial purposes.
Some farmers in northwestern Oklahoma are growing a tri-crop that provides hemp seed, fiber, and CBD. Those farmers, Naylor said, would likely use the Panda plant to process their hemp harvest.
“What we’re seeing is the beginning of what could be a major industry for Oklahoma farmers. This (Panda facility) is an opportunity to market their products,” Naylor said.
Oklahoma’s pilot hemp program began in 2018 with 29 growers who used 445 acres, according to figures released by the state Agriculture Department. In 2019, the number of hemp farmers grew to 359 and covering 21,637 acres. A dramatic downturn occurred this year with 129 growers and 3,885 acres.
Michael Potter, of Cyril, said he’s in his second year of growing CBD for legal, smokable purposes.
“Growing it is good, but selling it is a bust,” he said. “It’s not what we hoped for, but it’s still a growing market. It’s a year-to-year thing.
Potter enjoyed a productive 2019, but in 2020 he got a late start due to cash flow issues and produced about a third of the crop compared to last year. Potter said farmers can earn about $100 a pound for smokable hemp if it’s a high-quality product.
“If I can establish reliable buyers, I may do it year after year,” he said.
Potter planted hemp over six acres in 2019 but reduced that to five acres this year.
Meanwhile, Cordell’s Bill Kern has been growing hemp to sell as a CBG product, which is known to kill MRSA, a bacterium that causes infection in different parts of the body, on contact.
Kern built a small greenhouse on his property where he grows the hemp plants that he turns into a retail product that is sold directly to consumers.
Last year, the CBG product brought $10,000 per liter, but that number dropped dramatically in 2020 to $1,000 per liter, which left Kern shaking his head in disbelief.
“It’s the volatility of the market,” he said.
But Kern has adopted the business model of seed-to-shelf, which cuts out the processor or middleman. Using one liter of CBD oil, Kern said it’s possible to make $160,000 a year by selling 4,000 units of a hand cream product at $40 per jar. Each unit would contain 250 milligrams of CBD oil, which is less than 1% of all ingredients, he said.
Still, Kern isn’t totally opposed to growing industrial hemp as long as the product can be processed, and the price is right.
“I’d be willing to put in 50 acres if a processing plant came in,” he said.
Kern was adamantly opposed to growing industrial hemp after the 2018 pilot program ended.
“There was no money in that because there was no processing plant,” he said. “It really depends on the price per ton. At the time (2018), contractors were going to pay farmers $300 per acre. You have to cut it down and let it dry out. It’s a harsh crop to cut down and it can destroy your equipment.”
Kern was one of about 20 farmers who planted 15 acres of hemp fiber and harvested 75 plants out of about 3 million seeds during Oklahoma’s 2018 pilot program.
“That was the beginning of my education right there,” he said. “Once farmers figure it out I think it’ll be good, but right now it (hemp industry) is disappointing.”