Hemp Byproducts Eye Animal Feed Market as U.S. Industry Wrestles With Oversupply

The U.S. hemp industry is exploring animal feed as a potential new market for surplus hemp biomass and processing byproducts, as producers continue to face an oversupply of material and limited demand, according to a report published by Dairy Dimension on 29 September 2026.

The oversupply traces back to rapid expansion in cultivation that followed the 2018 U.S. Farm Bill, particularly for CBD-rich hemp. According to USDA data cited in the report, U.S. floral hemp production reached 33.2 million pounds in 2025, representing a 60% increase from 2024, as production growth outpaced demand.

Nutritional Potential of Hemp Byproducts

Hemp processing generates several materials — including hempseed meal, hempseed cake, leaves and spent biomass — that contain protein, fats and fiber potentially useful in livestock diets. The report states that hempseed cake contains approximately 34% crude protein and around 12.7% residual lipids, along with a favorable fatty-acid profile.

Research in dairy cattle has yielded encouraging results. One study cited in the report found that diets containing up to 143 grams of hempseed cake per kilogram of dry matter increased energy-corrected milk yield, though higher inclusion levels were associated with dilution of milk fat and protein percentages. A University of Manitoba study found that hemp meal could replace canola meal at up to 10.2% of dietary dry matter without negative effects on feed intake, rumen fermentation, digestibility or blood metabolites.

Cannabinoid Transfer and Withdrawal Periods

Despite the nutritional potential, the transfer of cannabinoids — including THC and CBD — into animal products remains a central concern. A 2022 study involving dairy cows found measurable THC, CBD and related cannabinoids in milk after animals consumed hemp silage, according to the report.

Oregon State University researchers subsequently fed nine Jersey cows a diet containing 13% spent hemp biomass for 28 days. Cannabinoids were detected in milk during feeding, but became undetectable approximately 12 days after the hemp biomass was removed. The researchers concluded, as reported, that a two-week withdrawal period could address the consumer-safety concern under the conditions studied.

A separate beef-cattle study found no adverse effects on animal behaviour or weight gain. The report states that cannabinoids accumulated in fat tissue but cleared from tissues after a 33-day withdrawal period, apart from trace CBD detected in adipose tissue.

Regulatory Progress Remains Incremental

In 2025, the Association of American Feed Control Officials (AAFCO) recognized mechanically extracted hemp seed meal as an animal-feed ingredient for laying hens, permissible at up to 20% of the diet provided it meets specified cannabinoid limits. The report notes this decision does not constitute blanket approval for all hemp-derived feed ingredients, and that CBD-rich hemp material and spent biomass from cannabinoid extraction remain subject to additional regulatory concerns.

The U.S. Food and Drug Administration has continued to identify unresolved safety issues surrounding CBD and cannabinoid-containing animal food, while seeking additional information and safety data, according to the report.

Fragmented State and International Rules

At the U.S. state level, the report identifies Alaska, Tennessee, New Jersey, Ohio, West Virginia, Montana, Kentucky, Oklahoma, Texas and Virginia as having adopted policies addressing certain hemp-derived feed products, though requirements vary by state, animal species and product.

Internationally, Canada generally requires separate assessment of proposed hemp feed ingredients. In the European Union, qualifying low-THC hemp varieties can be cultivated under applicable rules, while hempseed-derived products may enter the feed market under existing regulations. Australia currently maintains restrictions on industrial hemp as stock feed, although the report notes the issue is under review — an Australian Senate committee in 2026 recommended examining regulatory changes related to the hemp industry, including potential animal-feed applications.

Outlook

The report concludes that hempseed meal and other low-cannabinoid fractions may offer the clearest near-term commercial opportunity, while cannabinoid-rich spent biomass will require additional scientific evidence and regulatory approvals. Feed manufacturers must also determine whether hemp-derived ingredients can compete economically with established protein and fiber sources.