Fats, Oils, & Fuels Webinar 9/15/20: Customer Q&A
Video shorts from the Fats, Oils, & Fuels Webinar Report Our team of Senior Analysts break down questions from the live Webinar audience during the call on Tuesday, September...
Stakeholders that are closely watching the development fiber hemp processing speculate on the appropriate scale for decortication, relative to current fiber hemp pricing. There is little decortication going on in the US at present, and what is being done is processed on a small scale. Panda Biotech has garnered attention with a highly capitalized venture that will process at scale. Their Hemp GinTM will reportedly handle 10 tons/hour, but other details about the technology aren’t yet public. The Texas company announced in May a free seed giveaway for producers interested in producing fiber hemp. Getting a head start on the agronomics of fiber hemp production in Texas is forward thinking and will facilitate scaling to process a projected 130,000 tons annually. At 6 tons/acre yields, the facility will require over 43,000 acres of hemp within about 50 miles of the plant, perhaps closer.
Small scale decorticators are operating in North Carolina and Pennsylvania, though Groff N.A. in Pennsylvania appears to have stepped back from processing hemp fiber this year or developing their decortication technology called HempTrain. The company installed their equipment late last year, and also announced the purchase of HempTrain manufacturer Canadian Greenfield Technologies, including the IP behind the HempTrain. Groff contracted fiber acreage last year and took delivery of baled hemp straw that has been put on ice for the time being, while they focus on the cannabinoid aspect of their operation. They did not contract fiber production this year. The role of HempTrain in the developing fiber segment isn’t clear, but the stationary nature and complexity will be an obstacle, as is the $1.5 million price tag. The machine is reportedly capable of decorticating 6000 tons annually, which could equate to around 2000 acres.
Hemp Today reported today on Formation Ag’s decorticator, the Fiber Track 660, which has undergone some design evolution with feedback from processors like Taimour Azhar, principle with North Carolina company The Hempville. The Hempville has contracted about 125 acres for fiber production with North Carolina farmers, and is likely the most active decortication program in the US currently. The Hempville has been able to fuel R&D in North Carolina and provide universities material to experiment with. The machine is capable of processing ½ ton/hour, or roughly ½ to 1 acre/day. At $139,000 base price, the investment presents far less of a barrier than other offerings. For another ~$90,000, the system can be expanded to include conveyance, secondary processing, and sorting, requiring 5000 ft2 of dedicated operating space.
Formation Ag has also been developing a larger system, called the Fiber Track Genesis. Projected to handle 5 tons/hour this may well be the sweet spot in appropriately scaled decortication. The ability to mount on a semi-trailer makes the unit practical, as many farm operations already own or operate semis for grain, hay, or livestock hauling. Hemp straw is bulky, requiring 5 tons or more to produce 1 ton of bast fiber. The volume of material needed to fuel some of the supply chains that many stakeholders aspire to service makes the hauling of raw hemp straw impractical. While it may be practical to have some large volume operations like Panda’s in Texas, broader adoption in the US will require equipment that can be moved from farm to farm, reducing the bulk significantly, and producing valuable bast fiber, and hurd for on farm use or additional sales.
Operating any of these machines requires skill, some familiarity with machinery, and an emphasis on maintenance. It isn’t known how practical it is for larger scale operations to operate an on-farm decorticator. For a 500-acre operation producing 6 tons/acre, it would require 600 operating hours to work through the harvest, or 10 weeks with typical 60-hour work weeks. The economics of fiber production with modern equipment is unknown, particularly with underdeveloped markets lacking buyers. Larger operations can certainly operate more than one machine, and contract decortication services are likely to have a major role in the segment’s development. An operator running one or more of these machines could service several thousand acres annually. This may include on-farm storage of large rounds or squares, with processing deferred to slower times in the year when labor isn’t as pressed.
The smaller Fiber Track 660 is appropriately scaled for this phase of industry development and may prove useful for future production systems. While it’s scale may not be practical in the long run, the smaller unit will help to jump start the fiber supply chain. As the crop commoditizes and pricing is influenced by widespread production, the larger unit will have a major role in the evolution of hemp fiber markets in the US.