It is no surprise that the price of Biomass has been decreasing lately. It doesn’t take an Economist to explain why this is happening, it’s simply supply and demand at its finest. There is a common theme going around the hemp industry, one that is causing issues with the first ever live Hemp Auction (which is being held in Franklin TN). That issue is uncertainty.
Both buyers and sellers are not sure where the price floor is. Farmers are pushing their product to be sold and buyers are trying to hold off to see how low it will go. I would like to reassure people that the price will bottom out and rebound soon! Here is why:
Data Source: Hemp Benchmarks® is a division of New Leaf Data Services
This graph shows two alarming trends and one reassuring. First, since July the price has been dropping steadily. The second alarming trend is the trend line itself. It shows that the market is going to continue to drop throughout November/December. Very Alarming.
The one thing this fails to depict is the total harvested crop. We are just past peak harvest season for most of the states. That means most farmers have harvested their crop and they are trying to sell it now. There is an over-saturation (supply) in the market and not enough buyers (demand). Causing the prices to go down. The prices should rebound, though. As harvesting starts to decrease and the over-supply of hemp biomass starts to leave the market, the price will increase. I believe that the price will bottom out towards the end of December and start to rebound in Mid January 2020!
Please do not let the falling prices scare you! It will take time for some sellers to sell their crop but those who wait might see a hefty reward!
