We need farming, but what kind of farming do we need?

Everywhere you look, farmers, environmentalists, activists, businesses, celebrities, and politicians are talking about climate change, polarizing the subject and postulating what will happen if we don’t take action now. We know the way we are currently farming is harming the planet and our health, but we also know as farmers we have the skills to change the outcome. Some of the problems in agriculture are compounded by long food supply chains, intensive farming and over processing of foods. It remains challenging, in part due to the complexity of the global system we have built. We acknowledge we cannot resolve these issues individually, and campaigners all agree we need to work together to build resilience in the whole food system. 

Urban Ag News created a world graphic to demonstrate the wide range of symbiotic interactions needed to work together for long term food security. 

What role should the CEA industry play in sustaining the food chain?

The founding principles of controlled environment agriculture (CEA) should be to grow food by integrating technology with natural resources in environments close to the consumer, giving better access to healthy, pesticide free foods in a more sustainable way. Importantly, we want to explain how the right technology used in the right situation can help our farmers play their part.

There have been many discussions asking who should lead in CEA. We want to take a more holistic viewpoint, and want to know what role, if any, the CEA industry will play in the security and sustainability of our food systems. Sustainability in CEA has been defined in different ways, but essentially we want to understand how the following co-exist and their interdependency: 

• Profitability
• Technology
• Locality
• Diversity 
• Accessibility 

Farmers have the knowledge and the tools to produce food anywhere, but the real question is: should consumers continue to demand convenience in the food chain at the cost of environmental sustainability?

Our food systems are driven in part to meet consumer demand for convenience. People have come to believe their food should be accessible all year round. We no longer have seasons, and retailers comply by importing to keep shelves stocked. But, anytime crops are grown out of season, or in non-native regions of the world, production becomes heavily reliant on additional energy and distribution networks. Not only is this bad for the planet, it pushes up costs for producers, which is passed on to consumers. It’s a no-win scenario as farmers struggle to maintain economic viability, while transitioning to greener technologies. 

If farming in hyper local food systems needs to be economically viable, how can it be sustainable with all the variables?

“A company that stays in business is economically sustainable, but this doesn’t always mean it’s environmentally sustainable.” Bruce Bugbee, Professor of crop physiology at Utah State University.

On the face of it, the answer seems simple for us in CEA, in that we could provide more local sustainable food production using clean energy, close to where people live. Getting over the startup capital costs of building a farm and access to urban land is a hurdle. Regardless, it would take a huge number of smaller farms to build a better food supply chain, reducing food miles and eliminating food deserts around our inner cities. Cutting air miles is only one part of the solution, we also need to understand the type of technology deployed, and the clean energy inputs required that help us build a more sustainable approach. 

“We need, among others, small local producers, ideally using new forms of high-yielding agroecology.” George Monbiot, British journalist, author, and environmental and political activist.

What difference can CEA make to the planet? 

By its very nature, CEA is a competitively expanding field with progressive and environmentally friendly technologies that allow us to protect the crops we grow and mass produce food on a scale capable of feeding populations at risk from climate change. We believe the industry should drive down energy consumption, eliminate pesticides and reduce agricultural run-off. It’s a little too early to celebrate these accomplishments, we need to do more work before we pat each other on the back.

Integrating innovative and time saving technology in existing farms will make them more efficient, and is an interim way to restore local supply chains. Creating skilled farming jobs, and bringing people closer to the food supply chain, is critical to success. We have discussed some of the issues with labor in the CEA industry in previous articles. 

Less obvious are the advances in crop breeding that increase the range of crops that can be adapted to grow in CEA. We can keep developing suitable crops, but the area of highest impact is undoubtedly changing consumer behavior, and for that to be successful we need increased consumer knowledge. This includes understanding the value of local fresh produce that does not travel across the world to reach our supermarket shelves. Paying for higher quality is a more sustainable approach in the long term. We know this is a complex subject and that not all consumers can afford to pay higher costs. 

“Consumers who prioritize locally grown, and seasonal produce are often willing and able to pay a premium for products.” Urban Ag News 

How do we measure sustainable agriculture?

Fossil fuel energy costs have hindered the CEA industry in the past, but new farms will undoubtedly attempt newer hydrogen technologies, or we may see hybrid farms, mixed with solar, wind or thermal renewable energy. We are already seeing this trend. 

Moving to new clean energy sources is going to be capital and potentially carbon heavy in the short to medium term. Striving to make CEA farms profitable using renewable energy is in the short term more costly to the environment. Do we have the time and enough data to mobilize green energy for food systems? For investors in CEA, there should be modeling from prospective businesses demonstrating quantitative metrics of inputs, and emissions from food grown with the use of fossil fuels and renewables. But who will invest in sustainability of the global food system, and should it be governments concerned with social good and the environment rather than wealthy business owners?

“The transition to clean CEA farms should use tech that harnesses both natural resources of the region and availability of labor to produce crops with the lowest energy inputs.” Chris Higgins, President and general manager of Hort Americas.

Extreme weather, either too hot, too cold or too wet, will make current crops and locations unpredictable. The use of renewable energy sources either to heat or cool these crops must not exacerbate the problem. In the long term, conversion to clean energy sources will lead to more sustainable CEA food production in regions that become inhospitable to certain crops and require either cooling or heating to maintain suitable temperatures. Rebates on high energy costs will encourage farmers to take advantage of green schemes, and more engineers will enter this field in the future to help us achieve additional energy efficiencies. All farmers will need access to land to build resilient infrastructure.

Why LED lighting is better for energy consumption and is the most efficient way to supplement sunlight for photosynthesis 

Lighting is a key topic in this industry, and LEDs are well proven to increase yields and reduce crop disease. A first of its kind comparative study by Wageningen University showed an energy saving of 40%  when switching to LED lights versus conventional agricultural lighting.  The switch reduces heat radiating from traditional lamps by 25% which gives enormous flexibility to transition to clean renewable energy heat resources. 

LEDs also provide an opportunity to increase yields and crop efficiency using advanced spectral recipes, extended photoperiods and variable light intensities as the crop demands. This provides the grower with more control and flexibility to determine the light level separately from heat generation in greenhouses. Innovation will make it possible to build in flexible LED lighting that adjusts automatically in response to plant physiology, optimizing plant photosynthetic capacity. Fine-tuning of LEDs will make crops more efficient and together with genetic breeding will yield higher biomass using highly effective and sustainable growing methods. 

Eliminating agricultural run-off by integrating a closed nutrient feed system in a greenhouse or open field 

As CEA farmers, we do not propose to solve all the issues created by climate change, but one we can have an immediate effect on is nutrient run-off into groundwater. Water is a commodity we need to use sparsely in agriculture and run off is tightly controlled in high-tech environments, recirculating through filters and running operations with only minimal top up for small production sites. Innovative technologies like nanobubbles extend the lifespan of nutrient solutions, and careful automated monitoring ensures the plants get all uptake of nutrients at the right time with accuracy and efficiency.

Monocrop farming is not only killing the planet through deforestation, it is also impacting our health.

Farming crops like wheat, rice, soy and palm oil is impacting our environment and damaging core systems, leading to further downstream effects. It’s a complex picture as monocrops themselves do not create a poor diet. Instead, poor health is more likely to be linked to consumer behavior and a lack of knowledge of how some processed foods in the diet can be damaging. We appreciate the choice of an individual to be healthy is not the responsibility of farmers, but we should all promote diverse fruits and vegetables to sustain healthy lives.

Crops suitable and adapted to CEA have until now been limited, and we want to avoid CEA itself becoming a ‘monocrop’ industry. The issues here are conflicting, as monocrops have saved millions from starving, but the cost to the planet has been high and is unsustainable. Diversifying what we grow is significantly better for human health, biodiversity, and long term food security. 

We are making huge strides with access to clean stock, producing diverse crops that are adaptable to CEA systems. It will help the planet by providing the consumer demand for certain foods in a way that avoids air miles and excessively destructive land-use change.

Crop diversity is a bottleneck in CEA as we figure out the most profitable markets to offset the higher energy inputs in the short term. Most growers are established experts in the leafy green space, but it takes skill and innovation to make other crops such as dragon fruit and saffron economical. We will get there. Science based, profitable opportunities are presented by CRISPR  gene editing to create new crops or varieties to circumvent rising temperatures, taking advantage of extended growing seasons. 

“What’s a gene worth? If it unlocks a crop trait that helps farmers grow enough while conserving our planet’s natural resources, then… everything.” Bayer US.

Some of our most well known superfoods, turmeric, ginger, and strawberries thrive in hotter climates, while cooler temps favor lesser known medicinal crops like wasabi and ginseng. These all grow in climates we are able to simulate indoors or in quasi greenhouse hydroponics systems. Just how a grower chooses to adapt their growing methods should not be restrictive, but technology can be ancillary to their needs. There are further opportunities for development of new medicines and protein sources from plants grown in CEA,  which will give access to more people in the world. 

Why is this important? 

Our consumerism is not only destroying the planet, but destroying our health. The two are inextricably linked. While farmers are developing innovative solutions that promote sustainable agriculture, we believe the added burden of health should not lie solely with them. 

We have a window of opportunity to make the food chain more sustainable and at the same time improve global health through what people eat.

We are all in danger of acute disease from not only future pandemics but also from sedentary consumer diseases like diabetes and heart disease. Not only that, but we consume too much of the wrong stuff because it is marketed to us in irresistible ways. How many of us consider the planet when we are filling our shopping baskets with processed foods?

Eating better is one of the simplest answers, yet we are defined as a generation that has still to behave in a way that allows us to have healthy lives. Part of this is down to access to healthy foods, as we know the problem is exacerbated in deprived inner city communities. It is also about the cost for an individual, when it could be cheaper to buy processed foods, yet we pay a heavy price for healthcare to resolve lifestyle diseases down the road. The answer is to educate communities with simple messaging, and data driven science to bring people closer to their food chain, and help them make more ethical decisions about their space on the planet.

Who will lead the CEA industry?

As a populist driven society, we rely on influential people to drive home the message. 

Some people, like Stephen Ritz, are leading the way in CEA, raising awareness in their community with particular emphasis on children’s education. We need others to step up and encourage the next generation. 

Ultimately it’s not about us, it’s about our children, who will bear the burden of feeding the world.

“We must shift our emphasis from economic efficiency to life efficiency.” Kofi Annan, Former Secretary-General of the United Nations.

Finally, we return to what Chris discussed in his article and who should lead this movement as we try to understand how we come together to resolve our sustainability issues in farming. We cannot claim to resolve the world’s food problems with CEA alone, but we can keep innovating, keep talking to farmers, and advising on the right tech for the right situation. 

“You just need to know how to properly use the appropriate technology that allows each farm to scale correctly by understanding the relationships between yield and capex, and opex per square foot, meter, acre or hectare.” Chris Higgins 

If you need some ideas, try our functional food blogs. Feel free to reprint this article as long as you give credit to the authors and Urban Ag News. 

If you are considering growing specialty crops in a greenhouse or vertical farm, it pays to do your homework.

Before starting to grow any controlled environment food crop, it pays (literally) to do your homework related to production and market potential. This is especially important with any type of specialty crop. Serge Boon, founder of Boon Greenhouse Consultancy, said regardless of the crop, a greenhouse or vertical farm grower has to determine if there is a sustainable market for the crop.

“I have seen growers who have started very small and have developed a market and want to expand their production facilities to produce more crops,” Boon said. “They want to increase the volume of the crops they are growing. By increasing the size of the operation, production efficiencies should also increase.

“Unfortunately, there are still some growers who think they can produce a specialty crop and easily sell it. They may not realize that the crop may be difficult to produce and/or market.”

Boon said the terms specialty crop and niche market are often used interchangeably and can have a wide definition or application because they can mean different things to different people.

“In most cases, specialty crops would not include more common controlled environment crops like tomatoes, cucumbers, lettuce, and peppers, but it could include a special variety of tomatoes like heirloom tomatoes not commonly grown in controlled environment production,” Boon said.

Production systems for specialty crops

The large commercial greenhouse vegetable growers that Boon is working with are primarily producing tomatoes, cucumbers, and leafy greens. He is also working with commercial mid-size greenhouse operations that are focused on producing multiple crops, including specialty crops.

Boon said the production systems used to grow specialty crops are not usually that different than the systems used for more common controlled-environment-grown crops.

“It is different from the perspective of the growers’ needs,” he said. “Because of their production needs, these crops might require more attention from the growers in order to produce quality, salable crops.”

Boon said a well-bred greenhouse tomato will almost grow by itself.

“The lines of tomatoes bred for controlled environment production have been developed so that they produce uniform size fruit,” he said. “The emphasis is on the size and yield.”

Because specialty crops like heirloom tomatoes have not been bred for commercial production, they require more attention to detail in regards to production. These varieties may be more susceptible to pests, diseases, and physiological disorders such as fruit deformities.

“This also relates to automation including robotic harvesting being developed for the more common controlled environment crops of tomatoes, cucumbers, leafy greens, and peppers,” Boon said. “The automation for some specialty crops may be more difficult to develop or not worth developing. The fruit of these specialty crops may also be more tender and more prone to bruising. The fruit may not be robust enough for mechanical harvesting. This will definitely have an effect on what automation can be used for planting, harvesting, and packaging. The production of specialty crops goes hand-in-hand with being more labor intensive.”

Boon said even specialty leafy greens could be more difficult to grow than some of the more commonly grown species and varieties.

“These specialty leafy greens could be more susceptible to nutrient deficiencies or they could tend to have a leggier habit,” he said. “These specialty greens could be more difficult to grow in mobile gutter systems because the plants fall over and they don’t lend themselves to automated harvesting.”

Boon said floating rafts are flexible systems that can accommodate even some of the more difficult to grow specialty crops.

“Mobile gutter systems are tailored more to certain varieties because the plants have to be able to stand up,” he said. “The crops have to be able to be seeded in a specific way.

“With floating rafts there is more flexibility. Production system and plant habit definitely should be taken into consideration. Some specialty crops require more hands-on attention which may not allow certain types of automation.”

Do you have the “right stuff”?

Boon said for each specialty or niche crop, growers need to consider whether they have the production expertise, the right production system and whether there is a market for the crops.

“Many of these specialty crops lend themselves to being grown near the markets where they would be consumed,” he said. “This also has application to lowering the risk from production loss.

“That’s not to say growers couldn’t produce large quantities of specialty crops as long as they have systems in place to deal with the plants’ shortcomings. This could relate to the production, harvesting and transport of crops. They may require a certain temperature and/or humidity for their production and/or transport. The risk of loss goes up for these crops.”

Growers need to be aware of the downsides of a specialty crop or variety.

“When picking a specialty crop, growers should know the benefits of it, but also know its downsides,” Boon said. “This will help to ensure growers are prepared to encounter difficulties.

“Sometimes this can be finding technical production information for some of these crops. There are reliable seed companies that know the varieties. The information may be available, but it may be more difficult to find the hands-on technical expertise and experience to assist in growing some of these crops. The information may be available, but finding someone with the production expertise may be limited.”

Do your market research

Boon said market research is critical to the production of any specialty crop.

“The design of the greenhouse or vertical farm and their production systems, what crops are going to be grown, growers can make those all work, but ultimately the crops have to be sold,” he said. “Being able to grow a crop doesn’t always mean you should. It can take multiple markets to be successful with these specialty crops.”

Boon said the changes in people’s eating habits bodes well for the specialty crop market.

“People are more willing to pay for produce that is nutritious and healthy for them,” he said. “In many cases, consumers don’t know how the produce available in grocery stores was grown. Knowing the source, knowing it is pesticide-free, knowing it is high in nutrition, these are all factors that will help increase the demand for specialty crops.

“U.S. consumers are starting to look for and are more willing to pay for these crops, which is already happening a lot more in Europe. There is a more direct-to-consumer market that is increasing. Growers need to determine how they can tap into that market and how to deliver the produce.”

For more: Boon Greenhouse Consultancy, serge@boongreenhouse.com; https://boongreenhouse.com/.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.

Acuity Brands lighting, sensors, components, and controls products are used throughout North America in almost every major lighting segment including commercial indoor, outdoor, industrial, infrastructure and healthcare applications. The company consists of more than 25 individual lighting and controls brands of which several, such as Lithonia Lighting, date back more than 75 years.

Driving innovative LED technology

According to Jacob Palombo, director of product for horticulture, Acuity Brands has been at the forefront of the transition of LEDs from traditional technology including metal halide and fluorescent light fixtures. 

“Acuity Brands has been designing and developing LED fixtures for over 15 years,” Palombo said. “The company is driving innovation in everything from LED fixture design and performance to advancements in quality and reliability as well as lighting controls.

“Sticking LED diodes onto a board and creating a light is not as simple as it seems. There are a lot of ways it can go wrong. That is why we have spent a great deal of time on how to build a robust system that is reliable and is designed to take advantage of the way LEDs produce light, how to dissipate heat, and how to use optics to control the light.”

Acuity Brands designs all of its own products in various innovation centers in the United States and produces almost all of its products in North America.

“This gives the company the ability to support customers with lower lead times, not having to wait for products to be shipped from overseas,” Palombo said. “We source a handful of plain vanilla products, but our spec and flagship products, the products that we design and produce in-house, are manufactured in North America.”

Illuminating the horticulture sector

Acuity Brands entered the horticulture lighting industry in 2022 with the launch of its Verjure Pro series of LED grow lights.

“Leading up to the launch of the Verjure Pro series, Acuity Brands participated in academic plant research in growing plants with LED lights to develop a science-forward approach in product and spectral development,” Palombo said. “The Verjure Pro series is a versatile platform that supports a wide variety of applications in commercial cultivation for indoor farms and greenhouses.”

Unlike other commercial LED grow lights that require wired controls, Acuity Brands introduced its Verjure Pro series with nLight AIR wireless controls. This scalable wireless controls platform eliminates the need to daisy chain the light fixtures with low voltage wiring.

“With the Verjure Pro series growers can order the lights with a wireless radio that allows all the lights to automatically talk to one another,” Palombo said. “This allows growers to group them and zone them to meet their needs and to give them more control in ways they could not before.”

In its efforts to expand its product offerings in the horticulture sector, especially in commercial greenhouse and vertical farming spaces, Acuity Brands recently acquired the Current Arize series of LED grow lights. These will become part of the Verjure brand. These fixtures are available from Hort Americas, a commercial horticultural supply company in Bedford, Texas.

“Acuity will integrate its wireless controls technology into the Arize products,” Palombo said. “Not having to wire each light manually with low voltage wiring will save growers a lot of labor and installation time. It may also make it easier for the lights to integrate with existing control systems. We are also excited to continue to build upon these platforms to deliver incremental functionality and performance.”

Focused on being sustainable, environmentally conscious

Even with its size and scope, Acuity Brands has not lost sight of its role to be a good steward of the environment and to make a positive impact in the communities where it operates its facilities. The company has initiated its EarthLIGHT strategy which reflects its comprehensive approach around environmental, social, and governance (ESG) issues.

“Acuity Brands declared carbon neutrality in 2021 through a combination of its carbon reduction measures at its operations and offsetting measures,” Palombo said. “The company is focused on minimizing its carbon footprint and helping its customers improve theirs. Part of the company’s strategy is the intersection of technology and sustainability. It’s something we take very seriously and a part of EarthLIGHT is to be good stewards of the environment.

Palombo said EarthLIGHT strongly aligns with controlled environment horticulture.

“Indoor horticulture can be a more effective way of growing plants compared to traditional farming methods by using less water, fertilizer and land while increasing overall yields,” he said. “Indoor horticulture can also provide fresher, cleaner, and healthier food to communities that may not otherwise have access while reducing the carbon footprint for transportation. These are all things that are compatible with EarthLIGHT and are important to us.”

Building partnerships

Even though Acuity Brands is the largest lighting company in North America, Palombo said there are a lot of people in the horticulture sector who aren’t familiar with the company.

“My goal over the next year is to introduce Acuity to the industry and make people aware that it is a well-established company, and one of the true global leaders in lighting,” he said. “Some of the biggest companies in the U.S. from many different industries trust and use Acuity lighting and controls.”

Palombo said Acuity has a track record for performance and delivering a quality product.

“We use quality components and the lights perform in the environments they were designed for,” he said. “We stand behind our products with a warranty backed by a $4 billion publicly-traded company.

“Within the horticulture industry, there are lighting companies that may not be around in five years to stand behind their warranties. Growers in the controlled environment space are looking for products from companies they can trust and partner with. My goal is to make sure growers know Acuity Brands is that company.”

For more: Acuity Brands, https://www.acuitybrands.com/.
Hort Americas, (469) 532-2383; https://hortamericas.com/.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.

Hundreds of millions of dollars were raised to meet what investors felt were market demands. Now the economy, access to money and the cost of money has changed. Also, many farms that were recently built are now out of business.  

This leads me to a few questions:  

Was there ever a real need for locally grown fresh produce? If the answer is yes, is that need still there? And can controlled environment ag facilities fill those needs?

Inevitable reasons we started talking about innovating farming.
1.)  Feed the Future and its Population Growth.
The world’s population is expected to reach around 9.7 billion by 2050, according to United Nations projections. Accommodating this growth requires a significant increase in food production.

2.)  Climate Change
Climate change is affecting agricultural systems globally, leading to shifts in growing seasons, changes in precipitation patterns, and an increase in the frequency and intensity of extreme weather events. Adapting agriculture to these changes is crucial for future food security.

3.) Resource Scarcity
Challenges such as water scarcity, soil degradation, and a decrease in arable land pose constraints on traditional agricultural practices. Finding sustainable ways to produce more food with fewer resources is essential.

This review won’t discuss why these new businesses struggled or failed. Instead, we want to focus on the question, is “locally grown” still a thing? Or was it one of many consumer trends that have come and quickly past?  

First, let’s answer a few questions.

1. Why locally grown?
2. What is the definition of locally grown?
3. Where can you find locally grown products?  

Initial research (learn more about the research here) shows that consumers wanted access to locally grown products because they believed goods produced close to them were more environmentally sustainable, provided support for their local economy, and gave their families fresher and healthier options. While many consumers believe locally grown vegetables are worth paying more for, inflation has hit grocery budgets hard.  The cold reality is that a certain segment of the consumer shopping public buys imported produce because it’s more affordable, still a healthy option and generally good quality.

More immediate reasons to innovate the way we farm:

Globalization and Urbanization:
Increasing urbanization and globalization impact food distribution systems. The demand for food in urban areas is rising, requiring efficient and resilient supply chains to ensure that urban populations have access to a diverse and nutritious food supply.

Technological Advancements:
Leveraging technology and innovation in agriculture is crucial for increasing productivity, improving resource efficiency, and developing more resilient crop varieties. Precision agriculture, genetic engineering, and other advancements play a role in shaping the future of food production.

Sustainability:
There is a growing emphasis on sustainable agriculture practices that minimize environmental impact, reduce greenhouse gas emissions, and promote biodiversity. Balancing the need for increased food production with environmental sustainability is a key aspect of feeding the future.

In addition, as time passes, it is becoming clearer that a certain segment of the consumer public and retailers are more conscious of the environmental impact their purchases make and what their brands represent. They believe that buying locally can help reduce the carbon footprint and lower transportation miles on the food they consume. 

While this remains true, more established businesses and knowledgeable investors are looking at the resources needed to produce in the off-season or in a controlled environment. This requires using electricity or natural gas to light, heat and cool their facilities to provide consumers and retailers with consistency and quality year-round, while still local. The most conscious farms now work to capture and report these numbers to convince consumers that locally grown is, in fact, a more environmentally friendly choice.

Example:  Farms such as Gotham Greens, Area 2 Farms and NatureSweet are choosing to become B-Corps.  

(Certified B Corporations are social enterprises verified by B Lab, a nonprofit organization. B Lab certifies companies based on how they create value for non-shareholding stakeholders, such as their employees, the local community, and the environment. Once a firm crosses a certain performance threshold on these dimensions, it makes amendments to its corporate charter to incorporate the interests of all stakeholders into the fiduciary duties of directors and officers. These steps demonstrate that a firm is following a fundamentally different governance philosophy than a traditional shareholder-centered corporation.)

Where locally grown produce really shines is in delivering fresh products, especially when consumers want seasonally and geographically appropriate options. This may also be where farmers ultimately produce the most sustainable options, as seasonally appropriate crops require the least amount of manipulation to the growing climate as well as the lowest capital investment. The only question(s) remaining with this locally grown option is whether the farmer has access to the land needed to produce enough of these crops to support their farming business and the mortgage on the land, while still providing their family with a reasonable lifestyle. 

The desire to produce more locally, while investing in technology, is also where we have seen the biggest changes in how and where farms get financing. Historically, farmers used traditional lending sources such as banks, state-sponsored programs or owner financing to purchase land and needed equipment. These investments were considered safe and conservative based on using the farmland and a farmer’s home as collateral.  

But new and innovative farming concepts seldom qualify for traditional financing. They are considered more risky due few unproven profit models and much greater need for capital per acre of farmable land. Due to this risk, farms that use greenhouses or indoor farm designs have had to look to new financing options. This includes angel, private equity and venture capital financing options where risk and opportunity are measured differently than traditional outlets.

So what qualifies as locally grown? 

The 2008 Farm Bill* defined local food as food grown and transported fewer than 400 miles or within the same state. This obviously means something different depending on the state of the country you live in.  

If, for example, you live in Texas, locally grown could mean the food travels 600-700 miles. Yet someone who lives in Vermont could have food that travels no further than 200 miles in state or 400 miles including surrounding states. Regardless, farms focused on providing locally grown food must look at size and scale much differently than traditional farms targeting conventional produce markets and retailers.

*The farm bill is an omnibus, multiyear law that governs an array of agricultural and food programs. It provides an opportunity for policymakers to comprehensively and periodically address agricultural and food issues.

Where can you find locally grown produce?

Consumers who look for locally grown products are also likely to shop differently than your average grocery store shopper. Farmers markets played a major role in the initial local food movements. The popularity of farmers markets gave farmers direct access to their consumers, allowing them to control messaging and branding, while developing relationships with buyers. 

This led to developing other direct-to-consumer sales channels that have increased access for farmers and consumers. You can’t underestimate consumers’ appreciation for the opportunity to interact with local producers and learn more about their food’s origin.  

Photos courtesy of Area 2 Farms

Next up is specialty retailers and restaurants. Both recognized the demand for locally sourced products and incorporated them into menus and other packaged goods. Grocery stores also added special sections dedicated to local products.

And here is where the story might be changing: Consumers who prioritize locally grown and seasonal produce are often willing and able to pay a premium for products. These  consumers value health, the environment and experience. They normally have more disposable income and can afford to purchase food for reasons other than convenience, calories and protein. 

I will never claim to be an expert on the economy, but the media in general wants you to believe that our economy is struggling due to inflation. According to Statista, the economy was down about 10% in 2022 and will probably be down again slightly in 2023. 

According to “Yale Insights,” inflation (or even the perception of inflation) changes how consumers value the items they shop for. Many consumers become more critical of their purchases. They look for sales, “trade down” for generic brands and seek best prices. They also change where they shop, looking for discounts from retailers they perceive as cheaper, or forgo certain purchases entirely. 

Does this mean that all consumers who once valued locally grown produce are gone? 

No. It simply suggests that, as the economy changes, the accessible market for a premium-priced product will likely change. It may be limited to those who can afford the purchase or still value the product(s) over other items they regularly consume.

Getting back to the original question(s) in this article’s title, is “locally grown” a fad or a trend that is alive or dead? 

Based on everything we see from the USDA and other organizations that talk about farming trends, I say locally grown is alive and well.  

However, it also represents values that are difficult to scale or market easily to the general shopping public and retailers that offer options to price-conscious shoppers. This will create problems for many farms that used “locally grown” as a key reason to attract investment dollars from private equity firms looking to invest in a company, operate them or manage them for a short period of time, and then sell the entity or its shares after showing profitable and scalable growth.  

Farms that took this type of capital will likely outgrow the local market and move into that of the average “Walmart” shopper. Walmart and retailers similar to them focus on providing low prices and value to middle America. These are the same shoppers who have been losing disposable income over the past two years due to inflation.   

So the question then is not, is locally grown dead or alive? The question is, how do you build a profitable farm that is sized and financed appropriately to service discerning consumers who want products that might cost more to grow but meet the values that are important to them in their food choices?

Strawberry production in the controlled environment agriculture industry is poised for a transformative shift, thanks to advancements in artificial intelligence. 

As one of the most popular fruits globally, strawberries present unique challenges for commercial growers. Among the greatest is the ability to consistently produce high enough yields to be profitable.

Key reasons contributing to this challenge include:

• Fluctuating strawberry prices make it difficult for growers to predict profitability.

• Shortages in labor, especially for harvesting, can affect yield and profitability.

• Inconsistencies in temperature, humidity or light can reduce yield.

• Pest and disease management can be costly and time-consuming.

• Strawberries must reach the market while still fresh.

• Production requires significant resources.

The fresh produce industry, including strawberry growers, struggles with predicting shelf life. According to OneThird, a Dutch tech firm, retailers often lose 10-40% of their profits from having to discard fruits and vegetables, including strawberries. 

This results in financial losses and has significant environmental costs, such as excessive fresh water consumption and CO2 emissions​​.

The shortage of fruit pickers has led to an increased interest in automated solutions such as crop-picking robots. For instance, a strawberry harvesting robot developed by Organifarms, named BERRY, uses image recognition software to determine which fruits are ready for harvest​​.

BERRY can assess ripeness, size, shape and the presence of defects in each strawberry. Beyond just picking strawberries, the robot also places them into containers. An integrated balance system ensures each one is properly filled.

The Role of AI in Overcoming Strawberry Growing Challenges

AI continues to help reshape strawberry production in controlled environments. Researchers in Taiwan have used AI to optimize growing conditions for white strawberries, resulting in loss rates dropping from 70% to 20%. This shows the potential of AI in enhancing crop yields and sustainability​​​​. 

Competitions in China have also highlighted AI’s effectiveness, with startups going head-to-head against experienced farmers to demonstrate capabilities in improving strawberry growth​​.

One example is the Duo Duo Smart Agriculture Competition in 2020. Organized by Pinduoduo and the China Agricultural University, the competition was held in collaboration with the United Nations’ Food and Agriculture Organization. Yield, taste and cost-effectiveness were the primary focus.

The AI teams registered a 175% higher growth rate in strawberry production compared to traditional methods. This was achieved by leveraging AI algorithms to control growth, demonstrating the impact AI can have on efficiency and productivity. 

The competition also highlighted the potential for earlier market access for strawberries, which could result in pricing advantages.

These developments in China’s strawberry cultivation underscore the role AI can play in modernizing agriculture. They provide insights and strategies growers can adapt to enhance food production and sustainability.

Besides growing conditions, optimizing both the climate and plant rootzone is also crucial for high-yield and quality strawberry production. Rootzone management includes factors such as moisture content, dissolved oxygen, nutrient concentration and temperature.

Dr. Youbin Zheng, environmental horticulture professor at the University of Guelph, explains that almost all crop husbandry in controlled environment plant production is based on human inputs, such as experience and available time for managing the climate and rootzone. Therefore, in intensive controlled environment production systems, the climate and rootzone are often far from optimized.

“AI can be used for controlling the climate system and fertigation automatically, with precise management of upstream, midstream and downstream data,” Zheng said. “Real-time data from sensor arrays in the berry greenhouses allow for intuitive integration of AI into greenhouse operations, assisting growers in making more logical, site-specific and data-based crop management decisions.”

Naturally, since controlled environment strawberry production is still an emerging sector, the use of AI in the field is equally new. For AI to be effective, gathering data is essential for future applications. 

For instance, Zheng points to the need for scientific data to prevent conditions such as strawberry tip burn. This is especially needed because the issue doesn’t appear immediately. Instead, it develops over time due to environmental conditions. 

“Without data, AI can’t preemptively avoid these harmful conditions, impacting plant health and yield,” Zheng added.

Dr. Chieri Kubota, a professor in the Department of Horticulture and Crop Science, and director of the Ohio Controlled Environment Agriculture Center at the Ohio State University, agrees that more data is necessary before growers can fully integrate AI into strawberry production.

“Data and knowledge on strawberry growth and development under controlled environments are still limited and, therefore, applications of AI are limited also,” she said. 

Besides data, she points to needing more physiological knowledge, particularly plant responses to environmental conditions.

In line with Kubota’s observations, one aspect that requires attention is the gap in knowledge about strawberries’ responses to environmental variables such as light and temperature. These factors are critical due to the crop’s sensitivity. 

In particular, different strawberry cultivars exhibit varying flowering responses, where light and temperature are significant influences. This specificity in response is important, says M.S. Karla Garcia, technical service specialist and consultant at Hort Americas, because greenhouse strawberry production is such a relatively new area of focus. 

“Most strawberry cultivars have been studied and classified based on their performance in field conditions,” she said. “So there’s a pressing need for cultivar-specific research to understand and effectively manage each type in controlled environments.”

Currently, Kubota’s team at OSU is collaborating with Koidra, a key player in AI-driven agriculture, to explore innovative ways for optimizing plant growth. Their focus includes understanding plant responses to various environmental factors and integrating this knowledge into AI algorithms. 

This collaboration aims to bridge the gap between current agricultural practices and advanced AI applications, paving the way for more efficient and sustainable production. 

Koidra’s Role in the Homegrown Innovation Challenge

Koidra is also seeking to make significant strides in strawberry production through the Homegrown Innovation Challenge. The challenge is aimed at extending the growing season of berries in Canada, addressing the country’s reliance on imported fresh produce and enhancing food security. 

Koidra’s project, “Autonomous Controlled Environment System for Year-Round Berry Production,” is being done in collaboration with Dr. Youbin Zheng and Dr. Xiuming Hao from Agriculture and Agri-Food Canada​​.

“Using advanced AI technology, our goal is not just to enhance yields,” said Koidra CEO, Kenneth Tran. “We’re looking to build off our success in previous projects to further define what’s possible in controlled environment agriculture. With strawberries, we’re striving for greater efficiency, sustainability and profitability.” 

Koidra’s AI solutions refine and optimize environmental parameters in greenhouses, such as temperature and CO2 levels, ensuring ideal growth conditions. This increases yield while also enhancing resource efficiency, making the growing process more sustainable​​. 

The company’s previous successes in autonomous greenhouse challenges with cucumbers and lettuce, where they achieved record yields and sustainability ratings, demonstrate the potential impact of their technology on strawberry growing​​.

The Future of AI in Strawberry Production

The integration of AI in strawberry farming is a step toward sustainable berry farming. It also represents a leap forward in the future of agriculture. 

The Homegrown Innovation Challenge underscores the need for education and collaboration in Canadian agriculture, setting a precedent for global agricultural practices. This initiative illustrates the key role of tech innovators and growers in shaping the future of food production​​​​.

AI offers a promising solution to the challenges faced by strawberry growers, particularly in controlled environment agriculture. Through initiatives such as the Homegrown Innovation Challenge and the pioneering work of companies such as Koidra, the strawberry industry is expected to see significant advancements. 

As AI continues to evolve, its role in agriculture is sure to expand, offering new opportunities for growers and contributing to a more sustainable and efficient food production system.

While controlled environment agriculture continues to expand, there is still the question of whether it can simultaneously achieve both economic and environmental sustainability.

Even as controlled environment agriculture companies go out of business or file for bankruptcy, investors see economic opportunities. New indoor farms are coming online and others are expanding their operations. These investors, however, often overlook the economic and environmental sustainability issues of growing food without sunlight and focus on CEA’s yield advantages over traditional outdoor farming.

“Some people confuse profitability with environmental sustainability,” said Bruce Bugbee, professor of crop physiology at Utah State University and president of Apogee Instruments. “Not all things that are profitable are good for the environment. We often assume that indoor ag is good for everyone.

“If a grower can stay in business, it must be good for the environment. That’s not necessarily the case. A company that stays in business is economically sustainable, but this doesn’t always mean it’s environmentally sustainable.”

Bugbee presented the keynote address at the recent GLASE 2023 Summit, which focused on Greenhouse Energy Resilience.

“Indoor agriculture should include both greenhouses and indoor farms,” he said. “The difference is that greenhouses use natural sunlight and indoor farms use electricity to generate photons for photosynthesis. The exclusive use of LEDs in closed indoor farms should be called electric light agriculture. Plants can’t tell whether photons are coming from electric lights or the sun. Photons from the sun are free, while photons from lights are generated from electricity. No matter how efficient LEDs become, they are still competing with free natural photons from the sun.” 

High input agriculture

Bugbee uses the term high input agriculture to include a wide variety of production systems.

“Horticultural food production is much higher input than agronomic food production,” he said. “More energy is used to grow tomatoes than soybeans or corn. It’s just the nature of the crops. Horticulture is high input and high value. Protected horticulture is higher input than field horticulture.

“Electric light agriculture is even higher input. Some people assume that high input agriculture will save the planet because it has the potential to use less water and fertilizer. But electric light agriculture currently uses fossil fuels.”

Bugbee said there is the potential to use renewable energy sources, including solar and wind.

“It takes a lot of photons to grow food crops,” he said. “But even the most efficient solar panels coupled with the most efficient LEDs, it takes 2 acres of solar panels to provide the equivalent of sunlight for 1 acre of greenhouses. Direct use of sunlight for photosynthesis is efficient, but it could be considered a lower-tech solution.”

One of the factors driving interest in electric light agriculture is climate change.

“Investors in indoor agriculture often refer to the risks of growing crops outdoors,” Bugbee said. “My experience is that growing crops without sunlight is economically risky. Growing indoors is dependent on a steady supply of energy. Many of the bankruptcies that have occurred with electric light agriculture operations in Europe were caused by political events like the Ukraine war, which impacted the cost of energy.

“Greenhouses are somewhere in the middle. They are protected and utilize free sunlight. The level of sunlight is much less in the winter than in the summer, but it is still a predictable resource. The supply of cheap energy is less predictable.”

Potential of agrivoltaics

Bugbee said one source of sustainable energy that has the potential to improve controlled environment agriculture energy efficiency is agrivoltaics. Agrivoltaics, which is also referred to as agrisolar, uses land for both agriculture and solar photovoltaic energy generation.

“Agrivoltaics offers the direct use of sunlight as much as possible,” Bugbee said. “Greenhouses could be outfitted with solar panels that can be rotated to shade in the summer and open in the winter depending on how much light is needed by the crops.”

When there is too much heat from the sun, the solar panels can be rotated to produce more electricity. During winter when there is less sunlight, the panels can be oriented vertically and allow the maximum amount of sunlight to be delivered directly to the crops.

“This helps to provide temperature control and combined production of electricity with food production,” he said. “This facilitates the direct use of sunlight.

“Field crops are being grown under appropriately-spaced solar panels and this provides partial shade in the summer. For some crops, the light could be reduced by half during the middle of the day without significantly reducing yield. There is so much sunlight available during the middle of the day that the plants can be light saturated. Agrivoltaics provides both electricity production and food production in these systems. This high-input agriculture approach has a promising future.”

Improving the efficiency of LEDs

Bugbee said the improvements in LEDs over the last 10 years has increased their energy efficiency to almost 90 percent.

“With further R&D the efficiency of LEDs might be increased to 95 percent,” he said. “But the rate of improvement in efficiency is going to be much less than what has occurred over the last 10 years. The perfect device would be all light and no heat. LEDs approach this, but there is still energy in the photons and there is no way to produce a photon without energy.”

Bugbee predicts two things will continue to occur with LED grow lights: a reduction in cost and an improvement in reliability.

“Reliability has largely happened,” he said. “Ten years ago, manufacturers claimed LED grow lights would last 50,000 hours, but they didn’t last as long as the high pressure sodium lamps we were using. It wasn’t the LEDs, it was some other light system component like the power supply that would fail. Those issues have been largely resolved.”

Bugbee said LED fixtures are now far more reliable and will continue to improve.

“Photons from LED grow lights are still more expensive than photons from double-ended high pressure sodium fixtures in terms of initial capital costs,” he said. “But I see the cost of LED fixtures continuing to decrease because of economies of scale.

“Optimizing the light spectrum for individual crops will also improve light efficiency, but most of the biggest advances have already occurred, at least in our laboratory research. I don’t see further spectral optimization doubling yield, but increases of 20-30 percent are still on the horizon, and every increase provides exciting new opportunities”

For more: Bruce Bugbee, Utah State University, Department of Plants, Soils, and Climate, bruce.bugbee@usu.edu; https://caas.usu.edu/labs/cpl/. Apogee Instruments Inc., https://www.apogeeinstruments.com/.

Editor’s note: Bruce Bugbee will be doing a presentation on “Principles of nutrient and water management for indoor agriculture” at VertiFarm2024, the 3rd International Workshop on Vertical Farming, in Bologna, Italy, Jan. 16-19, 2024.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.

We all know brands with products and services that represent quality. But have you ever been the person responsible for selling quality? For earning the premium price associated with producing quality products?  

Since my first job in 1996, every company I worked for, represented or owned believed they had the highest quality product in their market or class. However, I now realize that believing you have the best (even if it is true) does not mean you can convince your customer or that your customer values quality in the same way.

What does quality mean?

Dictionary definition: The standard of something as measured against other things of a similar kind; the degree of excellence of something.

Other definitions often depend on what quality represents. If you talk about a product, quality normally represents specific features. If you talk about a service, quality normally represents something that consistently meets customers’ needs. If you talk about a process, quality represents the ability to always meet specifications.

What is the problem with selling quality?

The issue with quality is that it is often subjective and based on feelings or marketing. Seldom is quality determined by objective facts. Personally, I consider quality as something that demonstrates reliability. In other words, quality is a function of performance measured over time.

Selling quality in controlled environment agriculture (CEA)

In today’s world of commercial horticulture, I struggle with the term “quality.” It seems everyone has best-in-class products and the highest quality. The situation is comical.  

Let’s break down two scenarios to determine how quality is defined. The first one focuses on consumer purchasing habits and the second on business purchasing habits and decisions.

First, let’s look at fresh produce sales and use greenhouse tomatoes as an example. Over the past few months, numerous articles have highlighted the competitive nature of the European greenhouse grown tomato industry.  

In August, the Spanish industry magazine Mecardo published this article: The Spanish tomato resists Moroccan and Dutch competition by betting on proximity and exclusivity. The piece discusses the challenges the Spanish greenhouse tomato industry faces in competing with Moroccan-grown produce. It states that Morocco has now displaced Spain and the Netherlands as the number one exporter of tomatoes to the United Kingdom. The conclusion is that Spain is losing the battle on price and that it should avoid competing on price and focus on quality, reliability, and service.  

What I find humorous is that if you are based in the Netherlands, you likely say the EXACT same things about Spanish tomatoes. The argument seems to be that if you cannot compete on price, you must have a better-quality tomato, especially in a consumer category where taste and flavor are highly subjective.  

(I acknowledge that you can measure certain qualities in tomatoes such as brix, aesthetics, size and shelf life. The question remains as to whether those qualities outweigh price when this article also states that tomato consumption is decreasing. “The sector is concerned about the decrease in tomato consumption that is occurring both in Spain and in the EU, which has fallen by 13% in volume and 2% in value in the 2021/22 campaign, according to the latest data collected by Fepex. Tomato consumption in Spanish homes has gone from 13 kilos per person in 2021 to 11.9 kilos in 2022.”)

For the second example, let’s use LED grow lights. This one is more challenging because the technology promises long-lasting reliability, but most commercial installations have not existed long enough to prove or test the reliability claims. 

Unlike other technologies in the commercial horticulture space, we have a third-party agency, Design Light Consortium, that collects performance data. Unfortunately, the agency does not always make internal unbiased testing data available.

LED grow lights have metrics we can measure and test, such as output (umols/s), efficacy (umols/joule) and spectrum. This ensures buyers get what they paid for, at least out of the box. However, this is where quality becomes a test of reliability over time. 

Anyone investing in a retrofit lighting system calculates a return on investment. The estimation compares the running hours the greenhouse uses per year against the difference in energy used at a given price per kwh. This determines the years needed to earn back the investment. If the product fails to perform at the same specification over the years, the initial return on investment becomes null and void.  

Much like the tomato discussion, the final component is price. A question that many debate today is, can the cheapest product on the market also deliver on quality claims? Even for someone deeply invested in understanding this technology, this gets confusing. 

What can be said is that the components used to build the light determines the product’s longevity. Cheaper components are less likely to deliver consistency over time. This is to be expected.

So back to the original question, what does quality mean?

You tell me. What is clear is that, in most cases, quality is more subjective than objective. Even when you can measure quality, you have to consider consumers’ interest in different levels of qualities for given products in certain sectors. Consumers continue to show they will forgo high-quality products in favor of good-quality products at a more reasonable price. This makes selling quality products a challenge.

Over the years, I have made three incorrect assumptions about quality. First, as a young sales person, I assumed that “quality” meant my product was better than competitors. And while I am fortunate enough to have only worked with high-quality products, these qualities did not always translate into a difference the customer valued.  

Second, I assumed everyone valued quality the same way I did. Personally, I always buy the best product that lasts the longest or performs better than comparable products. In other words, I only want to buy something one time. It took me years to realize that not everyone values quality and that good enough at the right price point often wins out.  

Finally, and probably most importantly, people pay premium prices for quality. This one confused me because people are complicated. Many of my customers drive the nicest cars and invest in the best homes. But when it comes to their business, they do not value every component required to operate in the same way. 

And who does? We pick and choose what’s important to us, what we can afford, and what we value. Plus, we continuously change our minds depending on the factors we face at that moment.

Ultimately, quality products need to align with the perceived value that customers derive from them. If companies cannot communicate and/or demonstrate the value proposition of their products, they will not achieve their desired premium pricing.  

If you are burdened with selling quality, my thoughts are with you. After 26 years of selling, my advice to you is simple:  

First, make sure the product you sell has multiple features that represent the qualities your clients want. Second, constantly listen to your customers and relay new information back to your company. Be transparent and truthful with your customers. They will value this as a premium service, which should never be overlooked.  

And, finally, I hope you are successful. If we have a chance at being environmentally sustainable, we need products to last longer. We cannot continue to live in a throw-away world.

Urban Ag News looks to hear from you.

The H-2A agricultural guest worker program may be an option—but it’s going to cost you.

During the AmericanHort Impact Washington Summit in September, over 120 people from 25 states came to Washington, D.C., to discuss with their elected officials the major issues facing the horticulture industry.

“Summit attendees had nearly 160 meetings with lawmakers and their staffs,” said Craig Regelbrugge, who is executive vice president advocacy, research, and industry relations at AmericanHort. “Every conversation on the Hill during the Summit, at the heart of it was discussion of workforce challenges in the horticulture industry. Labor was very much front and center. Unfortunately, for the horticulture industry and agriculture in general, we are not in a particularly conducive environment for optimism about broad-based immigration, labor and workforce reform.

“Of the primary issues discussed, most of the conversations started with an acknowledgement of the importance of not shutting down the government. Typically, that’s not a horticulture industry lobbying priority.”

While much of the news about the government shutdown was related to federal workers and government contractors who wouldn’t be paid or would be furloughed, Regelbrugge said there are definite implications that a shutdown could impact the horticulture and agriculture industries related to labor.

“If a government shutdown occurs that will result in the Department of Labor (DOL) stopping the processing of H-2A agricultural guest worker applications,” he said. “The staff processing H-2A applications for labor certification are not viewed as essential workers and they are not user-fee funded. It is funded through general appropriations.”

Regelbrugge explained the reason a government shutdown matters is all based on timing.

“Particularly for greenhouse growers and some nursery growers in warmer climates, it is very common that these growers have their job orders starting close to Jan. 1. With greenhouse plant production during January and February, growers are starting to gear up for planting and preparing to ramp up their operations.

“Most people start the H-2A application process, which is the first step in using the program, about 90 days out, which brings the initial start to around Oct. 1. If a government shutdown occurs and lasts a day or two, the impact would be minimal. But if the government shuts down for several weeks, it would contribute to application processing delays that are going to be particularly challenging for H-2A program users.”

A short-term spending bill was signed by President Biden on Sept. 30 just hours before a federal government shutdown would have taken affect. Lawmakers now have a 45-day extension to come up with some type of long-term funding legislation.

A costly, inflexible program

Regelbrugge said the existing H-2A program is costly and the situation has gotten dramatically worse this year with new DOL rules.

“The wage structure is a key element of the cost problem,” he said. “But the cost problem is bigger than just a debate about how to properly set wages. The wage setting process got worse as a result of a DOL rule that took effect at the end of March.”

A second problem with the H-2A program is its lack of flexibility for jobs that don’t meet DOL’s current arbitrary definition of seasonality.

“DOL has always interpreted and implemented the H-2A program wrongly,” Regelbrugge said. “The actual underlying statute talks about workers coming in temporarily to fill jobs on a temporary or seasonal nature. DOL has implemented the law as temporary and seasonal.

“While there is not a hard-and-fast definition, the way that DOL interprets seasonal-based on some court cases as 10 months or less. Considering controlled environment and warmer-climate production, DOL often asserts crops can be grown year-round and the work isn’t seasonal. DOL is increasingly questioning seasonality and throwing up barriers over its interpretation of seasonality.”

Another issue facing growers trying to use the H-2A program is related to worker housing.

“The decision to implement the H-2A program typically means that an employer has to provide worker housing,” Regelbrugge said. “Housing is a major capital investment. In many parts of the country, it is difficult to gain approval. California and Oregon are two states where receiving farmworker housing approval through local zoning laws is extremely difficult. Regardless of the location, acquiring housing can be challenging and costly.”

In fiscal year 2022, DOL certified about 370,000 temporary jobs under the H-2A program. The program has rapidly expanded over the last 12 years. In 2010, about 79,000 workers participated in the program. Of the positions filled in 2022, 35 percent of the total jobs available were certified in Florida, California and Georgia. USDA Economic Research Service reports H-2A growth is uneven across the United States with larger employment changes in the Southeast than in other regions.

“More growers are looking at the H-2A program because the labor situation is becoming more dire and it is the only safety net,” Regelbrugge said.

Increased use of labor contractors

According to ERS, farm labor contractors account for a growing share of H-2A employment. These contractors directly employ farmworkers and lease their services to farms. ERS found that H-2A employment by contractors increased from 15 to 42 percent between 2010 to 2019. Although H-2A employment by contractors increased across all crop sectors, those that saw the biggest increases occurred with fruit, vegetables, tree nuts and melons.

“Because of the complexity of the program, most employers turn to a third-party intermediator of some type to handle the paperwork and application process,” Regelbrugge said. “They are involving a third-party agent or facilitator, which involves a cost. There are application fees and costs each step of the way.

“When workers are approved, employers have to pay for inbound and outbound transportation. Traditionally this has been from Mexico, where for many workers, bus transportation is the most cost-efficient option. When workers start coming from southern Mexico and Central America, then it may become a case of air transportation. Once the workers are here, there is transportation plus daily subsistence, providing or subsidizing meals.”

In addition to these expenses, employers have to pay a premium wage, which Regelbrugge said is typically well above what would traditionally be considered typical market wages.

Impact of more food imports

Regelbrugge said labor force constraints are impacting agriculture production in the United States, particularly with fruits and vegetables.

“These are labor-intensive crops,” he said. “With the absence of labor solutions, more food production is likely to end up moving offshore because production can’t be sustained here without the necessary labor at a cost that still allows U.S. growers to compete.”

USDA reports the value of U.S. agricultural imports grew by 17 percent in 2021 from 2020. Horticultural products accounted for 52 percent of U.S. agricultural imports in 2021. These imports included fruits, vegetables, tree nuts, wine, spirits, essential oils and nursery stock. In 2021, sugar and tropical products, including coffee and cocoa, comprised 15 percent of U.S. agricultural imports.

“U.S. producers of fruits and vegetables are squarely in competition with imports and are most vulnerable,” Regelbrugge said. “U.S. producers do have comparative advantages. What U.S. growers are doing successfully, in terms of foreign competition, comparative advantages outweigh disadvantages. These advantages include the stability that comes with U.S. food safety laws and structures, nearness to market, lower transportation costs because of nearness to markets, consumer appeal and demand for U.S.-grown products and to the degree that the market values. We have these comparative advantages, but labor costs are a tremendous disadvantage.”

The National Council of Agricultural Employers did an analysis that compared wage rates in the U.S. under the current H-2A program with wages typical in Canada and Mexico.

“In Mexico the fruit and vegetable production for export is exploding and Canada has long been a head-to-head competitor,” Regelbrugge said. “The labor cost disadvantage facing American growers is huge. Anything that makes that disadvantage worse is going to cause more growers to tip to the other side of the equilibrium. When the comparative advantage of being a domestic producer is no longer as efficient, more farms will close and production will move offshore and will be captured by foreign producers.”

USDA implements labor stabilization program

USDA Farm Labor Stabilization and Protection Pilot Program (FLSP) will award up to $65 million to provide support for agricultural employers to implement “robust” labor standards to promote a safe, healthy work environment for U.S. workers and workers hired from northern Central American countries through the seasonal H-2A program. FLSP aims to improve food and agricultural supply chain resiliency by addressing the challenges agricultural employers are experiencing with labor shortages and instability.

The goals of FLSP include:

1. Drive U.S. economic recovery and safeguard domestic food supply by addressing current labor shortages in agriculture.

2. Reduce irregular migration from northern Central America through the expansion of regular pathways.

3. Improve working conditions for all farmworkers.

The 2023 FLSP grant application period closes Nov. 28, 2023.

For more: Craig Regelbrugge, AmericanHort, craigr@americanhort.org; https://www.americanhort.org/.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.

This article is first because I firmly believe labor is the biggest challenge we face today, as well as for the next 10 years in controlled environment agriculture (CEA), and in commercial horticulture and general production agriculture.

Victor Loaiza Mejia posted the following on LinkedIn on August 10, 2023: 

“I disagree with your assessment of the lack of ‘grower or production leadership’. Traditionally the greenhouse industry has had a legacy program (like Ivy League College) that benefited growers that come from outside the NAFTA countries. The local younger generation of growers and operators need opportunities to grow into these positions. They need mentoring and support.

“My vision of protected agriculture is more regional (USA, Canada, Mexico) than only thinking about the USA. As you mentioned in the article, the growing surface has decreased in the US but has increased in Mexico for example. The oldest greenhouse companies operating in the US and Canada are now some of the largest tomato marketers in the USA, purchasing greenhouse produce in Mexico at a very large scale, without really having ‘skin in the game.’ I see this as a big entry barrier for new companies based in the USA.

“The opportunity for small greenhouse companies is to resist the push to buy the newest closed greenhouse and buy only the necessary technology and develop their local market. Creating Cooperatives style of relationships with other small growers might be beneficial.”

Well, Victor, yes. That’s really all I have to say. Yes, I agree. I should have and could have selected my words better, while also providing more details behind my statement. If I would have, you would have seen that we are saying almost the same thing.

Now that we officially agree, let’s break this conversation down into the realities that drive the factors you highlight.

Where did the head growers, production managers, and vice presidents of operations come from in the U.S. controlled environment agriculture industry?  

The U.S. greenhouse vegetable industry started in the early to mid 1980s. (The Canadian greenhouse industry started a few years prior, and the Mexican greenhouse industry began about 10 years later.) Initially, the industry was almost 100% focused on growing tomatoes. Much of the industry was built off importing not only Dutch greenhouse technology, but also Dutch growers who were equipped with the training and knowledge needed to operate this new technology.  

As years went on, the U.S. continued to attract growers from the Netherlands, as well as nearby areas such as the United Kingdom and Belgium, which also had well-established glasshouse industries. Many of these early immigrants were well experienced with some education. They were young males eager to make their mark on a new industry in a new world thought of as “the land of opportunity.”

Now these same individuals have been in our small industry for 30-40 years. They are getting close to retirement, but many still work. This is an important part of Victor’s criticism and if you compare it with the graph below, you see why they have aggressively held on to positions of power.  

The industry does not have enough companies that can pay them the money they want or to promote others into key positions, while protecting their own careers and those of their friends. (Nothing new here. This occurs in all industries. Normally, industries have more companies and the impact is not so drastic.)

What about the other skilled labor needed to profitably operate a greenhouse vegetable facility?

Greenhouses require lots of skilled labor to operate successfully, especially when the operations are anywhere from 10-200 acres. You need IPM managers, labor managers, assistant growers, junior growers, packhouse managers, logistics managers and more. The list goes on and on. 

So where did these people come from? In many or most cases, Mexico. In the 1990s, the largest vegetable greenhouses in the U.S. were in southwestern Texas and southeastern Arizona — a short drive from the U.S.-Mexico border. This attracted young, educated Mexican (again mainly) men to jobs that paid well, provided year-round employment (not always the case in agriculture) and opportunities to work in a highly technical field that showed promise for advancement.

Now fast forward 30 years. These guys are ready and prepared to take over, but there are not enough opportunities for everyone to be in charge. This also means that as new companies open, we have a lack of ongoing opportunities to attract talent and give individuals chances to grow and develop the skills needed to run smaller or more niche organizations.

A change in politics. A change in opportunities. H-2A.

Simultaneously, we have seen a shift in our ability to bring labor into the United States. U.S.-based agriculture businesses rely heavily on worker visa programs to bring in groups of individuals to work jobs not often desired by locally available workers. The H-2A program allows U.S. employers or U.S. agents who meet specific regulatory requirements to bring foreign nationals to the United States to fill temporary agricultural jobs. (The word “temporary” is key!)  But, this program and our attitude toward migrant workers has shifted significantly over the past 30 years.  

According to the USDA, “Hired farmworkers make up less than 1 percent of all U.S. wage and salary workers, but they play an essential role in U.S. agriculture. According to data from the 2017 Census of Agriculture, wages and salaries plus contract labor costs represented just 12 percent of production expenses for all farms, but 43 percent for greenhouse and nursery operations and 39 percent for fruit and tree nut operations.”

The tightening of our southern border means that we rely on the H-2A program more than ever.  According to a July 2023 article in NPR, “The number of guest worker visas issued each year has more than quadrupled over the past decade. But the program is rife with labor rights violations, and farmers who have come to depend on it don’t love it, either.”

As I stated before, U.S.-based greenhouse producers are competing directly with Canadian greenhouse growers, as well as Mexican greenhouse producers, for consumers’ wallets in produce aisles across the United States. This means, as the American portion of the greenhouse-grown industry, we need to be conscious of all costs (of which labor is a significant portion). It is safe to say that we have learned and can confirm that locally available labor is not as efficient as the labor we get through worker visa programs. 

Why is local labor not as efficient as our immigrant workforce?

I will not even attempt to answer this question. But, what I can report is that through interviews with major greenhouse tomato growing operations, it is estimated that you need 3-4 times the amount of local labor as you do immigrant, migrant or visa workers. (This number seems true regardless of pay and benefits, based on information we received from the recently announced bankrupt company AppHarvest.) 

Conversations with on-site labor managers makes me believe that one main reason this perception exists is because this talent pool is seen as an unskilled labor force. Labor managers all agree that is far from the truth. The truth is, many of these individuals are skilled based on experience gained at other farms. These skills make them eager to be employed based on “production output,” as they recognize that their production compensation will far out pace any hourly rate that they might be paid.

According to USDA statistics from October 2022, the H2A program has expanded since 2005. But has it expanded enough to keep up with the demand? Especially the demand of the controlled environment agriculture sector?  

Even if we could keep up with demand in the greenhouse (or vertical farm), these programs do not allow us to address the issue of finding talented operational managers with experience to run the facility based on the current glass ceilings that appear to be in place.

So questions around labor, management and leadership remain for the U.S.-based controlled environment agriculture industry. From finding the experienced staff needed to operate an efficient greenhouse to providing the most talented in that group the opportunity to advance and excel. 

And Victor, my response to your comment remains “yes.” Now my question back to you is, how will you and your contemporaries lead our industry in change?

Urban Ag News would love to hear from you.  Please let us know your thoughts and comments.

OptimIA project members are sharing their indoor farm research findings with the controlled environment agriculture industry and the public through a variety of educational and informational outlets.

The indoor farm industry is very fluid right now with changes occurring on a weekly basis. New companies are starting, some are leaving the industry, while others continue to receive millions of investor dollars to expand their operations. While financial stability is a key factor in the sustainability of some of these businesses, the need for production- and economic-related information is crucial to profitably producing quality leafy greens crops. Those with the financial backing have been able to develop and implement their own technology to produce indoor crops. New indoor farm growers, existing operations with limited financial resources, and even large-scale farms already in operation continue to look for sound production- and economic-related information that they can apply to their businesses.

Improving the indoor farm industry

In 2015 when members of the OptimIA project team initially submitted a USDA Specialty Crop Research Initiative grant proposal for funding, the primary focus of their research was on the production of leafy greens in indoor farms, but the focal points were moderately diverse.

“We went through the proposal submission process for several years before USDA approved the grant for the OptimIA project,” said Erik Runkle, who is project director and a horticulture professor at Michigan State University. “The proposal that was finally approved was to study the aerial environment as well as economics for leafy greens grown indoors. The aerial environment refers to air circulation, humidity, carbon dioxide concentration, light and temperature.”

One of the major objectives of the OptimIA project was to focus on industry outreach.

“The outreach program objective was to engage with stakeholders in the indoor vertical farming community,” Runkle said. “Prior to submitting the proposal to USDA, the project team members worked with an industry advisory committee and stakeholders from the indoor farm community.”

OptimIA team member Chieri Kubota, who is a professor and director of Ohio Controlled Environment Agriculture Center (OHCEAC) at Ohio State University, said proposals submitted for USDA Specialty Crop Research Initiative (SCRI) grants usually require both a strong research and outreach focus.

“USDA SCRI-funded projects focus on problem solving to move a specific industry forward,” Kubota said. “Not only is the research important, but also implementation of research findings in the industry sector. This is basically outreach extension. The proposals cannot just focus on research alone. It is important to have strong outreach activities.”

Multiple outreach activities, educational materials

Even before the grant proposal was submitted to USDA, OptimIA team members had already begun interacting with members of the indoor farm industry.

“We had been engaging stakeholders as a sort of proposal activities,” Kubota said. “We started doing the Indoor Ag Science Café almost a year in advance of submitting the grant funding proposal. That way we were engaging our stakeholders trying to develop a community educational platform that was a main activity. Indoor farm growers and equipment manufacturers are the general target audience of the project’s research. Team members are also constantly answering questions from growers and venture capital companies regarding indoor vertical farms.”

The OptimIA website includes a variety of educational materials including Research Highlights articles , scientific research journal publications and trade magazine articles, including Urban Ag News.

The OptimIA team members have also shared information from their research at various scientific- and grower-focused industry conferences. In July several members shared their research findings at Cultivate’23 during an educational workshop on the Essentials of Hydroponics Production: A tHRIve Symposium.

Team members have also been developing online educational materials under OptimIA University, which include YouTube videos.

“We have posted several lectures with topics based on discussions among the project members,” Kubota said. “The concept of OptimIA University is free access to whoever wants to use the online materials. The grower sector is the targeted audience.

“Rather than offering courses for a fee, we decided to make the information available to everyone, including growers and other companies that want to use it to train their employees. It consists of YouTube video lectures with pdf slides and additional reading materials. The OptimIA University website is about half completed and there are other course lectures still pending.”

The OptimIA researchers also hold an annual invitation-only stakeholder meeting.

“The annual meetings are specifically for our advisory committee which gives team members an opportunity to share information about the research in progress and that has been recently completed,” Runkle said. “It’s also an opportunity for the committee members to provide feedback and guide future project activity.

“We also invite growers and company representatives who we have worked with in some capacity on research projects. This includes growers with whom we may have conducted research trials or representatives from companies that have provided us with equipment or supplies used in our research.”

Educating the public

Even though the primary focus of the OptimIA project outreach program is members of the indoor farm industry, the team members also extend their educational activities to the general public.

“OptimIA researchers at Ohio State participated in the COSI Science Festival organized by the Columbus Museum of Science and Industry,” Kubota said. “This is a community STEM educational event in which companies and scientists participate and showcase their technologies and science. It is held in May over multiple days. We participated as an OptimIA group. We showed how leafy greens can be produced using different hydroponic systems with LED lights. OptimIA team members at Michigan State University and at University of Arizona have also done similar STEM programs related to hydroponic crop production for the public.”

For more: Erik Runkle, Michigan State University, Department of Horticulture; runkleer@msu.edu; https://www.canr.msu.edu/people/dr_erik_runkle; https://www.canr.msu.edu/profiles/dr_erik_runkle/cell. Chieri Kubota, Ohio State University, Department of Horticulture and Crop Science; kubota.10@osu.edu; https://hcs.osu.edu/our-people/dr-chieri-kubota; https://ohceac.osu.edu/. OptimIA, https://www.scri-optimia.org/.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.

Cannabis water use efficiency (WUE) refers to the amount of water a cannabis plant uses to produce a certain amount of biomass or yield. Supplemental light, such as artificial lighting in indoor cultivation, can have significant effects on a plant’s water use efficiency. 

Here’s how:

1. **Increased Photosynthesis:** Supplemental light, especially in indoor growing environments, can enhance photosynthesis in cannabis plants. When plants can capture more light energy, they can convert more carbon dioxide and water into sugars and other organic compounds. This increased photosynthetic activity can potentially lead to improved water use efficiency, as more water is used for productive processes.

2. **Transpiration and Stomatal Regulation:** Transpiration is the process by which water is released from a plant’s leaves through small openings called stomata. These openings also allow for the exchange of gasses, including carbon dioxide and oxygen. When more light is available, plants often open their stomata wider to take in more carbon dioxide, which can lead to increased water loss through transpiration. This could potentially decrease water use efficiency if not properly managed.

3. **Optimal Lighting Management:** To maximize water use efficiency under supplemental light, it’s important to manage light levels effectively. Providing the right amount of light for the growth stage of the cannabis plant can help maintain a balance between photosynthesis and transpiration. Using light intensity and duration strategies, growers can optimize the plant’s ability to produce energy while minimizing excessive water loss.

4. **Growing Medium and Watering Techniques:** The choice of growing medium (soil, coco coir, hydroponics, etc.) and the watering techniques employed can also influence cannabis water use efficiency. Proper substrate choice and irrigation practices can help regulate water availability to the plant roots, preventing both water stress and waterlogging — both of which can impact WUE.

5. **Genetics and Environmental Factors:** Cannabis cultivars vary in their response to light intensity and other environmental factors. Some strains may exhibit better water use efficiency under supplemental light compared to others. Additionally, environmental conditions such as temperature, humidity, and CO₂ levels can also influence water use efficiency.

To push these limits, Callado and Hernandez regulated and analyzed the quantity and demand of resources and plant growth factors on an ongoing basis. They added light and water-control and measuring capabilities to every plot in the greenhouse, in addition to measuring temperature and evapotranspiration. 

As shown in Figure 1, the cannabis crops were grown under four light levels using two Current dimmable fixtures per plot supplementing sunlight. The L1000 PPB lighting fixtures delivered uniform supplemental light intensities of 150, 300, 500, and 700 μmol m⁻² s⁻¹ for 18 hours, while the Daily Light Integral (DLI) from the sun and LEDs were on average around 18, 30, 40, and 52 mol m⁻² d^-1. However, they present preliminary results for the three highest light levels. 

Moreover, the fertigation system was triggered independently at each plot when the pots’ water container capacities were 80%. This maintained consistent water and nutrient levels in pots regardless of the crop growth rates. Finally, the water use was quantified with load cells (scales) under the plants.

The Results and Conclusions

It’s easy to conclude from known knowledge that the impact of supplemental light on cannabis water use efficiency can be complex and depends on various factors, including light intensity, duration, genetics, and environmental conditions. Proper management of these factors, along with optimized growing practices, can help improve water use efficiency in cannabis cultivation. 

As the cannabis industry continues to evolve, research and experimentation in this area will provide more insights into how to achieve the best water use efficiency outcomes.

The results from Callado and Hernandez suggest that increasing the light amount not only increases the number of branches or cuttings per plant but also could increase the water demand (Figure 2b) and water-use efficiency to produce cuttings (less water per cutting) (Figure 2b). 

In other words, plants grown under an average DLI of 30 mol m^-2 d^-1 for 21 days produced close to 29 cuttings per plant, while plants grown at 52 mol m^-2 d^-1 produced 47 cuttings per plant from new secondary branches. 

Furthermore, plants grown under 30 mol m^-2 d^-1 produced 2.5 cuttings per every liter of water, while plants grown under 52 mol m^-2 d^-1 produced 4.3 cuttings per the same liter of water. This means the crops were more efficient at transforming water into branches under higher light intensities.

So how does this impact commercial growers?

The current research highlights the ability of a cannabis crop to use higher light levels to increase yield and water-use efficiency (higher yield per liter of water). The water-use efficiency for cutting production went from 2.5 to 4.3 cuttings per liter of evapotranspirated water when growing plants under 30 versus 52 moles of light per day, respectively. This would mean that to produce 100 cuttings using 52 moles of light, growers needed 23 liters of water instead of 40 liters under 30 moles of light. 

Figure 1. The top-left picture shows the experimental layout and greenhouse with two L1000 PPB fixtures at each plot or light treatment area (12 plots in total). The top-right picture shows a plot sensor that measures light from the two LED fixtures and the sun. The bottom pictures and arrows represent typical cannabis flower and plant production cycles.

Figure 2 shows the number of secondary branches or cuttings (a) water use per plant, (b) water-use efficiency (branches or cuttings per liter of water) and (c) under three light levels (30, 40, and 52 mol m⁻²) using LED lighting in addition to the sunlight.

To see other research from Hernandez and Callado, please follow this link:  www.gecurrent.com/eu-en/inspiration/researching-the-impact-of-supplemental-lighting-on-cannabis-production

OptimIA researchers are using crop modeling to identify the most favorable environmental parameters for growth and yield of indoor farm lettuce crops and how to prevent tipburn.

One of the research objectives of the OptimIA project, which is being funded by USDA to the tune of $2.4 million, is to study the aerial environment for producing indoor leafy greens. The aerial environment refers to air circulation, humidity, carbon dioxide concentration, light intensity, and temperature. Prior to preparing the project proposal, members of the OptimIA team surveyed stakeholders of the indoor farm industry to identify the challenges and needs of the industry.

“There was a lot of feedback related to environmental parameters, especially airflow,” said Murat Kacira, an OptimIA team member who is director of Controlled Environment Agriculture Center and professor in the Biosystems Engineering Department at the University of Arizona. “The indoor farm industry had a real need for optimizing the environmental variables related to light, temperature, humidity management and control. Leafy greens growers wanted to be able to understand plant growth, quantify the plant response, yield, as well as the quality attributes under various environmental conditions.”

Crop modeling predictions, potential

Kacira explains crop modeling is simply crop growth and yield prediction.

“Given setpoints for air temperature, photosynthetic active radiation, humidity, carbon dioxide enrichment, we were able to model crop growth and predict the kilograms or grams of lettuce yield on an hourly or daily basis and also at the end of the production cycle,” he said.

Kacira’s lab used modeling to focus on plant growth and yield predictions for lettuce in indoor vertical farms considering environmental variables, including temperature, humidity, carbon dioxide level and light intensity.

“Considering the co-optimization of different environmental variables, there are many combinations of those setpoints that are possible,” he said. “It takes a lot of time and effort to study all those combinations. A model we did was focused on plant growth and yield prediction for growing lettuce in indoor vertical farms considering environmental variables. Using modeling can help to narrow down the combinations or the possibilities that can occur.

Another modeling study enabled Kacira to identify the possibility of dynamic carbon dioxide enrichment.

“We looked at whether carbon dioxide enrichment should be done for the full production cycle from transplanting to little leaf harvest or whether it should be done during different phases of production leading to savings either for electrical energy or carbon dioxide use,” he said. “Also, we considered how carbon dioxide enrichment and control would be incorporated with lighting controls. For example, can the light be dimmed while increasing the carbon dioxide level to achieve a similar yield outcome, but with a control strategy enabling electrical energy savings during production.”

Determining best airflow distribution

Kacira is also using modeling and computer simulations to study airflow and airflow uniformity to design alternative air distribution systems to improve aerial environment uniformity and to prevent tipburn in lettuce crops.

“Early on we used computational fluid dynamics (CFD) space simulation and modeling to study airflow,” he said. “We looked at some existing air distribution systems to understand what would be the environmental uniformity and aerodynamics in indoor vertical farms. Then we studied what-if scenarios. We developed design alternatives that can deliver optimal growing conditions with improved aerial environment uniformity and help prevent lettuce tipburn.

“Our CFD simulations and experimental studies confirmed that vertical airflow compared to horizontal airflow was more effective reducing aerodynamic resistance with improved airflow and transpiration, thus preventing tipburn in lettuce.”

Some of the outcomes determined by Kacira and his team have been presented to OptimIA stakeholders and CEA industry members through seminars, webinars and research and trade publications. Kacira will continue using computer simulations, modeling, and experimental studies to design and test more effective localized air-distribution methods, environmental monitoring, and control strategies for indoor vertical farms.

Production techniques for preventing tipburn

Chieri Kubota, who is a member of the OptimIA team and professor and director of the Ohio Controlled Environment Agriculture Center at Ohio State University, and graduate student John Ertle studied various techniques for reducing or preventing tipburn. These techniques have application to lettuce crops produced in indoor farms and greenhouses.

“Growers can reduce the light intensity at the end of the production cycle to mitigate the risk of tipburn,” Kubota said. “If growers want to reduce tipburn and they can tolerate reduced yields, they can lower the light intensity towards the end of the production cycle.

“For example, when the daily light integral (DLI) was reduced by 50 percent for the final 12 days of production (out of 28 days), the incidence of tipburn can be largely reduced for cultivars sensitive to tipburn-inducing conditions. However, this approach reduces the yield and likely the quality of lettuce, while reducing the loss by tipburn. Therefore, efficacy of this approach is dependent on the cultivars and their growing conditions. More research needs to be done to refine this approach.”

Another technique growers can use to prevent tipburn is to stop growing lettuce before it enters the final 1½ weeks of the six-week growing period. This is what many growers are doing because they can’t take the risk of tipburn occurring. Plants are being harvested at this young stage.

Among the techniques that Kubota and Ertle examined, they found that the most effective in preventing tipburn was using vertical airflow fans. This technique was originally discovered by a research group at University of Tokyo in the 1990s and implemented into greenhouse hydroponics at Cornell University.

“We confirmed that when vertical airflow is applied under conditions that highly favor tipburn induction, tipburn can be prevented very effectively,” Kubota said. “We created an environment based on our previous knowledge which always induces tipburn. We confirmed the use of vertical airflow fans reduces tipburn.”

For more: Murat Kacira, University of Arizona, Controlled Environment Agriculture Center; mkacira@arizona.edu; http://ceac.arizona.edu/.

Chieri Kubota, Ohio State University, Department of Horticulture and Crop Science; kubota.10@osu.edu; https://hcs.osu.edu/our-people/dr-chieri-kubota; https://ohceac.osu.edu/. OptimIA, https://www.scri-optimia.org/.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.

OptimIA at Cultivate’23

If you are attending this year’s Cultivate’23, July 15-18 in Columbus, Ohio, you have the opportunity to hear OptimiA researchers, including Murat Kacira and Chieri Kubota, discuss some of the findings of their research. They will be speaking during the Essentials of Hydroponics Production – a tHRIve Symposium on Saturday, July 15 from 8-11 a.m.

The U.S. controlled environment agriculture (CEA) industry received lots of publicity over the past 10 years. From interviews on CNBC to articles in Forbes, investors and the general business community found interest in an industry that seemed new despite the fact that it was anything but.  

(If you are interested in the definition of and more information on the controlled environment agriculture and the indoor ag tech industry, please click here.)  

This new interest led to substantial capital invested into greenhouses, vertical farms, and other companies supporting the commercial ag-tech and horticulture industry. All this “noise” made it hard to discern what was real, hype or fabricated by overly creative (yet inspiring) pitch decks.

From this point forward, we must focus on a reset of known information. One that clarifies the reality of our U.S.-based commercial food producing horticulture market. This reset must take into account the benefits of all the money invested between 2017-2022 that led to building new farms.  

More importantly, it must encourage people, investors and business innovators to continue focusing on the benefits (mostly to growers or farmers) of our small but still-growing controlled environment agriculture industry.  

Note: The following information mentions ornamental and cannabis production because these segments contribute to our industry. However, they are not often included in the definition of controlled environment agriculture, indoor ag or vertical farming.

Industry Realities

Let us start with a handful of observations that you are free to comment on below.  We will do our best to respond as quickly as possible.

1) The cannabis industry began its path to legalization in 1996 when California legalized medical marijuana. Since then, 40 states followed California in legalizing medicinal use. But the real industry boom began in 2012 when Colorado and Washington legalized recreational use of cannabis.  

As of June 2023, 23 states have legalized adult cannabis use. This rapid growth impacted all commercial horticulture because growing cannabis uses the same inputs as all other crops. As such, the industry saw a drastic uptick in the sale of greenhouses, horticulture equipment, irrigation equipment, horticultural lighting and crop consumables (i.e., fertilizers, substrates and pest management products). 

The industry also saw massive expansion of companies providing wholesale supply, as well as new horticultural tech companies growing quickly with higher-than-normal profit margins.

• Overly high profit margins on the supply side were due to extremely high profits made by cannabis farmers. This happened because of a few key issues that we likely will not see again. The first was rapid farm expansion due to a race to be first in the market. Second is the semi-legal or illegal status of many farms, which always leads to high profits. And, finally, an emerging market was learning how to be commercial. Early-stage investors saw get-rich opportunities and spent almost anything to move their project to the front of the line. 
• The total acreage of legal cannabis production in the U.S. is small compared to commercial ornamental and food crops. In 2021, the average size of a commercial cannabis production operation was 33,900 ft squared (or about ¾ of an acre.)
• As more states legalize cannabis production, the increased volume of legally available weed continues to drive down the price per pound. As this price decreases, ag-tech equipment and supply companies also feel the pinch as operators become more aware of what they’re buying. (I am sure this makes perfect sense to anyone involved in agriculture. A perishable product’s price drops as availability increases.)

2) U.S. interest in vertical farming exploded in the mid-2000s. This was due in part to investment in and formation of Aerofarms in 2004; Dickson Despommier’s 2008 lectures and 2010 book; and numerous inspirational articles, architectural images, and stories from countries concerned with food safety and security. (See the Japan earthquake and tsunami of 2011.)

• All this (plus much more) inspired entrepreneurs, engineers, and technologists with little to no commercial agriculture experience to create business concepts and then pitch them to investors.
• Many of these pitch decks were based on successful Silicon Valley start-up business models that, to date, have struggled in the commercial horticulture and agriculture spaces.
• The investor market was blindly hungry for these ideas. The timing was perfect. At the same time, macroeconomic and political discussions were happening around the world. In 2004, the term “ESG” (environmental, social and corporate governance) was coined and used in a joint initiative led by the United Nations and 20 financial institutions. This report was titled “Who Cares Wins.” The financial industry believed investing in companies that embodied this strategy would win. After all, it would create resilient companies that contribute to sustainable developments, while strengthening the position of the stakeholder and bank. Not long after this, we started hearing thought leaders ask, “How are we going to feed 10 billion people by 2050?”  

3) The Netherlands Increased marketing and the promotion of venlo-style, Dutch-designed glass greenhouses as a proven and safe investment for growing select fresh produce. This coupled with early semi-automated leafy green production systems and unique placement of rooftop greenhouses (see Gotham Greens/Whole Foods partnership in 2013), plus the early failures of multiple vertical farms, led to the next round of investments.

• The Dutch horticulture industry was initially left out of the big spending.  While they have a long history in horticulture production, the new concepts, crops and money were focused on growing in a unique way. By 2015-2017, the Dutch industry knew they had to be more involved and worked together to improve their market position and awareness. By 2020, leading Dutch companies and Wageningen University Research (WUR) published a report comparing four cultivation methods. Using their interpretation of Sustainable Development Goals (SDGs as defined by the United Nations), it was determined (and then heavily marketed) that “high-tech greenhouses with soilless cultivation, where recirculation of drain water is obligatory, substantially contribute to achieving SDGs.” Read the full WUR 2021 report here.
• Many of these systems did not live up to their marketing claims. Companies did not have the experience to work with or provide guidance on localized issues such as crops, weather (not climate), labor and after-sales service.
• It takes many years to develop crop expertise in each system and for a labor team to come together and operate a growing system that produces the highest possible yields. When done at commercial scales, no proven technologies allow a farm to shortcut these realities.

4) Controlled environment agriculture went “public” and investment firms stepped up with BIG capital. This sparked big interest and even bigger promises from companies looking to get a piece of the money pie. From greenhouse operators such as AppHarvest and Local Bounti, to supply companies such as Scotts Miracle-Gro (owner of Hawthorne Gardening Company) and Hydrofarm, to investment firms such as Equilibrium Capital, COFRA Holdings and Cox Enterprises, the dollars invested in the industry raised to levels never seen before. We all know that when significant dollars get injected into a market, it often leads to “boom” level interest.  (See David Chen’s 2021 comments.)

• Many people are responsible for making this happen. From traditional banks facilitating the IPO to recognizable investors to famous personalities, these large investments and public offerings did not happen because a couple farmers decided to take their proven farm public. They happened because of good old-fashioned capitalism and marketing. They happened because people can be inspired by good storytellers. They happened because the financial markets were ripe for such a move.

5) Cheap, abundant capital along with over-promising suppliers and so-called expert consultants chasing dollars led to a boom-industry mentality.

• Interest rates in the 2010s through the early 2020’s were at historical lows.  
• There was (and is) lots of cash available looking for annual returns of 10-15%. (In other words, lots of rich people were and are looking for passive income.)
• The pandemic helped the situation due to significant amounts of capital injected into the economy. From retail cannabis sales to garden centers to grocery stores, this cash created a boom for everyone in the supply chain that supported these markets.

A brief history of CEA fresh produce production and greenhouse tomato example

In 2005, UC Berkeley professors Roberta Cook and Linda Calvin published a paper titled, Greenhouse Tomatoes Change the Dynamics of the North American Fresh Tomato Industry. For purposes of this discussion, we will use this paper as a foundation to define industry growth. Reason being, many of the largest investments went into companies that were farms based on assumptions gained from years of CEA industry data. 

The reality of this data is that prior to 2010, most of it was based on producing greenhouse tomatoes. Historically, this was a high cap-ex industry with low profit margins that relied on careful cost control, operational excellence, high yields and old-fashioned luck.  

The above paper also correctly defines the market as a North American one since the product produced in these facilities competes directly with their field-grown competitors for sales and shelf space. It also stated that U.S.-based greenhouses will be forced to compete with products grown in Canada and Mexico.  

All this remains true today (regardless of crops grown). In 2003, about 1,630 acres of greenhouse tomatoes were grown in the U.S. Twenty years later, our data shows a 20-30% drop in this figure. What changed during this time is the number of crops grown at a larger scale. The addition of more peppers, cucumbers, strawberries, leafy greens, and culinary herbs means that the greenhouse production area has increased to about 2,150 acres.  

This means that even with all the money spent over the past decade, our production area only increased about 20-30%. It is also important to note that we are not considering the metric tons produced on these acres. Yield improvements of about 20-40% (depending on crop) have been seen over the past 20 years.  

The take home message should be, Americans are consuming more tomatoes.  American retailers are just importing more and more of them each year.  Even the ones we grow in a greenhouse.

Greenhouse Grower recently released an article showing their account of the largest greenhouse vegetable growers. While we think this is a good start, our data shows their information is slightly understated, somewhat incorrect and easy to misinterpret.

We estimate that the USA CEA production area by acres is +/- 2200 acres.  We are excluding vertical farms due to lack of data.  And we do not count structures that do not have 4 walls, a door and some means of mechanically managing the environment.  This means we do not count hoop houses, but we acknowledge there are many successful farmers using hoop houses to profitably produce crops across the USA.

Why all this matters

For companies such as Urban Ag News, we are built on the hopes that our U.S.-based controlled environment agriculture industry is sustainable and capable of continued growth. Our data indicates that we still have work to do before we can be considered an independent industry. (We depend on the global commercial horticulture industry, including the ornamental and cannabis industries, to be viable.)  

Additionally, the data shows that ag-tech investments face fundamental problems. (See Agfunder Report  and state of CEA investments in this article in Produce Blue Book as well as one can download this Pitchbook Report.) To understand these problems, consider Professor Michael Porter’s work on competitive strategy. He states that for an investment to be justified, you need a big enough market — and the portion of that market you can access is where you make your profits. So, for instance, if you produce ag technology only suitable for a small area of production, it is unlikely that you will gain a profitable return.

Remember how in 2003 the data showed 1,630 acres of greenhouse tomato production in the U.S.?. In 2022, only about 1,250 acres of tomatoes were produced in greenhouses. In 2003, four large greenhouse operators controlled 67% of the production acres. In 2022, eight large greenhouse operators controlled 80% of the production acres. 

There is significant dependence on a few clients who control most of the acreage for ag-tech companies focused on the U.S. market. This means new ag-tech companies must be accepted by nearly all the commercial greenhouses to be viable.  

If the technology targets leafy greens and culinary herbs, then it is important to realize that the 2023 industry is even smaller (just under 400 acres). In addition, the leafy greens industry is further challenged by the fact that most players use different production methods, making it harder to find similarities among farms.

All of this means that true ag-tech companies must be ready and willing to explore new geographies that have similar existing markets, target new crops, or focus on more general technology. The easiest are Mexico and Canada in terms of travel. The hardest is Europe. But do not expect them to accept new ideas quickly, as there are just as many local companies competing for business.  

The same competitive strategy applies to greenhouse operators and producers as well.  The market is highly competitive and as the data shows, much of that competition is coming from Mexico, Canada or the open field.  Greenhouse businesses must be solving a clearly identifiable problem while providing a value proposition (ie product) that is clearly “better, faster or cheaper” than the product that is already existing on the market.

Successful companies need capital, time, people and patience. Dutch companies invest heavily to access U.S. markets. Same goes for horticulture companies from Mexico, Canada, Israel, Spain, China, Sri Lanka and any other areas that can produce horticulture technology, supply, consumables and (yes) fresh produce.

We Must Know to Grow

While some might read this article and see it all as doom and gloom, we do not. As stated earlier,  we see it as important information to know and understand, so we can accept a reset. Our industry still has tremendous upside.  

For the industry to reach its potential, we must understand the following before we can grow:

1) With rising interest rates and increased company failures being announced, investment dollars are harder to come by. We must keep those dollars working and staying in the U.S. (or in your local economy or at least with companies investing in your local industry or economy.)

• If we believe in local, we need to encourage growth within the U.S. (You could make the same argument for any other country and companies looking to build their industry.)
• We know that many of the dollars invested were sent overseas because in excess of 250 acres of greenhouses were built in the U.S. by Dutch greenhouse builders from 2020-2023.
• The more dollars we keep local, the more this money can be used to develop research, education, data and technology that solves problems specific to growing in a local market.

2) We must increase the number of American-led companies “growing” or operating successful commercial horticulture businesses. The current lack of grower or production leadership shows that we do not have the expertise to run these facilities. Keeping dollars in the U.S. should promote the opportunities and education needed to get interested people into the right positions. If we do not do this, then we must change our current political position on immigration and start making it easier to bring in talent from other countries.

• We also need to be honest on our access to labor. It is among the largest costs for any company. Regardless of opinions on tech, we need access to labor in a way that keeps us competitive.

3) Currently, the cost of running U.S. CEA businesses is high because:

• Scalability has not been demonstrated for vertical farms.
• Growers are regional segregated from one another. So supporting businesses have a hard time servicing them as cost-effectively as condensed markets such as the Netherlands or Leamington, Canada.
• Labor costs are high. Local people do not want the jobs and struggle performing the work as effectively as individuals from countries such as Mexico working on visa programs. Unfortunately, visa programs are difficult to navigate, costly and politically unpopular.
• Distribution costs are high and often opaque to the grower depending on the size, scale and distribution or customer relationships the farm has built.

Once we overcome these obstacles, we can and will have a thriving industry. After all, we will still have the same problems we faced when people became excited about our industry. 

Traditional farms will continue to be impacted by changing climate patterns and extreme weather events. Fresh produce with little to no pesticides will continue to be sought after by consumers. And we will still need to protect our fresh water sources from nitrogen runoff and agriculture (as well as industrial) contamination. 

More about the authors:

Chris Higgins is the chief editor at Urban Ag News as well as the President of Hort Americas.  He has been active in the commercial horticulture industry since 1996 and has been focused on controlled environment agriculture since January 2004.

Nathan Farner is the General Manager at Hort Americas. Nathan built his career on helping companies with merger integrations, information technology implementations, business process optimization, and data governance.

All information in this article is property of Urban Ag News, Chris Higgins and Nathan Farner.  Any reproduction of this information can only be done with written permission.

Notes:  If there is a significant amount of interest in further facts and figures not covered in this article (like more information on legal cannabis market or production area of vertical farms) we will be happy to prepare follow up articles.  Please comment on what you want to learn below.

More importantly, will consumers pay a higher price for controlled-environment-grown produce?

Over the last five years, leafy greens have been the “it” crop for indoor farm production. Most indoor farms have started with leafy greens, primarily lettuce, and have looked to expand their product offerings to include herbs, microgreens, strawberries and tomatoes.

The OptimIA project, which is funded by USDA, is studying the aerial production environment and economics for growing indoor leafy greens in vertical farms. While much of the research of this four-year project has focused on managing the environment for vertical farm production, the economics related to this production is a major objective of OptimIA researchers. Based on feedback from commercial vertical farm growers, one of the primary areas of research is to develop economic information, including costs, potential profits, and to conduct an economic analysis to determine the strategies to improve profitability based on that information.

OptimIA researchers at Michigan State University who are focused on the economic aspects of vertical farm production include: Simone Valle de Souza, an ag economics professor; Chris Peterson, an emeritus professor in the Department of Agricultural, Food, and Resource Economics; and PhD student Joseph Seong, who is developing his thesis on the economics of indoor agriculture.

“I was invited by the other OptimIA researchers to use mathematical models that take into consideration the biology and technical parameters to determine the potential revenues and costs,” Valle de Souza said. “My team of economists is looking to identify the economic tradeoffs from the implementation of multiple environmental factors that the other OptimIA researchers were optimizing or planned to optimize as part of the project. Our job is to identify the optimal parameters for profitability in controlled environment production. As part of the OptimIA project, we tackled two aspects of economic analysis: production and resource-use efficiency and consumer preferences.”

Maximizing profits

As part of the economic analysis, Valle de Souza considered the variable costs of labor, electricity, seed, substrates and packaging materials. Based on the information collected from commercial indoor farm growers, labor was the largest cost at 41 percent of total variable operating costs, followed by electricity at 29 percent, seed and substrates at 22 percent and packaging materials at 7 percent.

“We did a sensitivity analysis to determine what would happen to profits if wages increased,” Valle de Souza said. “We conducted a series of simulations and determined on average a 1 percent increase in wages would reduce profit per square meter for a day of production by 6 cents. A 1 percent increase in the price of electricity would reduce profits by 5 cents per square meter per day. The contribution margin to profit is normalized on a per square meter per day of production so that we can make comparisons.”

While many growers might look to lower variable costs to increase profitability, Valle de Souza found that increasing the price of lettuce could be the better way to go.

“A 1 percent increase in the price of a head lettuce could increase profits by 60 cents per square meter per day,” she said. “Our analysis showed a revenue maximizing strategy is superior to a cost minimizing strategy. Reducing variable costs could result in savings of 5-6 cents in profit. However, during simulation scenarios that we tried, a revenue maximizing strategy could proportionately increase profits 10 times more by as much as 60 cents.”

OptimIA economists determined a 1 percent increase in the price of a head of lettuce could increase profits by 60 cents per square meter per day. A 1 percent increase in wages would reduce profit by 6 cents per square meter a day. A 1 percent increase in the price of electricity would reduce profits by 5 cents per square meter per day. Graph courtesy of Simone Valle de Souza, Mich. St. Univ.

Optimal length of production

Another part of the analysis done by the OptimIA economic researchers was to estimate the optimum length of the lettuce production cycle.

“In terms of production cycle length, we compared the trade-off between costs from one extra production day and revenues from yield that could be achieved from one extra day of growth,” Valle de Souza said. “We tried to estimate how long growers could allow lettuce plants to grow to take advantage of the fast growth rate the plants experience at the end of a production cycle. Using estimates of plant growth and plant density under an optimized space usage defined by our OptimIA colleagues at the University of Arizona, we found that under specific environmental conditions, day 19 after transplant, or 33 days from seeding, was the ideal harvesting day.”

Even though maximum revenue could be achieved earlier, at day 15 after transplant, costs per day of growth were higher for shorter production cycles. The contribution margin to profit, which was estimated as the difference between revenue and costs in this partial budget analysis, was larger at 19 days after transplant. After 33 days, profit starts to decline because the speed of plant growth rate is not as fast as the increase in costs associated with growing.

“We have determined the economic results from space optimization, estimated optimal production cycle length under given conditions, and the economic results from alternate scenarios of light intensity, carbon dioxide concentration and temperature,” Valle de Souza said. “In collaboration with our OptimIA colleagues, we are now working on a final optimization model that will associate optimal profitability with resource-use efficiency.”

Opportunity to educate consumers

Another aspect of the OptimIA economics research looked at consumer behavior and preferences in regards to indoor farms and the crops they produce. Using a national survey, the researchers determined whether consumers are willing to buy lettuce produced in indoor farms and how much they would be willing to pay for the enhanced attributes of produce grown in indoor farms.

“The survey showed no consumers rejected the innovative technology being used by indoor farms,” Valle de Souza said. “There was a group of consumers who were very supportive of the technology and completely understood what an indoor farm is. Another group of consumers were engaged, but not very convinced of the technology. Another group was skeptical of the claims of indoor-farm-produced leafy greens and were less willing to consume them. This same group said they had no knowledge about indoor farms and how they work.

“There were no consumers who had knowledge about indoor farms and rejected the leafy greens grown in these operations. Some consumers are still cautious given their little understanding about how the production systems work.”

Based on the survey results, Valle de Souza said the indoor farm industry has an opportunity to educate consumers about its production technology.

“The indoor farm industry could promote information materials that explain the benefits of a fully controlled growth environment,” she said. “Growers could explain how this technology eliminates the use of pesticides, how it can improve crop quality attributes, along with the environmental benefits of significantly lower water consumption, reduced land use, and the ability to deliver fresh produce to consumers in urban areas.”

Consumer willingness to pay more

Consumers surveyed by OptimIA researchers indicated they were willing to pay a premium for lettuce with enhanced attributes.

“We tested for taste, freshness, nutrient levels and food safety,” Valle de Souza said. “Consumers were willing to pay a premium for these attributes, especially in urban areas.

“Rural dwellers usually have their own backyards in which they can grow vegetables. They are used to seeing vegetables growing in the soil using sunlight. Rural residents were not as convinced about the need for indoor farms to produce leafy greens. Another interesting survey result was that consumers, in general, are not very decided if they prefer produce grown in indoor farms, greenhouses or outdoors.”

For more: Simone Valle de Souza, Michigan State University, Department of Agricultural, Food, and Resource Economics; valledes@msu.edu; http://www.canr.msu.edu/people/simone_valle_de_souza.

OptimIA Ag Science Café #40: Consumer Varieties for Indoor Farm Produced Leafy Greens, https://www.scri-optimia.org/showcafe.php?ID=111156.

This article is property of Urban Ag News and was written by David Kuack, a freelance technical writer in Fort Worth, Texas.