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Will Vertical Farming Be a Fresh Produce Game Changer?

Posted by IFCO Systems
February 24, 2016

“Vertical agriculture is all the rage now,” the influential Kiplinger Letter (Forecasts for Executives and Investors) wrote recently. It was exercising artistic license to report from an imagined “future” on what life will be like in 15 years. In the year 2030 “...fruit, vegetables and grains (are grown) in buildings controlled with artificial intelligence rather than on horizontal land.” The transition to urban vertical farms by that time has eliminated the need for long-haul trucking and has dramatically reduced the use of fertilizer and pesticides. Unused farmland has reverted to nature.

Back here in 2016, that future might seem like science fiction, yet investors see the potential. The sector is anticipated to grow by over 30 percent annually through 2020 to a value of greater than $3.8 billion. Spread, a Japanese vertical farming company, recently announced that it will construct the first totally automatic “vegetable factory.” The new operation will see robots initially harvest 30,000 heads of lettuce daily, with a target of 500,000. The company’s existing vertical farming facility already produces 21,000 heads each day.

Simply put, vertical farming takes place indoors, with multiple rows of plants stacked vertically. The combination of the vertical layers, in conjunction with optimized lighting, heating, watering and fertilization results in accelerated growing cycles and high yields. The same square footage of space can produce much more product than in a conventional field.

Vertical farming is generating a lot of excitement. Here are some of the points that proponents emphasize:

  • Faster growing rates and higher yields to meet the needs of a growing world population
  • Requires up to 98 percent less water than farming in the open field due to water recycling
  • Yields fresh produce on a year-round basis
  • Not impacted by weather fluctuations
  • Reduces or eliminates agricultural runoffs
  • Dramatically reduces long haul transportation requirements by offering local production in communities
  • Can utilize empty commercial structures that already exist in communities
  • Generates local jobs for the community
  • Can take pressure off of farmland and allow for ecosystem restoration

Critics, however, believe that vertical farming is simply not cost-effective. Louis Albright, an emeritus professor of biological and environmental engineering at Cornell University, has suggested that vertical farming is “pie in the sky.” He has argued that the energy costs associated with vertical farming make vertical farming an unsustainable solution.

While proponents of vertical farming agree that energy costs pose a significant challenge, they believe that solutions are at hand. “The technical limiting factor...is still energy costs related to lighting and HVAC (heating, ventilation, and air conditioning), but these are being overcome rapidly as more investors and entrepreneurs get involved,” the Association for Vertical Farming states on its website.

Meanwhile, the sector continues to grow, with the launch of two vertical farms in Alaska recently announced, as well as a new $23 million, 60,000 square foot vertical farm to be built by FarmedHere in Louisville, Kentucky. The company already has a 90,000 square foot facility in Chicago, currently the largest in North America.

"This new location will bring us one step closer to reaching our goal of building vertical farms in 18 cities across the country and feeding 75 percent of the United States' population," FarmedHere CEO Matt Matros commented in a press release. "With a projected 9.6 billion people on earth by 2050, alternative forms of agriculture are becoming more important, especially in urban areas where adequate farmland is limited."

If successful, vertical farms could result in lower prices and less seasonal fluctuation for greens on the East Coast, according to one analyst. Whether or not vertical farms become a game changer will hinge on continued progress in reducing energy costs. Uncertainty remains, but vertical farming proponents believe that things are looking up.

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Topics: Sustainability