Farmers Face The Next Housing Crisis As Demand Shifts From Ethanol to Lithium
Corn is the most common crop grown by American farmers. In 2019, America grew 91,700,000 acres of corn. Just for a means of comparison, that’s equal to about 69 million football fields of land. There is certainly no shortage of corn in America.
In fact, Americans love corn so much that they try to put it into all different types of food and industrial products.
- Food Products: corn on the cob, corn tortilla shells, and corn chips are not the only foods we use that have corn. Corn starch, high fructose corn syrup, corn oil, and other corn additives are commonly used in food production. Corn is also commonly used as animal feed.
- Industrial Products: different types of corn-based products are used across building materials, home goods, manufacturing, medicine, and fuel applications.
Corn is used for over 4,200 different purposes, and new uses are being discovered every day. The usage of corn is not going anywhere.
What we need to start thinking about as a society is: how is the demand for corn going to change over the next decade?
Inevitable Changes in Demand
When we look at the demand for corn, we can split it into 3 main categories.
- Food and Beverage (10%)
- Livestock Feed (45%)
- Ethanol (44%)
These statistics show that 89% of the corn being produced by American farmers is not going directly into the mouths of humans. Most of the corn in America is being used to feed our animals and power equipment.
Although plant-based proteins are becoming more popular, the US has seen a consistent demand for meat (pork, poultry, beef, etc).
The Looming Inflection Point
Over the past decade, there has been an ideological shift. The world is aiming to become more sustainable, and the electrification of vehicles is one of the futures the world has chosen. It is not a matter of “if” we switch over to electric vehicles, it’s a matter of “when.”
Our society may have collector cars that run on traditional petroleum. But, by and large, within the next decade, most vehicles that come off the production line will run off of electricity or hydrogen. Many companies have committed to full electric production lines by 2030.
The adoption of electric vehicles will reduce the consumption of gasoline by double-digit percentages. Because ethanol is the most prevalent additive in gasoline, there will be a mirrored reduction in ethanol demand. This will have a direct impact on farmers that grow the corn used for ethanol.
If 44% of the acreage in America grown for corn goes toward ethanol, then that means there are at least 40,000,000 acres going toward ethanol production. Which constitutes over $29.7 billion in economic value to farmers based on $738 an acre of revenue. Over the next decade or so, a sizable portion of the 40 million (ish) acres are going to have to be repurposed toward a new crop with new markets.
The question is: what new crop and what new market?
Introducing Industrial Hemp
Although ethanol is a biofuel, our shrinking dependence on it is a good sign. This tells us that our reliance on petroleum as a fuel source is decreasing. This is great news for our environment and carbon footprint.
If tens of millions of acres of American farmland are going to need to transition from corn to something else, our society should focus on finding and adopting a crop that has multiple uses that do not overlap with existing agriculture markets. There quite simply are not more mouths to feed, human or livestock.
Fortunately, much like corn, hemp has thousands of different uses. Industrial hemp has been used for thousands of years to make strong, lightweight, and cost-effective products.
By and large, the industrial hemp plant can be split into 2 main crops.
- Hemp grain – which comes off the top of the plant. Hemp seed can be used for hemp protein and hemp oil for food and industrial markets. The amount of protein per acre from industrial hemp rivals the cattle markets.
- Hemp stalk – which is split into two parts: fibers wrapped around the stalk and hurd is the inner woody core. Hemp fibers and hurds can be used as additives to plastics, rubbers, foams, building materials, papers, ceramics, and other raw materials to increase the performance and reduce the carbon footprint of manufactured products.
The real opportunity for companies building industrial hemp supply chains is in finding applications for the stalk of the hemp plant. Having the foresight of this shift in market needs, farmers can slowly begin converting their acreage over from corn as long as there are buyers of these products readily available.
The company that masters the product development of hemp materials will be able to add value to farmers and customers as they grow their supply chain. Heartland is properly positioned to capitalize on this opportunity.
Heartland’s Impact on Agriculture & Manufacturing
Over the next decade, corn demand is going to be reduced by millions of acres. Without a reliable crop to transition into, American farmers are at risk of losing their family business and legacy. Farmers need to start looking at alternative crops today, so a decade from now they are properly prepared for seamless transition.
Industrial hemp is the new agricultural good that is primed to make a positive impact in dozens of markets. But, farmers should ensure that they are working with an industrial hemp partner that can help them in the transition process from corn to hemp. A good partner will:
- Provide farmers with standard operating procedures and best practices.
- Help farmers access credit and insurance for their industrial hemp crops.
- Create a reliable distribution channel and simplify logistics.
- Work alongside customers in product development to make hemp valuable to their manufacturing.
The Heartland team has been working tirelessly to ensure that farmers can get answers from us to all of these questions. Since Heartland is creating America’s most reliable industrial hemp supply chain, we have the pleasure of working along side great people to develop industry standards.
We have worked with agricultural experts and agronomists to better understand how industrial hemp impacts farmers and their land. This work has allowed us to develop industry-leading standard operating procedures to reduce risk and increase revenue for farmers.
We have worked with other experts across manufacturing, supply chain, plastics, and automotive to make sure that our hemp additives make a positive impact on the raw material supply chains of manufacturers.
Our focus is on engineering hemp materials for plastics. These hemp additives make plastic stronger, lighter, cheaper, and more sustainable. We ensure that the hemp materials that come off our farms are developed into a format that can be easily infused with recycled or virgin plastics.
Long term, Heartland will participate in the transition of millions of acres of corn to industrial hemp. American farmers who start working with industrial hemp today will be miles ahead of their competitors who start testing with hemp years from now.
Heartland always has our door open to talk with farmers who are seeking the next generation of reliable row crops. With ethanol usage going down, industrial hemp is primed for a positive impact across American agriculture.
Join us in making a world out of hemp.