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WHAT IS VERTICAL FARMING?
While indoor growing is not a new phenomenon, greenhouses have been used for hundreds of years, the concept of indoor vertical farming is more recent. Vertical farming operations, sometimes called “plant factories” are farming or plant production systems and locations whereby crops are produced inside of a building, primarily or solely on artificial light and make use of vertical as well as horizontal space. Often times these vertical systems rise many stories inside. In these systems, because there is usually a lack of natural sunlight, and always a lack of natural rainwater, growers need to monitor and control light, temperature, water, nutrients, humidity, and other metrics depending on the crop or crops being grown. Growers need to recreate and mimic natural and ecological processes in order to be successful.
Some Vertical farming systems even include animal production, but this is not that common a practice. In these setups, fowl (usually chickens) or pigs are raised on the floor level and plant crops are raised on higher levels. Other systems involving animals raise freshwater fish such as tilapia, striped bass, and trout. Crustaceans and mollusks like crayfish, mussels, and shrimp are grown in other systems. Rabbits raised for meat, may become another animal that can be incorporated into the indoor farming landscape of vertical farms.
Vertical farming typically takes place in urban areas, often utilizing and repurposing abandoned manufacturing buildings, and warehouses. This can be a great and viable solution for cities that have an abundance of vacant or underutilized commercial buildings. While not yet a widespread phenomenon, vertical farming is proposed to be a solution of the future to solve food scarcity issues, overutilization of land for farming, as well as to help in the revitalization of some urban areas. They are also seen as a possible solution to help with environmental issues.
Benefits of Vertical Farming
The actual current, and future potential benefits to vertical farming are numerous and only continue to expand. Probably the primary benefit to vertical farming is that it can be done literally anywhere on earth there is a space dedicated to its function. This can be in densely populated urban areas, industrial areas, or even remote areas. Vertical farming can be one of the solutions to increasing the world’s food supply. With a population projected to exceed 9 billion (up to 9.8 billion by some estimates) by 2050, most of whom will live in urban areas (up to 68 percent), more food is going to have be grown and produced. The United Nations estimates that this will require an increase of up to 70 percent of current food production numbers to be able to feed the expanding population. With impending climate changes, all of this increased food production will need to be done in an environmentally responsible and sustainable way as well.
Crops grown in vertical farms are often grown using fewer inputs than their field grown counterparts. Vertical farming systems to not contribute to unwanted runoff and erosion the same way that large-scale, conventional agriculture often does. Estimate range depending on crops grown, but one acre of vertical farming can produce the equivalent of 10-20 acres of traditionally farmed space using much less water (up to 90 percent less by some estimates), fertilizers and pesticides. Some of this efficiency has to do with the fact that crops can be grown year-round without regard to seasonal cycles, but primarily because of the more efficient use of space and resource allocation. It is estimated that a vertical farm with the footprint of one city block and a height of 30 stories, could potentially produce enough food for up to 10,0000 people annually using technologies that already exist.
Vertical farming does not rely on the weather or time of year. It is not subject to extreme weather events that can wipe out conventional crops, such as flooding or droughts. Other natural destructive forces such as grazing from animals or being decimated by localized pest outbreaks do not occur in vertical farming systems. This is not to say that pests are not possible, they are just easier to preclude and treat in indoor growing systems.
Another benefit of vertical farming has to do with the proximity between the production of the crops and the location of their end-user. Often, produce grown in vertical farms will only need to travel a few miles to reach the market, restaurant, or customer where it will be sold. This has health, environmental and even cost-savings benefits. Produce consumed sooner after harvest has higher nutrient values as well as being fresher and more eye appealing. Products that do not have to travel as far do not use as much fossil fuel to get to where they are going. Shorter distances of travel often will mean lower transportation costs and ultimately lower product costs. This trifecta of benefits makes vertical farming a quite attractive solution for getting produce into urban areas especially. It can also contribute to the equitable distribution of food around the world as vertical farms can be located in some of the world’s most impoverished areas where starvation is rampant, and food is either difficult to produce or logistically challenging to transport to.
How much does vertical farming cost?
There is no easy answer for the question of how much vertical farming costs. There have however been many attempts to quantify that very question, and by looking at actual examples, an average can be established. Actual costs will of course depend on regional differences in property costs, utility costs, and labor costs primarily as well as crop-specific costs. Conventional, field-grown produce costs an average of $0.65 per pound. Vertical farming costs are much higher, and close to greenhouse or hydroponic production costs, coming in at about $3.00 per pound and $2.30 per pound, respectively. These costs are all still considerably less than the costs of raising produce in container farms, which some in at about $7.00 per pound. This is a newer phenomenon making use predominantly of used shipping containers.
Using lettuce as a typical crop example and utilizing data from an actual New Jersey vertical farm, the “all-in” cost per pound of production is just over $3.00. This assumes an up-front cost for the physical space and equipment, factoring in depreciation, to be $1.30 per pound of production. Labor costs in this example, including all benefits, taxes, insurances, etc. to be $1.15 per pound. All other material costs, and continual input costs is calculated to be up to $0.65 per pound. Again, this is based on one crop at one facility, so actual costs elsewhere will vary, but it is good as a baseline number.
Logically, the costs of setting up and running a vertical farm will vary based on size of the operation and level of technology. Utilizing research done on several vertical farms in the United Kingdom, we can get an idea of costs per square foot or square meter (note: while not exactly equivalent, one square foot is approximately 1/10th of a square meter, so numbers in this section are rounded). A vertical farm of up to 500 square meters (5,000 square feet), that relies mostly on manual labor for production and harvesting can expect to spend between $1400 to $1700 per square meter ($140-$170 per square foot). A vertical farm operation of between 500 and 2,000 square meters (5,000 to 20,000 square feet) can be expected to cost from $1700 to $2400 per square meter ($170-$240 per square foot). These cost estimates assume that this size of operation will be largely a hybrid of manual labor and automated technology. A large vertical farm of between 2,000 and 10,000 or more square meters (20,000 to 100,000-plus square feet) will likely rely heavily on automation and technology for all phases of production. Costs for operations in this range are estimated to span between $2,000 to $2,800 per square meter ($200-$280 per square foot).
Ultimately, the costs of operating a vertical farm will go down over time. Like anything else, the more vertical farms proliferate the urban landscape, the more people will be vying to supply them. This will mean that supply costs will go down as competition goes up. Technology costs will also inevitably go down over time as vertical farms’ energy efficiency increases. The continued advancements in LED lighting technologies will also help to lower costs over time, LEDs are the predominate source of lighting in vertical farming operation, and other than labor, are one of the most costly aspects of running and operating a vertical farming operation.
Are vertical farms profitable?
It would be the exception to the rule to have a vertical farm that was profitable from day one. With all of the capital required to invest on the front end, there will be some time before reaching the break-even, then profitable points. Having said that, vertical farming can be a profitable endeavor if done strategically and thoughtfully, so long as there is not the expectation of an immediate return on investment.
Most preliminary research suggests that vertical farming operations will reach a point of profitability within about seven years. This discourages some investors and would-be proprietors who have a more “traditional” view of not investing in anything with less than a five-year ROI. The difference here, and cause to take a bit of a longer view is that there will always be a need for food, and that need will only continue to grow, especially as urban agriculture and indoor farming systems continue to proliferate to meet this demand. There is however another role for vertical farming that could result in profitability sooner.
Growers that wish to employ vertical farming techniques, but do not want to grow food crops, might carve out a profitable niche for themselves by growing transplants and starter plants on a large scale. Starter plants are a high value product that can be grown successfully in high density growing operations using vertical farming techniques. Selecting the types of plants that are in higher demand in each respective geographical area will of course yield higher results than taking the “if you grow it, they will buy it” approach. Depending on region, these could be floriculture crops, agricultural plants, ornamental horticulture starts, or cannabis/hemp starts.
Not all vertical farm operations will be profitable. Selection of crops that are suitable for indoor or alternative growing methods such as hydroponics, aeroponics, aquaponics, or even fogponics, are the first key step on the path towards profitability. Plants that reach a finished or saleable state sooner are optimal for vertical farming. Scale is an important obstacle to surmount as well. Profitability in vertical farming will only be achieved when properly scaled. Considerations such as market size and saturation, crop varieties suitable for indoor production, and available technologies that are appropriate and not cost-prohibitive will all have to be tackled in order to reach a point of profitability.
Best Books on Vertical Farming
With vertical farming being such a new form of cultivation, it can be difficult to find reputable sources. There are several websites devoted to learning more about it and some companies out there doing a really great job giving it a go (check out Plenty.ag). There are a few solid sources, written by individuals that have experience in researching vertical farming and have written books worth looking into. The preeminent book on the topic is largely agreed to be The Vertical Farm: Feeding the World in the 21st Century by Dickson Despommier. Originally published in 2010, and released for its 10th anniversary in 2020, this is a great place to start to learn more about vertical farming options and solutions.
Another notable book on the topic is Plant Factory: An Indoor Vertical Farming System for Efficient Quality Food Production by Toyoki Kozai. This book is a scholarly publication with a high price tag but is based on research from multiple scientists and could be considered the definitive book on the topic covering everything from plant physiology to running a vertical farming business. Despommier and Kozai collaborated on a book, along with researcher James Faust entitled, Instant Insights: Vertical Farming in Horticulture. This book is a review of five different research projects exploring various aspect of technology in vertical farming operations and is a good supplement to either or both of their other works.
A book that is a case study on a prosperous vertical farming business, and essentially a how-to book on what to do to get a vertical farm up and running is Business Plan for a Vertical Farming Startup: Market Research, Business Model, Economic Model, and More by Ramiro Blanch. The costliest title of this whole list, this book is for those ready to make the leap into vertical farming by following a successful example.
For beginners or those just looking to find out a bit more information on the topic, try Derek Fell’s book, Vertical Gardening: Grow Up, Not Out, for More Vegetables and Flowers in Much Less Space. It has a lot of great DIY tips for those that might just want to experiment with the concept for a while before expanding into a full-on vertical farm enterprise.
A Final Thought on Vertical Farming
The need to grow and produce food will never go away. The need to find environmentally sustainable solutions to the world’s current and future challenges is not going away. Vertical Farming is a solution to both of these challenges. Local and regional governments and municipalities will need to incentivize the development of vertical farming sites to get them underway sooner rather than later. Grant monies should be made available by federal and central governments to facilitate this. Universities and non-profit organizations should begin to study these systems in earnest and find continued efficiencies and ways to improve upon them. Vertical farming is the future of urban farming and may in time become a viable competitor to conventional agriculture.