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Market Analysis of Industrial Hemp Legalization in Cattle Feed

Author

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  • Melchor, Matthew M.
  • Britton, Logan L.
  • Kleinhenz, Michael D.

Abstract

Industrial hemp legalization for cattle feed represents an emerging trend with implications for both crop and livestock markets. This paper uses a single-market equilibrium displacement model to estimate the short-run effects of federal approval of hemp in cattle feed. Baseline hemp prices and quantities were constructed from USDA National Hemp Reports, and adoption scenarios were simulated using calf crop data and feeding trial inclusion rates. Results show that legalization would generate modest but meaningful market effects: hemp prices increase by 0.51–2.57% and production expands by 0.23–1.17% across adoption scenarios. Revenues rise by 0.75–3.8%, with gains in both consumer and producer surplus under a horizontal demand shift. These findings suggest that livestock feed could help stabilize a volatile specialty crop while potentially delivering animal health and beef quality benefits. Policy clarity, expanded feeding trials, and additional data are needed to evaluate hemp’s broader role in the U.S. food and agriculture system.

Suggested Citation

  • Melchor, Matthew M. & Britton, Logan L. & Kleinhenz, Michael D., 2025. "Market Analysis of Industrial Hemp Legalization in Cattle Feed," Western Economics Forum, Western Agricultural Economics Association, vol. 23(2).
    • Handle: RePEc:ags:weecfo:371488
    DOI: 10.22004/ag.econ.371488
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