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Hemp Industry Aims for Access in $345B Global Market for Animal Feed Ingredients

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Hemp Industry Aims for Access in $345B Global Market for Animal Feed Ingredients

Photo Credit: USDA

By Elaine Lipson

As consumers become more familiar with hemp in end products such as textiles and building materials, growers are also focusing on hemp as an ingredient for animal feed, including food for pets, farm animals, livestock, and poultry. While long-term potential for the market is enormous, hemp is not yet approved at the federal level by the Food & Drug Administration Center for Veterinary Medicine (FDA–CMV) as a feed ingredient or additive.

Yet advocates are making progress in this lucrative arena as the hemp industry navigates a complex regulatory approval system and a need for ongoing research to help satisfy regulatory requirements and to support growers and producers. 

U.S. Second to China in Global Feed Market and Exports
According to Animal Feed Market – Forecasts from 2021 to 2026, the worldwide animal feed market is projected to grow at a CAGR of 4.90% to reach US$460 billion by 2026, from US$345 billion in 2020. China took over the top spot as the world’s leading animal feed producer in 2021 with the U.S. in second place, according to the 2021 Alltech Global Feed Survey.

Major agricultural companies, including U.S.-based Cargill, Land o’ Lakes, and Tyson, dominate the feed market with commodities such as corn, canola and soy (all significant GMO crops). The U.S. is the world’s largest corn producer, and it is the primary grain grown in the U.S. for feed, according to the U.S. Department of Agriculture (USDA). The U.S. share of the global market was forecast to reach $83.6B in 2024 by the United States Animal Feed Market – Forecasts from 2019 to 2024 report.

IBISWorld.com’s Farm Animal Feed Production Industry in the US, updated in September, 2021, notes that supply chain disruptions were likely to lower 2020 revenues in the market with recovery in 2021. In this complex market, crop prices, weather events, global increases in the demand for food, and market shifts are all factors.

Montana Approves Hemp for Pets, Horses in Legislative Move
According to the Hemp Feed Coalition (HFC), which aims to gain federal market approval for hemp and byproducts, hemp can move toward federal approval as a new ingredient or as a feed additive (the feed additive market includes antibiotics as well as vitamins and other nutritional components). Their flowchart illustrates each path. New ingredient applications go through the Association of American Feed Control Officials (AAFCO), a membership association of local, state, and federal agencies regulating sale and distribution of animal feeds, and the U.S. Food & Drug Administration Center for Veterinary Medicine (FDA–CVM). Feed additive petitions go directly through FDA-CVM.

Meanwhile, states are taking it on themselves to move hemp forward as a potential feed ingredient. In April 2021, Montana approved hemp for pet food and horses. Federal approval will still be required before hemp can be approved for livestock feed even at the state level.

AAFCO Concerns About CBD Levels and State Actions
Some legislators and industry members have voiced concerns about CBD levels and possible concentrations of intoxicants in the food chain if hemp is used in feed. AAFCO released an updated position paper in September, 2021 urging caution in regulatory approval and definitive research to ensure consumer safety and confidence in animals raised for human consumption.

AAFCO’s position also cautioned against growers and producers seeking state and local legal pathways outside of the official AAFCO approval chain, such as the recent legislation in Montana. (This emerging-market dynamic may share some similarities to the early organic foods trajectory, when a patchwork of regulations was one of the factors that eventually drove the industry to seek out regulation via federal standards.)

The Hemp Feed Coalition, itself a product of state legislative action in Colorado, responded, reiterating its commitment to work with the agency, with caveats: “While we will continue to work closely with AAFCO and respect their position on evaluating the many technical concerns about using hemp as a feed product, we also appreciate the needs of farmers and ranchers who are not only looking to create more value for their crops but are also anxious for feed alternatives in this time of record breaking feed costs, shortages, and other critical supply chain issues.”

In November 2020 in Hemp Market Insider, a publication of data company Hemp Benchmarks, HFC Executive Director Hunter Buffington indicated that she sees concerns about intoxicants relaxing: “When I started this job, almost three years ago, the most common question that I got was, “Is it going to get my cows high?” she told Hemp Benchmarks with a laugh. “Now, three years into it, people are flabbergasted that [hemp] is not already approved for use as animal feed. So there’s definitely been a change in the marketplace.”

Growing Research Base Helps Farmers, Regulatory Process
Meanwhile, research into hemp agriculture and hemp for use in animal feed supports both the legislative process and the industry. The Multistate Research Project S1084 links 16 land-grant universities to communicate and share information and results. Ag departments in Colorado, Kentucky, Oregon, California, Kansas, and more are developing robust pilot programs and resource centers exploring agricultural practices, benefits, and economic opportunities in industrial hemp.

USDA now includes hemp in its funds dedicated to sustainable agriculture research. Oregon State University’s Global Hemp Innovation Center is one recipient of USDA funding. Although funding for hemp and other sustainable-ag crops, including organic farming, is historically far beneath the level of funding for conventional crops, research is a critical component of pathways to expansion and access to markets.

Resources
AAFCO: Association of American Feed Control Officials — A voluntary membership association of local, state, and federal agencies. Members are charged by their local, state, or federal laws to regulate the sale and distribution of animal feeds and animal drug remedies.
Center for Agricultural Hemp at Murray State University, Kentucky: Provides opportunities for research, education, policy, and innovation within the hemp industry to students and agribusinesses.
Colorado State University Cannabis & Hemp Research Center: Provides guidance and direction with respect to cannabis and hemp to CSU administrators, researchers, and employees, as well as communication to the greater (public) community by providing FAQs and Resources.
Feed & Grain: Magazine and digital products for the feed and grain industry.
FeedNavigator.com: News and analysis on the global animal feed industry.
FeedStrategy.com: News and analysis for the global animal feed industry.
FDA–CMV: The U.S. Food & Drug Administration Center for Veterinary Medicine — Link goes to “Animal Food & Feeds” resource and information page.
HFC: Hemp Feed Coalition — HFC’s mission is to gain Federal approval for hemp and its byproducts as animal feed to create new markets.
Oregon State University College of Agricultural Sciences Global Hemp Innovation Center: Advancing the research of hemp and its market potential.
USDA ERS: The United States Department of Agriculture Economic Research Center — Link goes to “Feedgrains Sector at a Glance” page.
USDA NIFA: The United States Department of Agriculture National Institute of Food and Agriculture — NIFA handles some aspects of USDA research funding for hemp projects.
USHGA: U.S. Hemp Growers Association — National nonprofit organization that educates hemp growers on the best agricultural practices for planting this crop, provides an information-sharing network and receives research from academia and other experts.

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Elaine Lipson is a Colorado-based writer and editor. She wrote The International Market for Sustainable Apparel, the first comprehensive market view of the sustainable apparel industry, in 2008, and Slow Cloth: An Alternative to the Politics of Production. Elaine was previously senior programming manager and acquisitions/content editor for Bluprint, an NBCUniversal company, and organic program director for New Hope Natural Media.

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