CAN VERTICAL FARMING PROFITABLE?

VERTICAL FARMING in Malaysia is a new subject and it was promoted as a future technology on farming for food production and known in many other developed nation. Vertical farming is the practice of growing crops in vertically stacked layers. It often incorporates controlled-environment agriculture in which aims to optimize plant growth and soilless farming techniques such as hydroponics, aquaponics and aeroponics. Although vertical farms producing leafy greens are receiving most of the press coverage but there are a variety of other crops being being grown and innovative growers are finding these crops to be profitable. When many of blog readers think about a vertical farm what picture comes to mind where most people think of vertical farms as indoor growing operations that produce leafy greens, primarily lettuce. This blog in "Anim Agriculture Technology" I write about frequently asked question (FAQ) regarding can vertical farming be profitable to venture.

There are both small and large leafy greens vertical farms in which some of them are going out of business and some new ones are opening up. All of them have similar challenges. For me as agronomist the main challenge is that even though they can produce a lot of leafy greens because they are able to stack the plants in which there is a bottleneck in terms of how fast they can produce the crops. The bottleneck is tied to the plant genetics. With the current plant genetics and cultivars that most vertical farm entrepreneurs are using and it is very hard to outperform the lettuce crops coming out of the field.  For many of the cultivars being grown in the field, including salad, red leaf lettuce and baby greens are the same seed is being used in vertical farms. In order for the leafy greens produced in vertical farms to actually gain significant market share in which the genetics have to be changed in those plants. This can come through the conventional breeding or gene editing or through targeted breeding using molecular tools. A new set of cultivars is needed as a new set of genetics that are specific for indoor farms. Right now most growers are using the genetics that are good for field production. These field cultivars have high plant uniformity in terms of growth under a large variability of environmental conditions. The field genetics enable plants to look the same even if there is a lot of variability in the environment. One of the biggest challenges facing vertical farms growing leafy greens is the lack of cultivars bred specifically for these production facilities.

In the vertical farms it provide a stable environment and the types of genetics that are needed are specifically for an environment that can be controlled. The genetics for field crops of maintaining high uniformity and minimizing large variability are not a concern with vertical farms. The market for breeding companies to develop varieties specifically for the vertical farms which is small. There is not an established market for vertical farm growers and there hasn’t been a significant effort by established breeding companies to start developing cultivars specifically for vertical farms. Maybe some startups will be able to develop new cultivars or university researchers may be able to give those efforts a boost. Study shown that one of the major hurdles with vertical farms is cost of production. There is a lot of technology and utilities associated with producing leafy greens in vertical farms. That cost of production is very high compared to the leafy greens grown on remote area.  There actually are some vertical farms making money. Some of those are in boutique markets. These growers are able to get more money for a head of lettuce than the competing product that comes from the field. In Singapore where I visited one of the vertical farm however it is going to be difficult for growers who are selling to boutique markets and who receive a premium price for a head of lettuce to break into the mass market. Most consumers are not willing to pay the higher boutique prices. In order for vertical farms to acquire a significant share of the market, they are going to have to bring down the price of lettuce so more people will be willing to pay for the product.

Study shown that one area of vertical farm production that the rowers can be profitable is producing transplants or starter plants. Expert convinced based on economic studies that they have done in the lab by using vertical farms or indoor growing is economically viable for growing transplants or starter plants. Growing transplants is a very economical way to successfully adopt vertical farm production. These starter plants are a high value product and they can be grown under very high density in vertical farms, even higher than they can be grown in a greenhouse. These transplants are inserted into the current supply chain and will be sold to greenhouse and field growers who will produce the end products. The clean controlled environment of a vertical farm can ensure a very high germination rate and a lot of plants can be produced in a small area. The controlled environment of vertical farms also provides a desirable outcome including finished plants that flower sooner or plants that have more dry mass. The controlled environment of a vertical farm used to produce transplants can ensure a high germination rate and can produce a lot of transplants in a small area. The uniformity and quality of transplants grown in a greenhouse may not always match transplants grown in vertical farms. If there is good solar radiation levels, greenhouse growers can produce very good transplants. If growers are trying to produce those transplants in greenhouses during the fall or winter, they may have to supplement the natural light levels or the quality of the transplants may not be as good. There may be a difference in quality and uniformity between seasons. Growing transplants in a vertical farm the quality of the transplants is consistent no matter what the outdoor conditions are. Comparing transplants grown in a vertical farm with transplants grown in a place of greenhouse during the winter, which is when many transplants are grown, the vertical farm transplants usually have a higher dry mass and are more uniform.  It’s not only the amount of light that is important but also the quality of light. Different crops require different vertical farm setups. The production setup that is optimum for for transplants may not work for leafy greens. Growers can create a lot of microclimates and have poor uniformity when they have the wrong vertical farm setup. The vertical farm that works for leafy greens may not work for transplants because the requirements for transplants uniformity are different from those for leafy greens. If growers don’t have the right vertical farm to grow transplants, it’s not going to be easy and it could become a bigger problem. Many growers need to listen to the plants and know what the plants need. Growers can incorporate a lot of technology, including robotics and sensor control, but if they are not listening to what the plants need, the technology will only deliver marginal improvements. The most important thing in a vertical farm is the plants. Everything else is just details. There are future for the vertical farming technology to feed billion of people. Thanks.

By,

M Anem,

Putrajaya,

Malaysia.

(January 2021).

Updated on 9 November 2022.