Source: UNIVERSITY OF VERMONT submitted to
PARTNERSHIP: INVESTIGATING MARKET OPPORTUNITIES FOR NOVEL HEMP BASED PRODUCTS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
NEW
Funding Source
Reporting Frequency
Annual
Accession No.
1030852
Grant No.
2023-67024-40336
Project No.
VT-0102CG
Proposal No.
2022-10669
Multistate No.
(N/A)
Program Code
A1641
Project Start Date
Aug 15, 2023
Project End Date
Aug 14, 2027
Grant Year
2023
Project Director
Conner, D. S.
Recipient Organization
UNIVERSITY OF VERMONT
(N/A)
BURLINGTON,VT 05405
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)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6031730209050%
6071730301050%
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.

Progress 08/15/23 to 08/14/24

Outputs
Target Audience:Our primary audience for this project is stakeholders in the North American hemp industry, including hemp producers and processors in both the Canada and the United States. Secondary audiences include other researchers as well as agriculture regulatory professionals in U.S. state and federal governments and Canadian provincial and federal governments. Changes/Problems:The major change during this reporting period was a change in Project Director (PD). The original PD, Jane Kolodinsky, transitioned to an Emerita position in Fall 2023 and the day to day leadership moved to David Conner. Outside of this project, we continue to keep an eye on the shifting regulatory landscape for hemp in the United States. The passage of a new farm bill in the next year may have impacts on our work. What opportunities for training and professional development has the project provided?In its first year this project has already engaged four graduate students. University of Vermont Ph.D. graduate Hannah Lacasse completed her degree in the first year of this grant, and a paper incorporating findings from this project was part of her dissertation. Dr. Lacasse presented those findings at the July 2024 meeting of the Agricultural and Applied Economics Association in New Orleans, Louisiana. University of Alberta masters' candidate Abigail Boahemaa has been a key member of the stated preference team. She participated in the development of both survey instruments and is currently analyzing data from the completed survey on water bottles. Ms. Boahemaa will complete her degree before the end of the year. We have engaged two new graduate students to begin their work on this project in its second year. They will be based at the University of Arkansas under the supervision of Brandon McFadden. How have the results been disseminated to communities of interest?We made our first presentation on project findings this past July at the annual meeting of the Agricultural and Applied Economics Association in New Orleans, Louisianna. We plan to present findings to other researchers and to stakeholders as we delve further into research in Year 2. What do you plan to do during the next reporting period to accomplish the goals?The University of Alberta branch of the stated preference team will analyze the results of both surveys this fall. New graduate students at the University of Arkansas are currently in training, with plans to develop and launch U.S.-based stated preference surveys this year. Our revealed preference team is currently estimating a double hurdle model to assess characteristics of hemp-purchasing households. We intend to share these results and preview upcoming plans at several conferences over the next year.

Impacts
What was accomplished under these goals? In year one we launched both the revealed and stated preference arms of the project. The stated preference team began its work in Canada with a national survey of 1,000 respondents. The survey assesses willingness-to-pay for hemp-derived plastic beverage bottles. We have completed the survey distribution and have begun analyzing results. At the same time, we are conducting a second national survey in Canada about willingness-to-pay for hemp-derived plastic clamshell takeout containers. We will analyze the surveys in tandem with the goal of determining if there are differences in willingness to pay for hemp plastics between different products. The revealed preference team built on our previous research into hemp products using IRI data. Graduate student Hannah Lacasse successfully defended her Ph.D. dissertation in the summer of 2024, which included a paper looking at the relationship between consumer health characteristics and hemp purchases. This paper had its roots in previous investigations but came to fruition under this grant. We kicked off new work for this project by searching the IRI database for hemp products using a keyword algorithm. We identified approximately 1,500 hemp products each year and produced a variety of summary statistics on hemp sales by category, state, and year. Our team is currently exploring Mintel data, which provides detailed information on product attributes and will provide deeper insights into hemp product availability and characteristics. We have also laid the groundwork for future statistical analyses by exploring possible methodologies. We investigated the possibility of using joinpoint regression models to study changes in hemp demand over time as a function of demographic and/or behavioral characteristics. Joinpoint regression has been used in the medical literature to investigate trends over time where the trends are not necessarily smooth but contain "join points". The method seems promising for fulfilling the first aim of the grant. We have also reviewed recent literature on methods and applications for discrete choice models, including enhancements to DCE models based on machine learning methods.

Publications

  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Abigail Danso Boahemaa, Ellen Goddard, Public Demand for Hemp Plastics as a Sustainable Single-Use Packaging Solution in Canada, paper presented at the Canadian Agricultural Economics Society Annual Meeting, July 2024, Winnipeg.
  • Type: Conference Papers and Presentations Status: Published Year Published: 2024 Citation: Zheng, Y., H. Lacasse, J. Kolodinsky, T. Mark, J. Buzzas, and C. Whitehouse. Marijuana Legalization, Hemp Policies and Demand for Hemp and Cannabinol Foods. Agricultural and Applied Economics Association Annual Meeting. New Orleans, LA. July 28-July 31, 2024