South Dakota leads U.S. hemp industry, though USDA report shows Texas rapidly gaining ground
Hemp plant (NRCS photo, Brandon O'Connor)
South Dakota continued to expand its industrial hemp footprint in 2024 as Texas quickly gained ground, according to the U.S. Department of Agriculture's National Hemp Report.
As defined in the 2018 Farm Bill, the term 'hemp' is a cannabis plant with a no more than 0.3% concentration of the chemical that results in a high, known as THC.
According to the report, which was released on Thursday, South Dakota farmers planted 3,900 acres of hemp – a 22% increase from 2023. They harvested 3,700 acres, up 27.6%. Most of that growth came from hemp grown for fiber, a product for which South Dakota reigns as the nation's top supplier.
Texas farmers planted 4,900 acres, a 1,860% increase from last year. Only 1,500 acres of that was harvested, though.
Former Democratic state lawmaker Oren Lesmeister, a rancher from Parade, championed the bills that created South Dakota's hemp industry. He now serves on the South Dakota Industrial Hemp Association's board of directors. He said Texas' numbers mean little if farmers do not have a place to process their hemp.
'We're kicking a– and taking names when it comes to production and processing,' Lesmeister said.
South Dakota leads the nation in hemp processing and the production of hemp fiber, according to the report.
There were 13.6 million pounds of hemp harvested for fiber in South Dakota last year. That's a 14% decrease, even as the number of acres harvested, 3,550, increased by 22%. Every harvested pound was processed, according to the report. About 23% of the 59 million pounds of hemp processed in the U.S. was processed in South Dakota.
The mismatch between pounds harvested and acres planted is the result of lower per-acre yields for farmers. The average yield in the state dropped sharply by 30% in 2024, to 3,840 pounds per acre. Despite that, the value of South Dakota's fiber hemp climbed to $3.54 million, a 50% year-over-year increase, buoyed by a 73% rise in price per pound.
04-17-2025
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Dubrick's home and farm are across the street from the former home and farm of a local man he looked up to like a grandfather, who sparked his love of farming and is the namesake of his 1-year-old son, Calvin. Today, he makes all his financial decisions with his wife Lindsey, son Calvin and 3-year-old daughter Evelyn in mind. A plan that offered security while he grew his operation would be attractive, Dubrick said. In the early years, he aspired to triple his revenue to support this growing family. But whole farm revenue protection plans would only let him assume up to a 35% increase in his revenue compared to the previous year. It wouldn't be enough. 'If I knew I had a floor of what I was going to get any given year (like grain farmers), I would be more apt to invest in infrastructure and scale up more efficiencies,' said Dubrick. Many farmers don't even know about whole farm protection. Only seven of the nearly 1,600 agents who sell crop insurance in Illinois are licensed to sell whole farm plans, according to a Tribune analysis of federal agriculture department data. Agents aren't incentivized to sell whole farm plans because the 12 insurance companies pay them based on the amount of the premium they secure. It takes more time to tailor coverage to small, multi-crop farms that will inevitably pay lower premiums to insurance companies. Democrats on Capitol Hill introduced legislation in 2023 to subsidize insurance companies based on the complexity of a policy rather than the size. It would provide funds to train insurance agents on how to write whole farm policies. The legislation was intended to push insurance companies to give agents more commission for selling whole farm revenue protection plans, encouraging a safety net for small diversified farms. But the bill, called the Whole Farm Revenue Protection Program Improvement Act, didn't go anywhere. Instead, the largest 2% of policies account for over 36% — or $759 million — of the subsidies given to insurance conglomerates. So, when the Trump administration's Department of Government Efficiency posted an open call for 'insights on finding and fixing waste, fraud and abuse related to the US Department of Agriculture' on Elon Musk's X in mid-February, Schechinger decided to make a suggestion. She took to BlueSky, an X competitor: 'how about the $2B taxpayers send to private crop insurance companies/agents each year just to operate the program?' The government paid $2.2 billion in administrative and operating subsidies to crop insurance providers in 2022. It doled out another $1.5 billion in underwriting gains, which equal the difference between the premiums collected and losses paid out. 'I think (crop insurance) should be on DOGE's hit list, but not the money that's going to farmers,' Schechinger told the Tribune later that day. The USDA did not respond to requests for comment. If the government were interested in reining in insurance company profits, Schechinger said it could implement changes to the public-private partnership in the next farm bill. The comprehensive package of legislation that dictates agriculture policy is supposed to be updated every five years, but the bill that the country is operating under expired in 2023. A gridlocked Congress gave it two one-year extensions. The new expiration date is Sept. 30. Senate Democrats included the Whole Farm Revenue Protection Program Improvement Act in their latest farm bill framework. Meanwhile, a competing farm bill introduced by House Republicans sidestepped the issue. U.S. Rep. Eric Sorenson, a former meteorologist who represents parts of north and central Illinois, was one of four Democrats on the House Agriculture Committee who voted in favor of the Republican bill. His office did not respond to requests for comment. Neither the House Republican nor Senate Democrat proposals sought to rein in the insurance companies' claim to taxpayer dollars. 'The (National Sustainable Agriculture Coalition) doesn't have a policy that advocates blowing up the public-private partnership because of just how radical that is,' said Hackett, the coalition's policy specialist. 'You don't touch it.' Illinois Sen. Dick Durbin, a Senate Agriculture Committee member, had once championed a bill that would reduce crop insurance premium support for top-earning farmers. Instead of subsidizing 60% of the policy, the federal government would subsidize 45%. He abandoned the proposal, which came to be nicknamed 'the Durbin amendment,' in the latest farm bill negotiations after it failed to garner enough votes to include it in the two earlier farm bills. The senator and his team declined to comment on the matter when approached by the Tribune in April shortly before he announced his intent to retire. However, in recent months, his team shifted its attention from high-earning farmers to the impact of climate change related losses on the crop insurance industry. Durbin met with the Illinois Corn Growers Association in March to discuss how to insulate Illinois from premium hikes as southern states see more crop failures and file more claims. Crop insurance companies are already strategizing how to minimize their losses as climate change intensifies. Since they receive federal subsidies, they cannot withdraw from markets as easily as home insurance providers have in fire-, hurricane- and flood-prone areas. Last year, the federal government blocked insurance providers' attempts to pull out of West Texas, a region that's been scorched by heat and drought. 'This may be the first proverbial canary in the coal mine,' said Jonathan Coppess, a professor of agricultural policy at the U. of I. and an Agriculture Department appointee under the Obama administration. 'It's not an imminent collapse, but it is indicative of a very real, big and growing problem. Why are we insuring areas that cannot produce a crop year in and year out? I think that's a real challenge for the system.' As West Texas and other regions start feeling the impacts of climate change more intensively, premiums could rise nationwide. States like Illinois, which aren't anticipated to experience as intense extremes, may decide crop insurance isn't worth it for them, leaving only those in high-risk areas buying policies. This, Coppess warns, could be how the crop insurance industry comes tumbling down. The USDA did not respond to requests for comment, nor did U.S. Sen. Tammy Duckworth or Reps. Mike Bost, Nikki Budzinski and Mary Miller, who represent Illinois on the House Agriculture Committee. Meanwhile, without crop insurance, diversified farmers in the Midwest like Dubrick have gotten creative with nature. When a drought hit in summer 2023 and he lost nearly half of the revenue he was expecting for May through July, he was able to recoup some of his losses by pivoting to crops in other growing seasons. Corn and soybeans, on the other hand, have one optimal planting and harvesting window per year. Last year, Dubrick planted over 30 different crops to ensure he was prepared for whatever weather came his way. 'Peas like cool weather, but tomatoes and peppers want warm weather, and peppers do really well in drought. Tomatoes do better with some more moisture,' he said. 'The diversity is my insurance.' But Dubrick would feel more secure if there was a form of crop insurance that worked for him. 'Just point-blank honesty, the revenue safety net that we've leaned on the most is that my wife and I both have off-farm jobs,' Dubrick said. 'We can't lean into the farm because there's just too much unknown. Some years, I could be full time on the farm, and then the next year I would go bankrupt.'
