As all of us in the hemp and CBD industry are aware, the month of October is harvesting time for all outdoor farmers. It means that the 2018 product will be flooding the market. If you’re in the bulk and B2B supply side of the business, it will, most likely, result in a significant drop in prices in whatever 2017 product you have left. So, the question remains of how much this product will be worth.
In any case, once the so-called Croptober starts at the end of October, these crops will represent the new standard of quality. With a surplus of product available, now is the time to move whatever you have left from 2017.
As past years have shown us, November and the first two weeks of December will be a busy time in regards to this year’s harvest sales. Going forward, from mid-December onwards, and all through February, there will be less product movement, overall. It is, in large part, due to the holidays.
Even now, buyers are looking towards the 2018 product, making it increasingly difficult to move the 2017 harvest. Given these circumstances, it’s highly advisable that you consider moving all flower and trim from last year because once the new crop comes in, the older product prices will plummet.
The Law of Supply and Demand
As with all other parts of the economy, buyers will be looking at this influx of new product and will think that the prices will naturally go down. Sellers, on the other hand, will be thinking about all the hard work they had to put in since April, and will not be so willing to lower their prices only for the sake of the buyers’ expectations.
What will mostly happen will be a compromise – as it usually happens in these cases, even if buyers in 2018 are hoping to expect prices to be at an all-time low. Producers have had somewhat of a hard time transitioning into the current market. From a more optimistic perspective, prices will begin to hold steady. Unfortunately, however, as more and more farmers go out of business because of this transition, the influx of product will start matching the demand.
As the market will begin to stabilize, buyers will hopefully start to understand that the lowest price on the market doesn’t always equate a good deal. As these things often are, investing in the cheapest product on the market is almost never an ideal long-term strategy.
Offering a fair market share to producers will, not only, provide more business opportunities down the line, but it will also ensure a steady and consistent supply of quality product. In principle, the natural law of supply and demand will even out the market, ensuring that more farms will survive the transition. It would be a win-win situation for everyone involved, going from producers to product developers, to retailers, and finally to the users, themselves. It is economics 101, after all – but only time will tell how things will eventually go down.
The hope is that the hemp industry will soon stabilize. But until that happens, make sure to move your 2017 product before the new one rolls in. If you want to keep yourself informed on these issues, please feel free to visit the Root Origins website, follow us on social media or email us at firstname.lastname@example.org.