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Ever since the passage of the 2018 Farm Bill, more Americans are getting interested in high CBD hemp production. Even before the bill was finalized, CBD was a booming industry that is only expected to grow further under protection from the federal government, reaching potentially tens of billions in the next few years for CBD and hemp based product.
Although there is a blossoming market for hemp out there, there are things that can go wrong with your investment. Before diving into the hemp-growing world, it’s crucial for newbie farmers to understand futures contracts. Securing these agreements with a reputable company is essential for farmers who are serious about thriving in the competitive CBD market. Let’s go through some of the essential things every farmer needs to know about hemp futures farming contracts.
Hemp farming futures contracts are agreements between buyers and sellers of hemp before the plant has been fully cultivated. The reason these agreements are so popular is that they set the price beforehand, which, of course, minimizes risk on both ends of the deal. In addition to setting the price, futures contracts usually include specifications such as when the hemp needs to be cultivated, how much product the buyer wants, and how the hemp has to be sold.
As mentioned above, the main benefit of getting a hemp futures contract is that it minimizes risk. Farmers can rest assured they will have a buyer for their product beforehand, and buyers secure the exact strain of cannabis they want at the price they need. By setting these prices and dates ahead of time, both buyers and sellers can focus their attention on their respective fields. Farmers can focus on cultivating the best hemp possible while manufacturers plan how to use the future shipment of hemp to create various products.
There are three main types of hemp futures contracts, each designed to serve a different purpose.
Although there are a wide variety of hemp futures that farmers could enter into, the most common is called a. In this contract, the farmer is only required to give the buyer a certain amount of unrefined hemp biomass. Usually, manufacturers use this raw hemp to produce high CBD hemp oil and refine it into CBD distillate and isolate.
Another agreement hemp cultivators might consider looking into is a. As the name suggests, farmers who are involved in this contract must supply the buyer with hemp flowers, which are typically harvested early in the growing process. This futures contract is best for farmers who are selling to distributors interested in making medicinal CBD products.
The third most common futures contract is known as an. Like CBD Hemp Flower Futures, Industrial Hemp Futures are typically best for buyers who are interested in making high CBD products for medical use. Unlike CBD Hemp Flower Futures, however, these Industrial contracts are concerned with transferring extremely refined hemp produced at the end of the harvesting season.
There are no hard limits when it comes to the length and flexibility of hemp futures contracts. It is common to close season or year-long or even multi-year agreements. Their flexibility is precisely what makes hemp futures contracts so appealing to buyers and farmers, as it gives the necessary leeway for negotiations.
Due to the unpredictability that comes with farming, farmers might want to ensure that only part of their total production go into the contract or protect their interests in case of a bad season. The structure of each particular contract is up to the interested parties, therefore you can tailor it to your needs. Here at Industrial Hemp Farms, we can explain how the process works and help you find the best terms for your needs. After all, it’s in our best interests to help you!
Any farmers interested in working with a company that’s experienced in selling hemp biomass should get in touch with Industrial Hemp Farms. Over the years, Industrial Hemp Farms has worked with many of the CBD industry’s biggest buyers of hemp biomass. Whether you’re an experienced hemp farmer or a beginner, Industrial Hemp Farms can help you secure the best contract for your needs.
To learn more about hemp futures farming contracts, reach out to us at Industrial Hemp Farms or give us a call at (800) 985-9587