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South Dakota is the state with the largest hemp production nationwide

WAKONDA, SD (South Dakota News Watch) – South Dakota recently became the largest hemp fiber producer in the United States after becoming the third-to-last state to legalize the plant just three years ago.

“We have the highest production and the highest yield per acre, both,” said Bill Brehmer, board member of the South Dakota Industrial Hemp Association (SDIHA). “We’re going to try to keep that going next year. This will be our first year dominating this category.”

One of the people helping is John Peterson, treasurer of the SDIHA and a hemp farmer near Wakonda, about 50 miles southwest of Sioux Falls. He founded Dakota Hemp LLC in 2021 when hemp was legalized, and it was the second farm in the state to grow the plant.

Peterson, a fifth-generation farmer, planted 40 acres of hemp in his first year and has expanded his acreage to 450 acres in the 2024 season.

He started producing hemp after attending a meeting of people who were already growing the plant.

“When hemp farming was legalized with the 2018 Farm Bill, I became aware of it again and heard stories of farmers across the country growing CBD hemp, but not much for the fiber or grains yet,” Peterson said. “I received a random postcard in the mail announcing a meeting of industrial hemp growers in Hudson, SD in the spring of 2021. There were about eight farmers and 12 speakers in attendance.”

That was the beginning of Dakota Hemp.

“I remember calling one of the speakers on the way home from the conference to further discuss grain and fiber hemp and get more information as I truly felt this was the better option for my farm. I decided to grow 40 acres of hemp on our farm in 2021, a dual-purpose variety grown for both grain and fiber,” Peterson said.

After seeing the results of that first harvest, Peterson added hemp to his corn and soybean rotation. The farm has now been growing hemp for four years and plans to expand.

“I realized mid-season (2021) that this plant was going to thrive here in SD and fit very well into a large-scale rotation across the state,” he said. “I grew 130 acres of industrial hemp on my farm in 2022, nine varieties, including some of the first fiber variety trials in the Midwest that survived the drought surprisingly well.”

The farm also grows 1,000 to 2,000 CBD plants for the hemp products it produces, including hemp oils, gels and creams.

Hemp was legalized in the US in 2018 and in South Dakota in 2021

The 2018 Farm Bill legalized hemp cultivation in the United States. The law allowed the U.S. Department of Agriculture (USDA) to issue rules and regulations for commercial hemp cultivation starting in 2019 based on the Agriculture Improvement Act.

South Dakota passed a bill through the legislature to legalize the cultivation of the plant, but Governor Kristi Noem vetoed it. This makes South Dakota one of three states that have banned the plant despite federal legalization. After the law was amended and improved in early 2020, the South Dakota Industrial Hemp Program was launched in 2021.

Since legalization, hemp production in the state has grown to over 3,000 acres, with approximately 40 farms across the state, and plans are in place to continue to expand the number of farms and acreage under cultivation.

Dakota Hemp hemp harvest in 2023 near Wakonda, SD
Dakota Hemp hemp harvest in 2023 near Wakonda, SD(John Peterson / Dakota Hemp)

Hemp grows well in SD and helps other crops

South Dakota hemp farmers import plant varieties from other countries such as France and China for cultivation because cultivation was illegal in the United States between the 1930s and 2018.

“Well-developed hemp genetics from Canada and Europe work well in our latitudes,” said Ken Meyer, Chairman of the Board of Directors of SDIHA. “Hemp is a light-sensitive crop. The long daylight hours we experience in the summer are beneficial for growing hemp. Our lower summer temperatures compared to southern climates are a big help. And we have enough average rainfall, but not too much, which can lead to more problems with pests or diseases – especially in warmer climates.”

Farmers like Peterson who began growing hemp found that crop yields in South Dakota were better than in neighboring states due to soil and weather conditions.

“We can actually harvest almost twice as much,” he said.

Growing hemp in fields also has a positive impact on the soil and the growth of other crops. Peterson said that after growing a hemp plant, there is a noticeable difference in the organic matter.

“They’re putting really good organic matter back into the soil,” Peterson said. “Plus, we’re giving our microbes a new food source. They’ve never eaten these hemp roots before. … That’s activating really good numbers in our soil.”

The bottom end of a hemp root at Dakota Hemp near Wakonda, SD, on May 23, 2024.
The bottom end of a hemp root at Dakota Hemp near Wakonda, SD, on May 23, 2024.(Greta Goede / South Dakota News Watch)

Materials using South Dakota hemp

In South Dakota, farmers grow three different types of hemp: CBD, fiber, and grain and seed. South Dakota ranked #1 in grain and seed production in 2022 and is also #1 in fiber this year.

“We ended up finding enough farmers to plant over 2,500 acres of industrial hemp, making SD the second-largest hemp producing state in the U.S. in 2022, just the second year of our growth,” Peterson said.


CBD is a chemical found in hemp plants and can be used in a variety of products. Some popular products that CBD is used in:

  • Tinctures or liquids extracted from the plant, such as oil, are used as herbal medicine
  • Pills
  • Capsules
  • food and drinks
  • Creams and lotions
  • Fibers

Grain and seeds

The grain and seeds are harvested from the upper part of the hemp plant. Grains and seeds are used for the following purposes, among others:

  • Fabrics
  • Biofuel
  • Food and oil


Fibers are obtained from the stem of the hemp plant. The following products are made from hemp fibers, among others:

  • Bedding for animals
  • textiles
  • Paper
  • Hemp concrete

Top products from South Dakota

The hemp grown in South Dakota is used throughout the country for a variety of materials, primarily as animal bedding and as a building material such as hempcrete.

Hemp pet bedding is made from the stem of the hemp plant, also known as shiv. The compostable and absorbent material can absorb four times its weight in moisture and clumps when wet.

“The absorbency of the shives is higher than most other materials on the market. (People) like it because it quickly absorbs the moisture that is created,” Brehmer said.

Hempcrete is a biocomposite building material created by mixing and coating hemp shiv particles, which harden into a natural material commonly used to insulate walls, floors, roofs or windows.

“The hemp concrete is the insulator and very resistant to mold and termites. It allows the walls to breathe. So if moisture gets in, they dry out. That’s why they are mold resistant,” said Brehmer.

The plant-based building material is slowly becoming more popular across the country and the industry needs to expand to keep up with demand, he said.

“Ultimately, we will see in the future that more and more houses can be built with hempcrete. Once we get to the point where it is a quick process, (demand) can increase quickly,” Brehmer said.

The Value of the SD Hemp Industry and the Plan to Stay on Top

The total value of the 2023 hemp crop in South Dakota will be more than $23 million, Bremher said.

According to figures documented by the U.S. Department of Agriculture (USDA), hemp was a nearly $24 billion market nationwide in 2023. This value is expected to continue to rise in the coming years and reach $30 billion by 2030, the USDA said.

“2024 will be a big year for development and processing,” said Brehmer.

As hemp becomes an increasingly popular product, more and more farms are popping up across the United States, making it increasingly difficult for South Dakota to remain the number one producer.

This story was produced by South Dakota News Watch, an independent, nonprofit news organization. Read more in-depth stories at and sign up for an email every few days to receive stories as they are published. Contact us at [email protected].

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