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Is A Vertical Farm Cost Effective To Build And Operate?
A common question we’re often asked is a vertical farm cost effective to build and operate? There is no categorical answer to this complex question, which often requires a detailed feasibility study to resolve.
Author: Robert Colangelo.
Founding Farmer at Green Sense Farms Holding, INC.
A common question we’re often asked is a vertical farm cost-effective to build and operate? There is no categorical answer to this complex question, which often requires a detailed feasibility study to resolve.
The answer Starts With The 4 Cs -
Crop, Capacity, Climate, and Capital Budget.
Crop: What is the intended crop and how many varieties will be grown? At this time vertical farms can economically grow leafy greens (lettuces, baby greens, herbs, and microgreens), starter plants, and cannabis. To grow a cultivar well its best to design a farm with individual grow rooms where set points can be optimized to the monocrop. Many customers ask us to build farms that can grow a wide range of crops. We suggest specializing in growing large volumes of a few crops, that you can grow well and build a brand. This will also make production more efficient increasing the profitability.
Capacity: What is the desired output and frequency of harvest? The answer to this question is key to sizing a farm design. Understanding the production schedule and how many crop rotations a farm will hold will assist in laying out the farm. Capacity is also key to calculating the unit production cost. The bigger the farm typically the lower the unit cost.
Climate: One of the advantages of a vertical farm is that it can be built anywhere from the cold-dry climate in the South Pole to the hot- humid climate in Southeast Asia. The more humid the climate the more expensive mechanical equipment will be required to control Temperature and Relative Humidity. A good farm design can take into consideration the outside cool-dry climate and use it to reduce capital and operating expenses. In addition, cooler drier climates tend to have less bugs which will reduce operating costs when it comes to Integrated Pest Management (IPM) programs.
Capital Budget: A rule of thumb is that if you spend more on capital expense then you will reduce your operating expense. A well-built farm that is designed to optimize crop growth will lower the daily operating cost. To do this it greatly helps to have an anchor customer identified, define the crop (s) that will be grown, the harvest frequency/delivery and how it will be packaged so that these variables all be factored into the farm design.
Many other factors play a role in setting and building a farm. This includes location, automation, and labor. The 4C’s will get you off to a good start and will allow the development of an initial financial proforma so that you can predict the size of the farm, output, and the capital required to build and operate the farm profitably. I have learned that sometimes the best projects are the “ones not done.” Building a farm too big or too small can be a disaster. Starting backwards to first identify and understand the customers’ needs is a good way to begin. With adequate research and planning a vertical farm can be built to operate profitably and be a project worth doing!
Urban Crop Solutions Launches New "Modulex Plant Factory" on Sept. 9th, 2020
Launch Webinar hosted by Henry Gordon-Smith, CEO of Agritecture, on Sept 9th, 2020 (9 am EDT, 3 pm CEST, 9 pm SGT - 45 minutes)
Register And Get A Sneak Preview on The
New www.urbancropsolutions.com Website
Launch Webinar hosted by Henry Gordon-Smith, CEO of Agritecture,
on Sept 9th, 2020 (9 am EDT, 3 pm CEST, 9 pm SGT - 45 minutes)
Indoor Vertical Farming is a fast-emerging agriculture technology that provides compelling solutions to the United Nation’s Sustainable Development Goals: waste less food and support local farmers (Goal 2), avoid wasting water (Goal 6), and provide decent work (Goal 8).
However, few early adopters are making a profit.
Urban Crop Solutions has worked tirelessly to find a sensible solution to the open issues many investors and growers still face today. The initial Capex or investment cost is high and creates the need for a scalable solution. The unique freshness, taste, and shelf life of the crops go to niche markets with ever-changing needs, which requires a Plant Factory to be extremely adaptable. Also, high labor costs push Indoor Farms to implement more automation and become more efficient.
Based on the experiences and feedback of the customers on the 1st generation products, a new generation Plant Factory was designed from the ground up. The company believes it developed a concept that ‘simply makes sense’.
The ModuleX, the “Sensible Plant Factory” is Scalable, Adaptable, and Efficient.
The ModuleX can be configured between 2 to 64 Grow Modules, which means that the Plant Factory is scalable. One Grow Module contains 86 m² (925 sq.ft) of growing surface, yielding about 6.000 kg/year (13.228 lbs/year) of fresh vegetables. Each separate module features an independent climate and nutrient system, allowing the mix of crops to be adaptable to customers’ needs.
The base price is an industry-low Capex of 1.800 EUR per m² growing surface ex-works (199 USD/sq.ft). The labor costs are reduced by the automated crop-to-person ‘BenchCarousel’. For example, the ModuleX-8 has 8 Grow Modules for a total of 688 m² (7.403 sq.ft). The base price is 1.238.400 EUR (approx. 1.47 mm USD) for an output of 44 ton/year of romaine lettuce (97.000 lbs/year). For mid-sized solutions under 5500 m² growing surface, this is probably the most efficient solution on the market today.
To help people in the long and confusing journey into indoor vertical farming, the company also initiates an end-to-end support program, with a free feasibility calculator, technical support, biological consulting, and contract research. Urban Crop Solutions also developed a Corona-proof support system for training, set-up, startup, and first harvest support of any ModuleX Grow Module, which all can now happen remotely.
Tom Debusschere, CEO of Urban Crop Solutions: “We’ve been listening closely to the feedback of our customers and we found improvements just about everywhere. But the breakthrough invention is the automated BenchCarousel. This new crop-to-person carousel brings any bench of your choice to you within 90 seconds. It also allows us to fit a growing surface of 86m² (925sq.ft) within a 40ft insulated freight container, which we believe is an industry record.
What you really pay for is growing surface, labor, and electricity, and the ModuleX Plant Factory offers a step-change improvement in each. We invite you to take a look at our new website, with the investment cost in full transparency, so you can quickly see which solution is the best fit for you.”
Urban Crop Solutions is an agtech pioneer in the fast-emerging world of ‘Indoor Vertical Farming’. Throughout years of research, 220+ ‘plant growth recipes’ were developed for efficient indoor growing. All drivers for healthy plant growth, such as optimal LED spectrum and intensity, nutrient mix, irrigation strategy, and climate settings are tested and validated daily in the company’s own Indoor Biology Research Center.
To date, Urban Crop Solutions has manufactured container Farms and a Plant Factory for clients throughout Europe, North America, and Asia. Urban Crop Solutions’ commercial farms are being operated for vegetables, herbs, and micro-greens for food retail, foodservice, and industrial applications. Research institutions operate the growing infrastructure of Urban Crop Solutions for scientific research on banana seedlings, flowers, hemp, and many more.
Visit www.urbancropsolutions.com for a full virtual tour.
For more information: www.urbancropsolutions.com
Brecht Stubbe, Sales Director brst@urbancropsolutions.com
Maarten Vandecruys, CTO mava@urbancropsolutions.com
Tom Debusschere, CEO tode@urbancropsolutions.com
European headquarters: Regional headquarters:
Grote Heerweg 67 800 Brickell Avenue, 1100 Suite
8791 Beveren-Leie (Waregem) Miami (FL 33131)
Belgium Florida
(+32) 56 96 03 06 +1 (727) 601 7158
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