After getting burned, U.S. farmers in Indiana start their own co-op

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When enthusiastic farmers in the U.S. state of Indiana got the chance to grow fiber on guaranteed contracts for a processor across the state line in Kentucky, they jumped at the chance. Last year a group of farmers grew about 500 acres for Sunstrand, a Louisville, Kentucky-based fiber processor, only to see the company go bankrupt, leaving them stuck with their crops.

Now, six farmers have joined to set up Heartland Hemp Cooperative (HHC), with plans to build their own processing facility. Co-founders Michael Morrow and Marty Mahan said they hope to bring the majority of previous Sunstrand growers onboard, with a goal to expand to 20 members for the 2021 season.

Evolving mission

“I had been trying to generate interest in a cooperative for several years,” said Morrow, vice president of the member-owned co-op.

Mahan, HHC’s president, said the idea turned into a mission as he and Morrow heard more and more tales of broken contracts last year among farmers in Indiana’s fledgling hemp industry.

“We started with the goal of solving a problem that many hemp farmers are facing – that the industry as a whole is underdeveloped – especially for farmers who are growing fiber varieties,” Morrow said. “Our goal is to help shape the industry as it grows and to ensure that farmers are keeping the largest possible percentage of their market dollar.”

Tri-state business model

Beyond that goal, HHC is based, in part, on the fact that there are currently no fiber processors in the U.S. Midwest. The cooperative anticipates servicing farmers in southern Indiana, and those over the state line to the south in Kentucky and in Ohio to the east.

The co-op is continuing to develop a seed-to-shelf business supply chain model, working out such fundamentals as the maximum distance farms should be from the processing center, said Mahan, who also serves on the board of directors of the Indiana Farmers Union.

Heartland will begin with basic products such as hurd for animal bedding and hempcrete construction. The co-op continues to explore options for both the hurd and the technical fibers, Mahan said.

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