Sunday, April 17, 2022

"Lessons learned: weighing the costs and benefits of vertical farms"

From AgFunderNews, April 15:

Peter Tasgal is a strategic consultant to the food and agriculture industries and co-founder of Farmbook Project, based in Boston, US.

The views expressed in this guest article are the author’s own and do not necessarily represent those of AFN.


The recent publicity of French vertical farming company Agricool’s placement into receivership has shed light on challenges in the vertical farm industry. 

Outputs from vertical farms can be highly precise because the inputs and growing environment are highly precise. But achieving a high level of precision can be more costly than an automated greenhouses, and much more costly than growing outdoors. That is beacuse of the type of farming structure vertical farming required and the specific set of required ingredients – known collectively as the “recipe”: seed, light, nutrients, temperature, humidity, carbon dioxide, labor and time.

As such, it is important to weigh the benefits compared to the costs of such precision when deciding to pursue vertical farming.

Cost considerations
Vertical farms are complex systems which require lighting, fertigation, heating, ventilation, air conditioning, mobility, software, and artificial intelligence. All of this has to be well-integrated to achieve the desired results.

Combined, those factors can drive the capital expenditures of a vertical farm up to 4x (or more) of the cost of a high-tech greenhouse, according to Daniele Modesto, CEO of ZERO Farms in Italy. Modesto noted that while automated vertical farms require less labor than traditional or greenhouse farms, they require more highly-skilled (and highly-paid) workers: engineers, software developers, and agronomists, for example. Pricing of products from a vertical farm, he said, needs to be 2x that of organic products in Italy.

The figures Modesto outlined seem to play out similarly in the US. According to a CNBC article last month, a 180,000-square-foot vertical farm built by seasoned operator Fifth Season in Columbus, Ohio will require a $70 million expenditure. This equates to $17 million per acre. 

Vertical farms grow in layers, therefore the expenditure per square foot of growing space is lower than a high-tech greenhouse but still significantly more expensive....

....MUCH MORE