$1 million federal loan supports Iowa hemp processor as state production remains limited

An Iowa company has received a $1 million federally backed loan to support a new hemp processing facility.

The financing, announced by the U.S. Department of Agriculture (USDA), supports Rock Valley-based Hemp Agra LLC’s investment in a HempTrain processing system. North West Rural Electric Cooperative received the loan to provide a pass-through loan to Hemp Agra. The funding is from the USDA’s Rural Economic Development Loan and Grant Program, which uses local intermediaries rather than direct federal lending, and is commonly used for rural manufacturing and value-added agricultural projects.

Hemp Agra is a privately held, family-led company founded last year. It is led by brothers Steve Vonk, president, and Dawson Vonk, operations manager.

Funding shift

The loan comes as federal support for hemp tied to environmental and climate initiatives has been pulled back, and also as hemp fields in Iowa continue to be negligible.

In recent years, hemp was positioned within “climate-smart” agriculture programs tied to carbon sequestration, soil health and sustainable materials. Those efforts included funding streams supporting research and market development. That changed in 2025, when USDA halted or restructured major climate-linked programs under the Trump administration, followed by policy changes that dismantled much of that framework.

Federal support is now flowing more narrowly through general rural development programs such as the one backing the Iowa project.

Iowa baseline

Hemp production in Iowa remains extremely limited. Data from the USDA’s National Agricultural Statistics Service show harvested acreage fell from roughly 120 acres in 2021 to about 50 acres in 2023, as licenses dwindled from roughly 80 growers in 2020 to fewer than 15 in recent years. In recent federal summaries, Iowa hemp acreage is often grouped into regional totals due to its small scale.

As the market shrank, Iowa also exited direct oversight of the crop. The state hemp program ended Dec. 31, 2024, with growers now required to obtain licenses directly from USDA.