Performing Department
(N/A)
Non Technical Summary
The long-term benefits of North American hemp production include paths that effectively aid in the agricultural transition facing many rural communities. These include the production of hemp fiber and grain for human and animal food, oil, personal care products, industrial fluids, textiles, building materials, bioplastics, and substitutes for a variety of paper/paperboard uses. Knowledge of potential size and growth of consumer markets is critical because upstream supply chain success depends on consumer demand, without which there will be no financial markets motivated to provide capital investment nor incentives for farmers to grow hemp, processors to move raw materials to manufacturing inputs, or manufacturing to develop consumable products.The goal of this multi-institutional AFRI project is to analyze economic and behavioral aspects of consumption that elucidate, quantify, and inform market opportunities for already available and emerging hemp grain and fiber value-added products. The objectives are: 1. To determine the trajectory of historical demand and estimate demand for hemp food products by consumer demographic/behavioral characteristics and region using an Information Resources Inc. (IRI) data set with millions of observations on consumer purchases of hemp products sold in food retail outlets across the United States; and 2. To determine quality characteristic preferences (willingness to pay, WTP) of consumers for emerging hemp products, including construction materials, textiles, and grain products using a series of national discrete choice experiments, and including production, processing, environmental, and performance characteristics.
Animal Health Component
0%
Research Effort Categories
Basic
30%
Applied
70%
Developmental
(N/A)
Goals / Objectives
There remain unrealized economic and community development benefits of a vibrant industrial hemp industry in North America, even though Bowman's 2019 warning about hemp CBD flower was correct: "CBD, at some point, will turn into a commodity". The long-term benefits of hemp in the economy include the production, processing, manufacturing, and marketing of hemp fiber and seed for human and animal food, oil, personal care products, industrial fluids, textiles, building materials, bioplastics, and substitutes for a variety of paper/paperboard uses. Yet, the hemp industry continues to face hurdles along this entire value chain. Of particular interest to current and potential hemp stakeholders is additional knowledge about potential markets. The goal of this AFRI Foundational grant is to analyze economic and behavioral aspects of consumption that will elucidate, quantify, and inform market opportunities for already available and emerging hemp grain and fiber value-added products. Market opportunities depend on demand for hemp products by final and intermediate consumers for a significant array of new products. Specifically, consumer demand for final hemp products can be identified using revealed and stated preference methods.The objectives are:1. To determine the trajectory of historical demand and estimate demand for hemp products by consumer demographic/behavioral characteristics and region using a data set with millions of observations on consumer purchases of hemp products sold in retail food outlets across the United States; and2. To determine quality characteristic preferences (willingness to pay, WTP) of U.S. consumers for emerging hemp product applications, including construction materials, textiles, and grain products. We will include production, processing, environmental, and performance characteristics for each product.
Project Methods
We will gather from stakeholders will be gathered.We will derive an IRI based data set that includes hemp food products.We will use the household-based scanner data to estimate a hurdle demand model for hemp foods. The hurdle model was proposed by Cragg and is a variant of the Tobit model, which estimates the probability of being over a limit (making a hemp purchase) and the value of purchases or number of purchases in a single step. The hurdle model has been used to handle censored dependent variables, such as household consumptions of an infrequently purchased product.We will use a hypothetical online choice experiment, a methodology that is a good representation of non-hypothetical settings that provide estimates of marginal willingness to pay (WTP). WTP for hemp-based products will be elicited using either a double-bounded, dichotomous-choice (DBDC) contingent valuation or discrete choice experiment (DCE) approach. DBDC and DCE responses can both be analyzed using a random utility model.