Watch next: in vertical farming REALLY sustainable? 👉th-cam.com/video/JYIetQjRRfQ/w-d-xo.html Correction to the video: at 2:10 I said that some startups did not have enough cashflow and burn rate to sustain their businesses. I misspoke and was supposed to say that some startups did not have enough cashflow and *runway*. Thanks to @dimvoly for noticing the mistake 👍.
Let me save you nearly 9 minutes: Vertical farming companies had a lot of investment because of the sustainability hype. They went on to do badly or failed because their running costs, especially energy and wages, were too high. Wages were high compared to conventional farming because more educated employees worked at vertical farms. The economic downturn led many investors to sell. There. Enjoy the rest of your 9 minutes.
@@yuchoob And I appreciate your effort, but honestly the video has a lot more context and valuable information than the (correct) conclusion you extracted, so a summary leaves out a lot of important facts.
I built my own vertical farm as personal project with some friends and what I will say is these people went way to hard on the automation front too fast. There are 4 of us and we work a 250x(1m x 2.25m) tray farm part time, only needing 1 person at the farm for about an hour and a half per day to keep things running smoothly automated water control for ph and nutrients main water tank is a gravity feed so we only use 6 pumps. 1x large pump 5x smaller pumps all runs on solar we got chillies, blue berries, lettuce, goose berries and strawberries and our biggest sales are from our berries Ran at a loss for about 10 months but now we are each able to pull about $150 month from it after running costs but got about a year till the project is paid it self off
Oh that sounds super cool! You've chosen incredible products to grow and i would actually love to learn more about your experience with blueberries and goose berries! Is there any way that we could connect e.g. on Linkedin?
@@fltfathin it might be news to you but most plants give fruits once per year, and it takes a lot of time from first plant to first harvest. That's the main reason vertical farms always go for lettuce because it grows fast, in good conditions it's 6 to 8 weeks, and it's possible to have continuous harvest by planting new batch every week.
Haha that's a fair point 😅. I was trying to referr to individual farmers and agricultural workers who have a history of running agricultural businesses buy i see what you mean.
@@turningpoint4238 And I have just the idea for the next innovation! Horizontal vertical farms! Like vertical farms, but we flatten them out and spread them across a wide area of outdoor land so we can use the sun's energy instead of paying for electricity! Horizontal = Vertical 2.0 !
To make it worse, vertical farms mostly produce leafy products that are eaten entirely and are rather cheap. They can't really produce higher value products (cashew nuts, almonds, etc) as they would demand too much time, water and energy. So to sum up, they have high operating costs and can only produce / sell cheap stuff. A real unicorn huh?
That's a great point as well! While the technology is proven and does bring benefits, the issue is that it's currently only applicable to low cost products - which makes the general unit economics unsustainable. But as I mentioned in the video, I believe this is just the beginning of an adjustment which will lead to a betterarket where the technology will serve both financially and socially better purposes.
@@ArcticFarming In this world there is not enough reference to "unit economics" when it comes to analyzing business performance, which is a huge mistake. Good thing that you clearly understand the concept and apply it widely.
You are wrong, the opposite is true. Leafy greens are actually very expensive when you look at the price per ton and their actual nutrient content. For vertical farms to work they would need to produce staples like rice or wheat (things that are actually very cheap). You would need almost free and limitless energy to pull that off in a vertical farm.
I was dealing with a group of people who were looking very seriously at this after they had hit problems in maintaining profitability in an Organic Farming project. They came up with and cited many problems with their Organic Farm all involving costs. I kept pointing out that their “problem” was their crop choice. Green leafy stuff is easy, abundant and productive but, while it is salable, the ROI return is correspondingly small and the labor is actually quite intensive. They should have focused on producing high value/dollar produce (such as berries) out of “season” or out of “region” or perhaps had an area for high end fungi They just would not listen … always responding with “… but arugula, spinach, “special” lettuces …” If its “easy” anyone can do it. If anyone can do it then the market is easily oversaturated.
Good points, i always stay away from anything that is saturated since competitions is high hence lower profits and demands. You and I should talk and go into businesses together
@@SodiumSyndicate::: Mmm, that’d be awesome! This whole vertical growing concept will have to become vertically value added, as well. Using saffron as the example, how many spin off products could be integrated into the business model, so that more of the investment is diversified?
By the sound of it, these companies don't quite understand that agriculture, vertical or traditional, are PRODUCT based and not SERVICE based. Not only that, but agriculture is something that Humanity has been doing for literal thousands of years. Do they really think they can outdo a family in Kansas that's been successfully farming the same land for over three generations? It's agriculture, not rocket science.
yes yes they do that can be said for a lot of "smart rich" people. they think they can design something better. But that is almost always never the case. mostly because there not smart at all they just think they are.
Well, the guy in the video even shows his biases, saying traditional farming is basically for the stupid poor people, and vertical farming is smart wealthy people. Even though almost every major commercial farm in America is using equipment that costs upwards of $500k.
@@razor191919 $1000k per piece nowadays, plus land costs, plus storage, plus inputs, plus marketing, plus operating costs.. Farmers are some of the most educated and capable folks out there. Chemist, plant biologist, mechanic, marketer, etc..
Unfortunately, it's been discovered that in many parts of the world where agriculture has been practiced for centuries, the fertility of the soil and soil depth is at its last gasp. Some parts of the world, namely Europe, but also some others, have about 30 harvests left in their soil - and the fact that increasing incidents of flooding and heavy rains are flushing away thousands, even millions of tons of valuable agricultural soil isn't making matters any better. On top of that, when droughts hit regions and turn soils into dust, the soil surface is easily blown away into the air, lost in drainage ditches, blown onto other land such as roads and into nearby cities, etc. Microfauna in drought-ridden areas are at severe risk too, and while some are detrimental to plants, a greater number are very beneficial. Their loss all affects future crops.
Its the same issue with Aquaponics, on a small scale a small system can easyly produce enough to feed 5-10 families with very little effort after setup. But when you try to move to comercial scale it very quickly strugles to maintain profitability.
Agreed. That's because they don't scale properly. They did centralization instead of replication. Biological systems are better scaled via replication and not via "bigger is better".
I think these will be a good thing for the planet and people. But we dont have the massive amount energy(light, pump water, temperature, infraestructure...)to make these economicly posible. When land gets more expensive than energy vertical farming will be viable. I think these is a nice idea that could help reduce cultive space something that is eating all (forest, water, humus soil, space, ecositems ) way worst that CO2 in my opinión.
@AdrianRodriguez-yq4up I don't think you uderstand farming. Even with 7 bln ppl on the planet, there is still plenty of room for crops without the need to deforest. Heck, aside from staples, most people could grow their own food in a tiny apartment if they wanted to.
@@sblijheid i think you never looked Google maps or take a plane to see the amount of space that It needs. also crops dont grow on the desert. U need some kind of soil and water u cant put crops in whatever place. Might be better making the desert a jungle than a building that is something. But crops need Big space my country is like 60% crops.... If that is not much for u ok
The biggest problem with vertical farming is that any technology that allows for profitable vertical farming also allows for even more profitable horizontal enclosed (AKA Green House) farming. And you can build a green house from much cheaper material where the land is vastly cheaper.
AND.... is the food really that high quality? Does it have all the iron, minerals, etc when farmed vertically? AND... nature needs to be in touch with nature. If it isn't part of the natural cycle it will end up damaging everything.
@@KootFlorisThat's a great point, but tbh, not sure we will have great options in the long future as weather patterns continue to become more and more unpredictable.
@@KootFlorisyea these is massive in weed industry the indoor cultives are often better because all is control. These works because weed is expensive and will give you money to pay the lights/setup/electricity. But like the original coment said Sun is way cheaper. When espace gets expensive and energy becames cheap It might jump to other cultives. But no way some one can make money producing tomatos these way. Most vertical farming is microgreen wich has lots of energy in the seed. So only a bit of light is needed. But full Sun is other thing, is like x80 House bulbs at 100 cms of the soil. A normal light bulb is 1700lux at 1m, full Sun si 150.000 lux everywere
In india vertical farms are not limiting themselves to leafy plants. Some are growing tumeric etc vertically. And they are also doing direct selling. Hence are very profitable.
Oh thats fascinating. Im wondering how they grow tall crops like tumeric efficiently. Do they perhaps have a shorter variation that can be fit into a smaller space..?
What I don't understand is why they don't realize they can grow fodder for animals VERY cheaply. This is one way vertical farming can be profitable. There are sheep, goat and cow ranchers experimenting with this using both shallow growth and microgreens and doing very well.
It seems like the problem was spending all of their investment on automation and super high tech equipment rather than investing in alternative energy production systems to bring down their overall operating costs to be able to grow more than just leafy greens
@@chrism8180 thats where they royally fucked up, trying to get rid of the labor costs skyrocketed the labor costs because now they can't pay immigrants 4 dollars an hour to pick produce they have to pay six figure salaries to robotics and electrical engineers
I don't think they are super mega dumb. They have a business model. It is called "pump and dumb". It is what made Elon, Zucky, Newmann, Sam Bankman Fried and all the shitcoiners rich as hell. The goal is to make a dumb company but to hype it. The dummer the better. Vertical farming is quite supid. The main selling point is vegetable that have never touch soil or see the sun... Then dumb people see the hype on Robin Hood, buy the crap and few days after it crash in flames. Then you rince and repeat with another dumb idea.
I did vertical farming in 2018. Raised money for the business and did a lot of experimenting. I even toured aero farms back when they were still a tiny company in a small building. Anyways I stopped because of two things. 1. Unless we could grow corn or soybeans at a competitive price I didn’t feel like there was a good future for the business. Charging a premium for a boutique item didn’t seem like it was going to solve the problems that come with traditional farming. 2. The business model after awhile looked like it was going to turn into that where you’re a large scale energy producer and that was going to be half the business. Investing lots of capital into energy production so you can amortize and control your energy costs. The robotics and computer side were in the whole the easier part to figure out. After all farming and farming tools and machinery has been around for a long time. Vertical farming is all about taking the cheapest electricity and turning it into plant mater. At any sort of meaningful scale energy consumption will be the biggest cost and finding ways to control and bring that cost down is what will separate winners from losers. Half a cent a kWh can make or break you.
2022년 빛 없이 밀과 쌀, 엽채류 등을 키워 우주식량으로 개발하는 프로젝트가 성공하였었습니다. 미래에는 전등을 사용하지 않는 수직농업이 활성화 될 것이라 예상합니다. 또한 수평공간에도 더 촘촘히 심을 수 있어 곡물류에는 더 효과적일 것입니다. 나아가 더 미래에는 뿌리와 잎 등을 퇴화시켜 곡물생산에 더 집중된 맞춤형 종자도 나타날 것이구요. 제 의견이 정답일겁니다.
I think a big issue is that this could work for small custom individual systems that provide healthy leafy greens to the single family homes they are installed in but it doesn't scale up to commercial requirements that apparently need to make dollars on their pennies.
It can’t be competitive so long as (a) cost of automation is too high and (b) competitive cost of conventional produce is too low. Both may conceivably change.. Automation may become cheaper (either, paradoxically, with more advanced flexible robotics scaled up in production being able to do more conventional staff replacement, or with simplification and commoditisation of any successful simple agri-automation strategies). As for competitive cost of food.. main (theoretical) advantages of ‘vertical’ farming are volume density, control of resource, predictability of production and proximity to market.. if crops grown outdoors (or in a an insufficiently protected / controlled environment) get systematically trashed by adverse climate conditions then having a more controlled environment for short supply chain provision of crop production may become more attractive… (although by that point scaling production volume to meet need and breadth of crop type demand would become a serious issue).. and, of course by that point people may be juggling dealing with many other problems..
@@drmartinbartos Absolutely, the margins just aren't there for large scale production at least by current standards. I was thinking more along the lines of incorporating into new housing builds, southern wall (part of or all) and you remove the automation part as the family residing there farms their own preferred crop as part of their daily routine. Like this place but replicated in a package that can meet building codes and retail sensibilities. th-cam.com/video/j335BTu_vFU/w-d-xo.html
@@drmartinbartos Hope you don't want to change (2) because this turns you into a mass murderer. So many people can barely afford food today. And i can't see (1) ever happening, not in a capitalist society where you have to add at least two more industries to the (pun intended) food chain. The building architecture with all the cement and the equipment industrie (already huge portion goes to John Deer).
Okay, hear me out bro. Groundfloor = Restaurant, Second, third and fourth floors = farm. The best way to get the highest mark up on food is to serve it in a restaurant. Excess food waste can be composted and grey water from dish washing can be used to water crops.
Every vertical farm that I see start up is always producing herbs and lettuce. They never show/design models for producing/scaling any higher level vegetable like strawberries, green peppers, soybeans, etc.... I wish we could sustain ourselves on oregano and lettuce, but we can't and vertical farms need more profitable products to show the model is sustainable.
Fully agreed. Its no wonder why VF companies that focus on more expensive produce (like Oishii) are doing well while most of those focusing on basic herbs are struggling.
Vertical farming leaf vegetable has to compete with traditional farming in Arizona where land is super cheap and winter growing conditions are amazing (cool with strong sunlight)
Because they are annual crops where you can harvest just 1 or 2 weeks and wait 10 months for the harvest. You need seasonal workers or need a mega farm with dozens of grow rooms. Soybean cost nothing.
The objective of this game is not to look like the most advanced player in the game. The main objectives in any type of farming are increasing yield per plant, decreasing material costs per plant, and maximizing the use of the sq feet you bought. First, it was horizontal farming: how do you fit the most plants in 1 acre? Now it's: how do you fit the most plants in that acre and how high can you do it without burdening the workers (staircases, multiple floors, etc)? Why did these people think robotics was the way? Probably because they never grew up in land where farming occurs and were never exposed to that lifestyle. They don't pay attention to what people really look for in food and have never been around old people, listening to how much they value good quality food because most of them DID grow up as farmers.
Because investors are idiots that jump on the latest trends without thinking about practicality. Robotics are the future in their eyes, and they probably already have money invested in robotics. So in their mind incorporating robotics into vertical farming will fuel profits in both areas while cutting labor cost.
@@chrism8180 probably so with conveyor belts to move as much as possible with less effort and work, sensors to detect atmospheric changes along with pest control/detection, sickness detection, nutrient deficiencies, toxicity levels in soil/substrate used, transplantation arms, harvesting arms, and so and so. It just takes too much tech to run these facilities through robotics alone and we are not close to those levels yet. Great idea, awful timing.
at my previous work, a bunch of AI, automation software engineers, computer vision expert, knowing nothing about economy and farming, wanted to explore vertical farming. They were serious and the top-brass were also excited about it. Someone, whose family relatives are farmer, sat down to do 0th order estimation in order to determine whether the benefit would outweigh the cost. Turned out, event though the premise sounds promising and it’s further romanticized by “driven by AI and automation yada yada”, the whole model would never work. Simply, you will need a large amount of land to make farming sustainable and economically viable. At this point, it is “ok, let’s just do conventional farming”.
Agriculture in the traditional method is the riskiest business and it just got worse with climate change. I have a friend in Japan, just him and his wife, who have a series of greenhouses (structurally reinforced) and they grow tomatoes. The tomatoes grow on shelves and with the use of some tech (climate control, soil samples, crop production and pricing) they make a fairly good profit. But like many farmers they need to expand so that they're not working 7 days / week, 365 days / year. I grew up on a dairy farm. Vacation wasn't really a word for us).
@@kuantumdot Well, don't keep us in anticipation; what other solutions are there? And my point was that high tech vertical farming is a waste of money, but lo-tech vertical farming is profitable. Look up what the Netherlands has been doing. The guy who made this video focused only on the high tech companies. The Dutch have been doing vertical farming for decades with only minor problems.
@rabbit251 He did sort of touch on it, but he blamed it on hype, particularly from VCs, who wanted to see fancy tech at play. Well, he didn't really blame the VCs as much as he should have, but hype and VCs are pretty synonymous in hindsight. I did get the feeling that there was just so much unnecessary technology being thrown at this, but the VCs never would've invested unless it was there. Low tech vertical farming just wouldn't 10x or even 2x their investment, and they're not there for that. Plus, the fact that it already exists, and it's not everywhere suggests that it won't grow like they want it to. Ironically, safe investments are just way too risky for VCs, because they take on so much risk that they can only afford investments with ridiculously huge potential just to break even.
There are many other solutions to the problem. The best would be more sustainable methods of food production. If you would for example grow more crops on your farm and not separate them, you would have a much smaller pest problem. If you do it right and plant something that is susceptible to one specific pest to the plant that pest is not a fan of, you will have a better yield than you would if you used a pesticide. Monocultures are way less productive way of farming because of pest problem. If you have a huge field of just tomatoes for example, you will need to use a lot of pesticides because your field will be a "promised land" to some species that likes to eat tomato leaves. Use of pesticides just means that the ones that have a genetic variant that is making them survive eating your crop will survive and reproduce. After some time you will need to use more pesticides and the stronger ones. That costs money. That is to eventually happen no matter which crop you will decide to grow. That is why the polyculture means larger yield. The problem is that the people who were to buy from you and then send it to the stores are not fans of this behaviour. They prefer getting a large amount of tomatoes from you over getting a smaller amount of 8 different crops.
You hit it on the nail with selling salad and other leafy greens. The way to get vertical farming worthwhile is to use dwarf trees on tilting soil-pad, to easily remove the fruits from the trees, and sell them for a juicy price. Especially useful for selling expensive products. For example, GMO vanilla, very sweet strawberries even in the middle of the winter, and other expensive delicacies. The advantage is that the fruit can be ripe, because it doesn't need to survive weeks or months of transport without turning into mush and/or rotting. This means that, if they manage to sell them for the same price or slightly more than produce brought in from somewhere else, by being tastier and not much more expensive, they will be able to brow their market rate. I mean, when was the last time you tasted an actually-tasty tomato? Bring a few heilroom varieties from Europe (especially Eastern Europe), Mexico, South America, and East Asia, and you will be able to sell much tastier produce, which will make you more desirable.
Well As someone in south eastern europe Tasty tomatoes are kinda all the time Most people i see complaing vegetables have no taste or taste like styrofoam are americans But i always viewed that as their conscious decision to sacrifice their actual food and health for the sake of profit and to please their god the "Capitalism" And they even seem against chaning that as well Money is king in the us
The big problem still remains, greenhouses can do all of that at a fraction of the cost of artificial lighting. The sun is free... The cost of land is not that big competed to energy cost to make it profitable to stack crops on top of each other and have lower or similar cost to a greenhouse where you have the same environment control and can grow crops in the winter but you don't need to artificialy light your plants.
The Fed acted recklessly, after giving nearly 0% rate finance, suddenly increasing rates more than 17 fold. Not many businesses can cope with that sort of change, except mainly well established businesses, with already large amount of capital and cashflow. Startups on the other hand, will fail. Farming takes time to grow and mature, and vertical farming needs this sort of scale to be viable, however, with sudden interest rates hike have made it unviable, even at scale. Slow growth maybe possible, but as I said, it needs to scale to a viable level before its sustainable, and that requires borrowing. The purpose of the Fed is to smooth out the economy, and infact its doing the opposite as they are using data which is lagging. Similar to trying to drive a car while looking through the rear view window of a car.
Couldn't agree more with the scaling issue. Vertical "growing" works great for the hobbyist subsistence farmer not a full blown production company. If I want to plant pumpkins next year on a plot of land vs corn in the past, no problem. Not so with vertical.
Based on some of the other comments here, it sounds like this idea is gonna crash even further into the ground if they don't find higher value crops to produce. Plus, it really seems like the VCs kind of worsened the business because they made vertical farming something far more technologically intensive than it needed to be. Still, time will tell, but as with every business, the real successes are the ones that happen in the worst economic conditions. Everyone else was just conducting bad business with free money.
I think you have great points here. A lot of VCs and institutional investors were investing into the first-movers with expectations of incredible returns while putting a huge emphasis on the IP. The issue is, even if your particular VF startup is the first to develop a certain technological solution, there is no guarantee that the IP can be protected. Again, there is nothing weird going on at the market when comparing to other new industries - there was a ton of hype and a lot of people jumped on board. Now that hype bubble has burst, a lot of people lost money and those still standing will have to take a hard look in the mirror, making sure that they dont repeat the same mistakes.
problem with unicorns is their management focus alot on hype and investment cash pump to sustain their business. Instead from day 1, they should be planning their business on cost efficiency and to push for profit and loss balance so that their business can become sustainable.
Good video! A few thoughts for potential vertical farmers: 1) Beware the adoption curve. New things or ways of doing things follow fairly consistent adoption curves. If you don't know what I'm talking about, you are going to waste a lot of time, money & hopes/dreams getting to widespread adoption. See business books like "The Innovator's Dilemma." 2) Recognize the huge differences between Research, Development & Manufacturing Scaling. This will affect your thinking on capital intensiveness, what the employee mix will be (and associated costs), accuracy of predictions (R is terrible for predictability, MS can be pretty good, and D is usually in the middle). And as your innovation matures, these "settings" will change so your capital intensiveness, management structure, timescales, etc will have to adjust to meet these changing needs. 3) Truly understand the existing market before thinking you can disrupt anything other than your bank account. Mistakes are awesomely expensive if it's even possible to overcome fundamental errors. Food is a classic commodity with lots of substitutions, deeply entrenched supply chains, and frequent boom/bust cycles. The best sometimes get destroyed so your new thing better be good and lucky too. 4) All of these mean that different kinds/scales of businesses have wildly different costs, timeframes, predictability, profitability, etc. Do you know what to expect & have good justification for it?
Great analysis! Whenever I've sat down with friends and gone over their gung-ho business idea with this level of seriousness and detail, they always seem to end up saying, "You're so NEGATIVE!" then ignoring me. If they do proceed they usually fail spectacularly then blame externalities including "negative people."
Can you do a video about photovoltaic glass in greenhouses? It seems kind of exciting to me. It converts the infrared part of the spectrum into electricity, but lets visible light through. So the plants are still getting the wavelengths of light that are actually useful to them, but the roof of the greenhouse is now generating electricity.
Semi-neat idea but I bet the power produced is weak compared to a bank of regular solar cells off to the side somewhere. Only so many milliwatts per square meter in sunlight to extract energy from.
@@ARoyalLyon Honestly, the current state of what you can buy for PV glass isn’t particularly impressive. One of the more compelling options is ClearVue, which lets 70% of visible light through, and provides 30 peak watts per square meter. You could get the same transparency by covering 30% of the surface of the glass in traditional, opaque solar panels, and you’d probably get around 60 Wp/m2. But there’s been some stuff in the lab that’s 80% transparent to visible light and provides 130 Wp/m2 under simulated sunlight. As we all know, plants only use red and blue light for photosynthesis. PV glass used in greenhouses could then absorb green light for conversion to electricity without depriving plants of anything useful to them. Sadly, I can’t find any PV glass designed to absorb green light. Quite the opposite, research seems to be focused on making color-neutral PV glass. Good for human dwellings, but suboptimal for agriculture. LUMO makes panels with a luminescent dye that absorbs green light and re-emits it as red light. So, I guess that’s another way to prevent the green light from going to waste. They put the stuff in PV glass that they claim makes 50 Wp/m2. Not sure what the effective transparency is, when you consider that some of the wavelengths are converted. Accounting for the differing usefulness of different wavelengths would make it hard to compare to other PV glass.
@@billberg1264 Thanks for all the interesting info. I studied a bit about plant wavelength utilization when experimenting with indoor farming which proved more trouble than it was worth for me.
I feel like this was imminent. The applications where not the ones that where competitive enough against other methods that don't require high tech equipment and especially the mountain of energy. I would like to see people apply their knowledge in vertical farming in areas where water efficiency is more important. To be fair a lot of farms are still testing the capabilities, but the focus these companies, or maybe the invesors, had in mind where just unsustainable.
@@ArcticFarming How did you manage to miss it? It was caused mainly by Obama-era green incentives. Leading to a lot of greenwashing and businesses that were never even viable on paper. It's a common theme from algae to plant-based meat substitutes to vertical farming.
Hey and thanks for the great point! Would love for you to elaborate a bit more on your point. I can see the use of desalinisation in certain VF applications but would love to learn more about your thoughts.
@@ArcticFarming I haven’t studied VF much but I have thought a lot about how it could change the world by removing the need for transportation and by decoupling supply from seasonality/locality. However freshwater is in short supply in the areas that would benefit the most from it, like North Africa or other desert regions. Food security goes hand in hand with the stability needed for economic development and water supply is a big part of the limitation on food supply for nations like Egypt or Libya. Decoupling these areas from limitations imposed by water supply is one challenge. Then VF can help decouple them and others form limitations imposed by climate.
Your problem is not water, it's electricity. You don't need an advance in desalination, you need a fusion reaction. The most expensive input in agriculture is solar energy.
@@DavidConnerCodeaholic Too expensive. Calculate how many watthours of sunlight a ha of wheat receives during its growth period. Now convert that to artificial lighting. You will see it is not even close. You would need damn near free energy for vertical farming to make sense for staple crops.
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Another consideration is that these companies spent a lot, perhaps a majority, of their resources figuring out how to automate and scale their systems rather than actually doing the farming. Y'know who already knows how to scale a farm: Koch, Tyson, and ConAgra. For round 2 of this tech, expect the legacy companies to make it successful. Expect to see John Deere, Case, and New Holland mass producing the equipment.
I never got the vert farming thing. The one huge advantage they have over regular farming is that they utilize way less land. But land is not a scarce resource. Their biggest advantage is solving a problem that doesn't exist. Also, you still need the same amount of light per plant and a fixed amount of sunlight falls on each unit of area on the earth. So for many levels, only one (or maybe two) will get the sunlight and the rest will need to have light generated. Here's an idea: take all those levels and spread them out to make a single level. Do it, say, in a field. Additional cost savings arise by using the dirt that is already there instead of mixing up a bunch of fancy potting soil. No need to train the workforce as there is already a bunch of workers who have been doing that type of work for a long time. Same for the machinery, trade in those fancy robots for a John Deere or three. Now what do you have? A farm. Genius.
Well, an additional theoretical points for vertical farming are (1) independence of a season (produce whatever and whenever you want); and (2) controlled environment, so you do not need to use pesticides and etc
Hydroponics and aeroponics use way less water, too. Then there's the matter of transportation costs getting harvests into cities. There do seem to be some major upsides to vertical farming if the power usage problem can be solved.
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Wow. I'm a bit perplexed seeing him been mentioned here also Didn't know he has been good to so many people too this is wonderful, i'm in my fifth trade with him and it has been super.
I don't want to put a figure to how much i've made doing that but let's just say it's more than enough to make trading worthwhile. And when i say worthwhile, i mean it.
The problem with our food system in the US isn't production, it's distribution. We routinely throw out almost half the food we produce. Subsidies and price supports keep commodity prices high to protect prodcucers' profits instead of allowing costs to fall to market levels.
When the cost per square foot is $235 and the produce is worth $0.03 per harvest and you can only harvest 8x more. That makes your $235 sq ft worth $0.24. It will take 979 years to break even. It will happen. Eventually. Now... if they want to make money. They should grow something with a high sale value. I suggest the poppy plant. They could recoup all expenditures in 4-6 months.
That's hilarious, but I wouldn't give them ideas. I can hear the sell, "we need locally based heroin to stop funding overseas terrorist groups, and ensure there's no fentanyl being cut"
The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies
The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again
@@roddywoods8130 Mrs Marisol Cordova really seems to know her stuff. I found her online-page, read through her resume, educational background, qualifications and it was really impressive. She is a fiduciary who will act in my best interest
Very good analysis. Two years ago, I was involved in a Vertical farming project, and I had the same suspicion after I learned the electricity cost of it, which has leave vertical farming almost zero margin already. Not to mentioned that these startups hire and pay high salaries for engineers, whose payrate is way higher than traditional farmers.
That's where my revolutionary idea for the next innovation comes in! Ready...? Horizontal vertical farms! Like vertical farms, but we flatten them out and spread them across a wide area of outdoor land so we can use the sun's energy instead of paying for electricity! Horizontal = Vertical 2.0 !
I never understood how building a building and lighting it artificially and hiring people to take care of it possibly made more economic sense than sticking a seed in the ground.
Seasons. I might try it on my own (no hiring anyone), just to have a basement garden producing lettuce and cabbage year round. But that's mainly for fun.
Water usage, pest/environmental control / reducing waste, transportation costs, plants that can put more of their growth into producing edible parts since they don't need to be hardened against a harsh environment.
We in India are building low cost greenhouses with good standards still local farmers are able to produce at low cost and Giving tough competition. Market acceptability is the key
And I imagine that if the electricity turns off for two days, these farms may be destroyed (to different extents). What if it is off for 10 days? This is just not reliable source of food that can be depended on.
We've actually spoken about this risk in another video but its definitely a risk alongside pests and diseases. Naturally, any well run indoor farm would have redundancies for this but you do have a point - what if a natural disaster hits and cuts the power for a longer period of time? Does this mean that vertical farms cannot be located in high-risk areas where floods and tornadoes are an annual threat? All good questions.
@@ArcticFarming Vertical farms are probably safer against floods. Just get a secondary generator. But say solar storm kicks out electricity for weeks. What would the people eat then if 10-20% of city's consumption were grown in farms like that...
Another major challenge is that in countries which are land + water constrained (think islands) typically are located in parts of the world where steel/building materials are hard to get. So any imported steel has stiff competition for what its used for and vertical farming very rarely would be worth it. This is why I stopped looking into a career in vertical farming the places that it would help the most are the least likely to be able to use it.
It always seemed like to me, like a lot of these 'green' technologies, they don't scale well. they're great for maybe running a small one for a family to manage and subsist on. or maybe a small community to supplement normal farming. I always just assumed these startups were smarter than me and had solved that scalability problem.. guess not so much.
A lot of those green technology come from hard sci fi concept, but here is the catch, most of the those concept were developped to answer to new limitation that we might encounter, while ignoring some of the limitation we currently have. Vertical farming was literally born when a professor and its student tried to estimate how much food could be grown on the roof of new york, when they found the answer unsatisfactory they simply explored the idea of creating farm inside a building that could feed 50 000 people. It was never supposed to be built or practical Vertical farming was basicaly developped with the assumption that acres of fertile lands are a premium and rare ressource that need to be optimized. But on Earth this isn't the case at all. That's why it doesn't work. It will probably be interesting to do vertical farming in places where fertile land is a premium and energy isn't. Like in desert or maybe space in the future.
On average, humans consume 2,250 Cal a day (2,000 for women, 2,500 for men). You can convert this to Joules (remembering that 1 Cal = 1000 cal and 1 cal = 4,184 Joules. Therefore, you need 2,250 * 1000 * 4,184 = 9,414,000 Joules per day to survive. If you divide this amount of energy by the number of seconds in a day, you get the average power in Watts that a human being consumes:
9,414,000 / (60 * 60 * 24) = 108 W = 0.108 kW Therefore, the human machine consumes as much as a 100 Watts incandescent light bulb. So far, so good, we are pretty efficient. However, the losses in converting electricity to light (90% for LED) and converting light to grain and straw (0.2% for wheat) are quite considerable. Plants will use most of the energy they consume as light to grow, sustain themselves and only a small percentage of it will be converted into something that can be further used by us as an energy source. Taking into account the average cost of electricity in the USA is 0.132 cents per kWh, to produce the necessary food (bread, for instance) to sustain a single human using electricity would be: 0.108*24*0.132/(0.9*0.002) = U$ 190.08 per day (or almost 70,000 dollars per year). Vertical farms only make sense for crops with almost zero nutritional value (in terms of energy), such as greens.
They are growing things with artificial light. That's the part that's expensive, water and nutrient use is more efficient than traditional agriculture.
Thanks a bunch for the positive feedback! I do appreciate it. The thumbnails kinda need to serve the youtube gods sooo.. 😅. We have some really cool new content coming out (starting today) and i hope you feel the same way about them as well.
Traditional horizontal farms get sunlight and much if not all of the water for their crops for free out of the sky. Vertical farms have to pay for artificial sunlamps and to pump in water. All while there is plenty of farmland or potential farmland available. I think it is going to be a very long time before vertical farming could ever be competitive with horizontal farming.
I would like to see a single traditional farm that gets even close to a majority of its irrigation water through rain. According to the World Bank, agriculture accounts for an average of 70% of all fresh water withdrawals globally. On top of this, large scale farms use huge pumps and irrigation systems (ergo energy) to move that water around and to distribute it evenly around the farmland. On your other point, one of the key issues why vertical indoor farming has potential is because we are running out of arable land. So no, we cant simply expand our outdoor farms indefinitely. Yes, traditional farms do use sunlight, but this is not always a good thing. What we need is an even and a predictable amount of light - something that can be very hard with traditional outdoor farms. I appreciate the comment and as i stated in the video, vertical farming is not perfect. Still, traditional agriculture has huge issues that "free sunlight" is simply not going to fix.
@@ArcticFarming For some reason, YT decided not to post my reply, so I am trying again. I think it is because I am trying to cite my sources, and YT does not like that. If this comment ends up showing up twice, though, I apologize. First, the vast majority of traditional farms get the majority, or, indeed, all, of their water from rain. That same World Bank you cite reports that only 20% of farmland is irrigated, and only 40% of total food production is from irrigated land. Granted, irrigated land is disproportionately productive, but it could hardly be otherwise: the costs of irrigation can only be economical where irrigation would make the land highly productive. To put it another way, that irrigated land is so disproportionately productive shows just how efficient irrigation is. Second, we are not running out or arable land. Since 1960, the amount of land under cultivation has actually shrunk in the developed world, even as agricultural output in the developed world had risen. Since 2000, the amount has been falling in much of the rest of the world as well, including China, the Middle East, Oceania, and even India now. The only places where there is any growth still occurring are Africa, Asia (excluding India, China, and Russia), and Latin America. And even in those places, the growth has not been large. Vertical farming is a non-solution to a non-problem.
@@redrackham6812 You're assuming all that land that is no longer under cultivation is still arable. It's not. The Midwest will be unfarmable in 60 years as they've done nothing but monoculture over the last 150 years and the land is running out of topsoil. We've lost another 5% of our farmland due to suburban sprawl. Every day we lose 2000 acres of mostly arable land around cities (which were built around agriculture) to build McMansions that do nothing but destroy the planet. What's more, climate change is going to destroy most of our best farmland by 2150, because our most productive farmland is located in river deltas that will be completely under salt water. I can't imagine a problem that needs solving more urgently than this.
@@VulcanLogic Except that pretty much all of that is nonsense. First of all, let's deal with the suburban sprawl argument, since that at least has some basis in reality. Yes, it is true: some of the land that is no longer being used for farming is now being used for other things, including housing. Not all of it, by the way. There are huge tracts of New England and northern New York that was all farmland fifty or sixty years ago and now it is all forest. But so what? The idea that land that was once farmland but is not anymore should be preserved as is so that it could be turned back into farmland at a moment's notice in the future is frankly absurd. Of course it is being used for other things, including housing. As for the claims that agricultural productivity in the Midwest is going to collapse because of topsoil erosion over the last 150 years, the reality is that agricultural output from the Midwest and the rest of the country has done nothing but increase since the end of the Second World War. It is now almost triple what it was then, even as inputs have been flat. Meaning that efficiency has almost tripled. Topsoil erosion was a big problem during the dustbowl of the thirties, but not since then. As for the claim that farmland is all going to be under water, please allow me to reassure you that the world has been much warmer than it is today at many times not only throughout recorded history but also in prehistoric times, and sea levels were no higher than they are now. But let us suppose that I am wrong about this and you are right, and that there is a looming ecological catastrophe coming. Vertical farming would not be the answer. It would be a huge part of the problem. As I said, it would require enormous amounts of extra energy, since you would have to replace natural sunlight with energy-intensive sunlamps, and you would have to pump enormous of water straight upwards. At least with horizontal farming, irrigation, when it is needed at all, does not have to directly fight gravity. Water is very heavy, and you are talking about pumping an enormous amount of it straight upwards. So you want to prevent an ecological catastrophe by making agricultural much more energy-intensive? That would not be part of the solution; that would be part of the problem.
@@redrackham6812 We know sea level was higher 3 million years ago because we know how geology works. It was almost 100 feet higher than today. Fun fact, the concentration of CO2 was actually lower than our current ppm (412 ppm vs 418). So yeah, we can just dismiss you as not credible by that comment alone.
As someone who has worked in sustainable agriculture I’ve been saying for years now that vertical farming isn’t the breakthrough that we want it to be because all it produces is extra pricey salad. We still can’t even reliably produce basic fruiting crops like peppers or tomatoes in a vertical context let alone the staple crops that produce most of the emissions in plant based agriculture and use the most land such as corn, soy, and wheat.
Its easy to grow tomatoes in a vertical context, simply choose a micro tom variety to maximize efficiency, especially light which is, by far, the biggest cost for indoor facilities.
Hydroponics usually won't work above a certain scale due to shipping costs unless you export. It's just too cheap to get in for a total corporate takeover.
We are farmers in an area with a lot of green houses and one of the problems in green houses is plant fungus but the direct sunlight does help mitigate somewhat but in vertical farming there is no sunlight. Would you not think that the smart guys would have not seen this problem LOL.
From my own occasional attempts to grow my own closet cannabis over the decades, I learned the dirty secret of successful indoor gardening is LOTS AND LOTS of chemical spraying. Every "organic" crop I tried failed... some to fungus at the seedling/clone rooting stage, some to pests like spider mites when crop was 90% of the way to harvest time.
Our team is actually researching a few crops like these. The issue is, they take a hell of a long time to grow so accumulation data on the validity takes a lot of time compared to growing salads 👉 this being one of the key reasons why most VF companies started with leafy greens and herbs.
I'm not sure where these startups were targetting (Europe or North America?). In the US I think it's fair to say...we aren't quite there yet, thankfully. Or regretfully...given that one of the two major market failures is the low-ish demand for leafy greens (we should eat more greens). But also, land isn't scarce enough to warrant the capital costs to go vertically. How many of these startups were doing aquaponics? Might help to offset your fertilizer inputs (fish food) with marketable protein.
In the current state, this is true. But, once energy is cheap, we can save land, water, transportation, eliminate pesticides and so much more. Including consuming CO2 in cities. Right now it's an energy problem. That problem won't always be a problem. Leafy greens are just the first test and take the least energy. Energy abundance is coming soon.
@@tripplefives1402 I have five acres and market garden intensively on 1 acre. I feed a lot of people with two farmer's markets a week and restaurant sales. Lots of leafy greens but also root veg, strawberries, tomatoes, peppers, eggplant, winter squash. We are also growing many fruit and nut trees as well as berry bushes, herbs chickens for eggs etc. Corn provides very little human nutrition, you must get tired of eating just corn.
@@tripplefives1402 Mark Shephard wrote a book 'Restoration Agriculture' where he does a comparison of the value of corn/soybean production vs his polyculture system based on permaculture scaled to feed a lot of people on a 106 acre scale, maybe consider reading that and challenging some of your beliefs. Respect to any farmer for doing what you do even if it is different!
@@tripplefives1402 Yes He is setup for machine harvest for some of his crops including nut trees and berry bushes. He also has cider apples and grows asperagus etc. He also does mixed rotational grazing of cattle, turkey sheep and chicken. Yes I'm sure there is labour but this is far more productive than corn and with perrenial plantings you don't have annual planting costs and your harvests increase each year. A multitude of crops insures against individual crop failures or shortcomings.
I am all for vertical farming but more as Victory Gardens for COMMUNITIES not businesses, in highly urbanized places. This includes building in real top soil for the bigger models creating it from Human Manure by slightly charring it, replicating how it was created in the Amazon. In smaller ones you use very small foot prints as a supplement. Also you need to add in Organic Solar Panels to stabilize and minimize energy costs.
@@ArcticFarming Of course, well earned and thanks for your response! I normally always have a topic to propose but I'm struggling. How bout how you/research see the industry evolving over the coming years and decades. What proportion of farming will vertical farms be along with lab grown meats versus traditional farming? Replace, become a sizeable fraction of, or only be a niche for the next 30-50 years? How will that affect soil regeneration/rewilding efforts, as well as consumer food prices (given sustenance has gone from like 50% of people's budgets to less than 16% over the last 100 years). Those are all topics of interest around this. But maybe these are too broad and not specific enough to this channel. I am new but definitely interested thanks to the quality of the analysis.
@@phillipphil1615 Natural gas and potash. Both exports that Russia and its allies hold a huge international market share of.. Our dependence of fertilizer and upcoming food shortages is far more worse than people understand.
That's a great point, thanks for bringing this up! While the video makes the issues seem rather simple, there are a million different issues that impact the overall market - fertilisers being a big one.
@@phillipphil1615 all forms of unnatural hydroponic food production require artificial crude based fertilisers , and produce tasteless vegetables filled with glyphosate and other carcinogens . Because of human stupidity and unreasonable demands, not practising crop rotation and converting the most fertile land into housing instead of farms . We require enormous amounts of artificial fertiliser to sustain our food supply .
Hi, vertical farmer here - this was a good breakdown. However, saying "just salad" does no justice because this "just salad" is a *$195 Billion dollar a year industry in the US alone,* $700 billion if we go worldwide. Just romaine and iceburg make up 1/5th the entire vegetable market, and if we factor markets like the medicinal herb space, it hit over $200 Billion in 2022 by itself. That's enormous, and there's been very little innovation. All these over invested, over politically hyped corporations dropped the bag. Time to pick it up.
Hey @rochestermicrogreens and thanks so much for the great comment! You are absolutely correct, the salad/lettuce category IS massive and perhaps I should have been a bit more clear in my criticism. The core issue here is that indoor vertical farms struggle competing with traditional agriculture (like greenhouses) when it comes to these 'lower cost' product categories. It would be much preferable that indoor farms would focus on more specialised and higher cost/margin products that are either a) difficult to grow or procure locally with other means, or b) that have more specialised use-cases (like cosmetics or medicine). Im sure we will definitely see a day when indoor vertical farms are able to compete in price with conventional ag, but most operations are simply not there yet. Would you agree? Appreciate the discussion 👍
So I do agree in principle, on many points; but I would challenge a few assumptions. First, why can't we compete in price? Costs are higher overall; but not by a significant factor. I know because i'm doing it! Nor does that mean we can't compete based price anyways because it's all about what value you're offering. There are many ways to compete, including but not limited to quality or variety.Indoor farms are hyper local, and completely free of all chemicals. I also grow varieties that you can't get anywhere else. This is another huge value to price point, offering exclusive strains of common greens. I don't know if you ever do podcast type interview stuff; but i'd be happy to contribute. @@ArcticFarming
Hi Olly, I haven’t seen any videos where you have mentioned nutrients. I am setting up a very small hydroponics system and I’m thinking of using liquid seaweed kelp. Would you say this is a good nutrient thank you I am in England
@Freakhealer has a good recommendation in the thread here. We are not necessarily experts in all kinds of nutrients but there are a ton of great resources online that you can use. ZipGrow has also a great academy for VF called Upstart University (we are not affiliated with them) that had a ton of great info and a wonderful staff.
@wombleok112 hey wombleok im planning to make a tower fountain over winter to do maybe chinese cabbage.. im also in the uk.. be interesting to see how yours goes aswell.. im a need some form of netting i suspect.. also with kratky method i just use compost tea and maybe some miraclegrow or whatever..
Vertical farming should be tapping free energy sources - think waste heat from a steel mill or nuclear power plant. You might not want your produce grown next to a heavy industry but if you think about about it, vertical farming is intensive industry and does not need to be located in an agricultural area.
I can throw potato cuttings into my compost bin and I get plenty of free potatos next year. Near zero investment crop. The worms do all the work creating a fertile soil.
Sometimes it baffles me how such industries can collect hundreds of millions of USD without a proper business plan. Makes me wonder how much some people look into start-ups which they are funding.
There are a ton of really interesting mixed solutions that combine vertical farming and greenhouses and I think this has a lot of promise! Really interested to see how this works out in the long term.
@@ThomasVWorm growth input advantage is reserved, growth speed might be slower due to the light force, but remember the light reflects and even under shadow plants grow, the sun is powerful enough. And the output is organic and available in all seasons. Anyways I saw this concept in Agrotonomy, I don't know about the efficiency
Many thanks for the video and I enjoyed listening to the analysis of the failure of the vertical farming project. I deal with projects as a fundraising consultant and the most important we are looking for is the feasibility study and to check will the project will be feasible to fund. What is shocking is the high cost the human resources, robots, and eventually electricity. All that to produce salad and very cheap products such as lettuce and cucumbers. All these expenses can be reduced and using less expensive robots or using a combination of advanced robots and semi-manual equipment. Hiring less expensive hr. Also investing in getting more profitable crops such as saffron and cardomoin and other expensive spices will generate higher income to the corporations involved in vertical farming. Again many thanks the video it was very informative and a very good learning experience.
Dude just saw that your channels only on farming ... your thorough research deserves that this channel has more videos on businesses succeeding and failing ....
So vertical farming can't be profitable in the current cold war climate where food is skyrocketing and transportation cost (from farm to city) is going up too...
I support this kind of farming since normal farming is running out of land... But right now it is only experimental. I would like to work in such things but don't see any nearby...
Yep, just like with any new technology, vertical farming is still in its early stages and will see many waves of development before it matures. If you are interested in working with vertical farming but you have no firms close to you, you could always start building your own small-scale system in your home 🙂.
I think there's a fourth reason for vertical farms financial issues. After the hype cooled a little, short-sellers hit any publicly listed companies hard, Appharvest is a good example, their share price has been hit so hard that their ability to raise capital has been smashed even while their revenue and unit economics grow. And there has always been a vulnerability: "Old-economy" types with a lot of money can choose to short these companies with the specific intention of destroying their ability to raise capital. during '22 many green/ESG companies were targeted by short-sellers simply because they were considered "woke." Politics has skewed market valuations, Appharvest is a good exhibit of this.
Oh that's an interesting point, didn't think about that at all. Any idea if there is a way to check the amount of shorting that has been done on the stocks? Would be fascinating to see the volumes over time.
Appharvest has $200M of debt, it is not profitable and not projected to become profitable even by the company itself within the next 2 years (which probably means 4 years) and needs about $180M to ramp up the production on the current 4 facilities. And even if it became profitable, revenue would be ~$60M and earnings would be in the single digit millions which does not justify a value of $1B which it had when it deSPACed (or even $4B at its ATH). Not to mention that all 3 of its financers are alleging them of default. It is also at risk of being delisted from Nasdaq because it does not comply with listing criteria. This stock absolutely deserves its value and it has nothing to do with being "woke" or political.
@@ArcticFarming The NASDAQ website has a "Short interest" page for stocks which includes the history for the last year, records exist for longer frames, but don't seem to be as easy to find, I'll reply again with a link (just in case YT filters outside links here) APPH has generally had 15-20% of it's shares sold-short continuously for at least the last year. (that percentage is considered high, "Typical" short interest is usually approx 2-4%)
@@GameFuMaster You're probably right, but with them trying to do indoor farming in Kentucky with a well-paid and diverse workforce. And all the B-Corp, ESG, community stakeholder stuff they feature so heavily it's easy to imagine how conservatives in/around Kentucky might see them as both a threat and a target. An obvious point of concentrated "wokeness" to make an example out of. "Go woke, go broke" The finance bros have the tools to make that happen.
Traditional farms rely more on labor and free sunlight provided by the nature to grow their crops, while vertical farming rely on the use of technology like leds and grow lights which consume electricty constantly. Not to mention the irigation system which usually use pump or spray. The importance to always check the growth parameters all the time with robot and computer on high tech vertical farm add more cost to the process. In the end, the final products are rather cheap like you said. It is like doing a lab scale experiment, but expect the result to be commercially profitable.
So to be fair, if they had integrated more renewable energy sources into their building designs, and hired people with an interest in farming, then the costs would have been considerably lower. If you pair that with growing foods that are in demand, but not bulk, for that area they could have been sustainable.
Perhaps. Its hard to say for sure because of the lack of general transparency in the industry. Most firms that ive seen cite personnel costs and energy costs as the main drivers for their financial struggles but if im being honest, i dont think its this simple. Im pretty sure that a ton of the issues are rooted in fundamental problems with how businesses are run. But again, its hard to say for sure because information is still quite scarce.
@@ArcticFarming I am not surprised that the information is hard to get. I am also positive that there are many other factors at play, not least of all would be lobbies from the big farming conglomerates that don't want to lose control of the lucrative specialties market (chilis, berries...higher value per kg products) to new players. I am in Canada and I am sure that if there was a reliable source of...blueberries all year round, that was locally produced, pesticide free...people would be willing to pay a bit more for that. That is just one product out of dozens that this industry would be perfect for.
One of the biggest challenge is enormous amount of subsidies that traditional farming receives and vertical farming generally does not. This makes it impossible to compete with price.
The BIGGEST advantage vertical farming has is vastly less water usage, vastly smaller land footprint, able to be in town/city to reduce from harvest to sale time and the ability to have 2 harvest cycles per yr, that 2 cycles and lower transit time should bring in more income.
Energy prices are a huge factor. Right now one of the cheapest ways to get it is with solar panels, but converting sunlight into electricity into light is less efficient than planting crops in a field to get sunlight directly. Even if they're hydroponic and even if you only use the "ideal" wavelengths of light. So unless you can get electricity for a whole lot cheaper or can grow close enough to markets to reduce transportation costs to account for it, it will be very difficult to compete with horizontal agriculture (or hydroponics). I like the idea, but you need an energy source that is cheaper than solar (which may be possible in some places with hydropower and geothermal, but not everywhere).
I work in ag related business and I see this with many companies. They try to revolutionize the business by introducing automation and lots of real estate but fail to realize that the costs of maintaining this equipment is extremely expensive. Common items like HIMs can cost the business $5-12k. Motors go for several thousand and the drives are from $1800-$25000. It’s a serious commitment and they fail to realize that. Many companies were handed millions in loans these past years and spent it recklessly like a person who wins the lottery. Bankruptcies are coming fast
Like many highly funded startups, vertical farm businesses seem to have got caught up in the technology rather than the product/business plan/profitability models. For me the idea of converting long unused empty warehouses in/near Newark, NJ into these farms, creating new jobs, and providing high quality greens that don't need to be brought across country from CA, seems to be a great idea. Even the selection of greens make sense as they have a 3-5 week growing cycle, thus generating a potential of at least 12 turns per year on the same investment. However, getting into AI and letting the tech portion get out of control, to me, is what you get from individuals with limited experience and focus. Hopefully, those that survive this cycle will gleam enough business knowledge to survive and prosper through the future.
It sounds like they really need to focus on lowering costs by using traditional methods while raising quality. If they can consistently provide a more ripe and nutritionally dense product while avoiding the shipping costs then they should be able to compete, but then they lose out on being “high tech” which is what drew in the investors from the getgo.
You have a great point! In fact, only now are we seeing some first great examples of companies focusing on what really matters. Vertical farming has gone through some really tough times and only those who are willing to learn from the previous mistakes, are able to survive in the long-term.
One of the most successful farming startup I think is lufa. Its based in Montréal and instead of buying new building buildings to make vertical farms, it puts farms on top of warehouse. They have been very successful and starting a grocery service to sell more of there vegetables
Maybe it was never a good idea. Maybe it was never economically viable. Maybe it’s a sector that’s super sensitive to wage and energy spikes. When you’re competing with low paid imported farm workers, and highly subsidized agricultural companies, you’re going to have a bad time.
While mixed LEDs might look nice and someone might convince you they are a spectral substitute for sunlight, on closer inspection they are still very weak compared to the sun, often even in partial shade.
Imagine going for LIGHT DEPENDENT . Vertical farming has been a thing for over half a century with champinion mushrooms . My greatunkles and now unkles have been running a "vertikal " champinion farm for at least 30 years and had surprisingly little problems. Introducing high lighting in a worse cashcrop is bound to fail.
Oh man how did I miss that 🤦♂️. I meant to say cashflow or runway.. thanks so much for spotting this - I'll see if there is a way to make a correction after the fact.
I built an aeroponic cannabis system that was horizontal but could be “stacked” using pallet racking and catwalks. Spent a crap load of time and money to figure out that it’s too complicated and expensive. Just moving the plants around was a total headache. Vertical sounds great…in theory. I’ll never ever go that route again
The problem is they went too high tech before fully developing and understanding the costs. South Korea is doing the same but their farms grow 20% every year with profit. Anyone who wants to do the farming needs to visit South Korea first to understand how they maximize profit for minimal cost.
I can immediately see 3 problems with any and all vertical farming. 1: It is not cheap to pump and plumb the pipes to move and distribute water throughout the Vertical farming shelves. There is a loss of pressure and flow rate the farther you get from the pump, and it takes a significant amount of energy to move the vast amount of water required throughout the facility which will force ingenuitive methods such as pumping the water to the top and then allowing gravity to pull it down through the piping to the plants with control valves to control how much the plants are watered. 2: Distribution of Grow Light and creating a high efficiency design to reduce lights per shelf and power draw by placement and distribution/direction of light to reach lower and lower trays. 3: Designing Optimal and longer term automation and crop rotation to reduce fertilizers and replacement of soil per each harvest, Even in these vertical farms crops MUST be rotated to avoid efficiency loss of growth from mineral depletion in the soil. It's not as simple as simply planting the same crop over and over again, As well is very difficult to automate accurately and keep tally of crops in the system. Requiring a lot of hardware to effectively do. It is annoying to see random people try to do company startups in agriculture assuming it's something simple. It's not and irritatingly annoying to watch random people try.
Watch next: in vertical farming REALLY sustainable? 👉th-cam.com/video/JYIetQjRRfQ/w-d-xo.html
Correction to the video: at 2:10 I said that some startups did not have enough cashflow and burn rate to sustain their businesses. I misspoke and was supposed to say that some startups did not have enough cashflow and *runway*. Thanks to @dimvoly for noticing the mistake 👍.
Let me save you nearly 9 minutes: Vertical farming companies had a lot of investment because of the sustainability hype. They went on to do badly or failed because their running costs, especially energy and wages, were too high. Wages were high compared to conventional farming because more educated employees worked at vertical farms. The economic downturn led many investors to sell.
There. Enjoy the rest of your 9 minutes.
Thanks boss!
Actually I prefer the video, but thanks for trying
@@ahernandez50 I didn't say you'd prefer my version. I was just trying to save you time.
Ah, figured that thanks 😊
@@yuchoob And I appreciate your effort, but honestly the video has a lot more context and valuable information than the (correct) conclusion you extracted, so a summary leaves out a lot of important facts.
I built my own vertical farm as personal project with some friends and what I will say is these people went way to hard on the automation front too fast. There are 4 of us and we work a 250x(1m x 2.25m) tray farm part time, only needing 1 person at the farm for about an hour and a half per day to keep things running smoothly
automated water control for ph and nutrients
main water tank is a gravity feed so we only use 6 pumps. 1x large pump 5x smaller pumps
all runs on solar
we got chillies, blue berries, lettuce, goose berries and strawberries and our biggest sales are from our berries
Ran at a loss for about 10 months but now we are each able to pull about $150 month from it after running costs but got about a year till the project is paid it self off
Oh that sounds super cool! You've chosen incredible products to grow and i would actually love to learn more about your experience with blueberries and goose berries! Is there any way that we could connect e.g. on Linkedin?
THIS NEEDS TO HAPPEN
curious on why the 10 mo at a loss was caused by, is it because the buyers didn't know you guys yet hence cannot sell enough or what?
What were the real estate costs?
@@fltfathin it might be news to you but most plants give fruits once per year, and it takes a lot of time from first plant to first harvest. That's the main reason vertical farms always go for lettuce because it grows fast, in good conditions it's 6 to 8 weeks, and it's possible to have continuous harvest by planting new batch every week.
"traditional agriculture has a long history" I think that is the understatement of 2023.
Haha that's a fair point 😅. I was trying to referr to individual farmers and agricultural workers who have a history of running agricultural businesses buy i see what you mean.
I mean, we've farmed for less than 5% of our species' existence
@@Joshukend Not true I saw a TH-camST (stone tablet) video on farming from 30,000 BC just the other day.
Depends what you call traditional farming, it's an industry thats rapidly evolved.
@@turningpoint4238 And I have just the idea for the next innovation! Horizontal vertical farms! Like vertical farms, but we flatten them out and spread them across a wide area of outdoor land so we can use the sun's energy instead of paying for electricity! Horizontal = Vertical 2.0 !
To make it worse, vertical farms mostly produce leafy products that are eaten entirely and are rather cheap. They can't really produce higher value products (cashew nuts, almonds, etc) as they would demand too much time, water and energy. So to sum up, they have high operating costs and can only produce / sell cheap stuff. A real unicorn huh?
That's a great point as well! While the technology is proven and does bring benefits, the issue is that it's currently only applicable to low cost products - which makes the general unit economics unsustainable. But as I mentioned in the video, I believe this is just the beginning of an adjustment which will lead to a betterarket where the technology will serve both financially and socially better purposes.
@@ArcticFarming In this world there is not enough reference to "unit economics" when it comes to analyzing business performance, which is a huge mistake. Good thing that you clearly understand the concept and apply it widely.
You are wrong, the opposite is true. Leafy greens are actually very expensive when you look at the price per ton and their actual nutrient content. For vertical farms to work they would need to produce staples like rice or wheat (things that are actually very cheap). You would need almost free and limitless energy to pull that off in a vertical farm.
@@ArcticFarming How on earth are salads low-cost products in your opinion? They are very expensive compared to staple agricultural crops.
What? Cashews? Do you even know how Cashews are farmed..??
I was dealing with a group of people who were looking very seriously at this after they had hit problems in maintaining profitability in an Organic Farming project.
They came up with and cited many problems with their Organic Farm all involving costs.
I kept pointing out that their “problem” was their crop choice.
Green leafy stuff is easy, abundant and productive but, while it is salable, the ROI return is correspondingly small and the labor is actually quite intensive.
They should have focused on producing high value/dollar produce (such as berries) out of “season” or out of “region” or perhaps had an area for high end fungi
They just would not listen … always responding with “… but arugula, spinach, “special” lettuces …”
If its “easy” anyone can do it. If anyone can do it then the market is easily oversaturated.
Good points, i always stay away from anything that is saturated since competitions is high hence lower profits and demands. You and I should talk and go into businesses together
I was thinking the same thing. There are many different products that would bring in a lot more per square foot, man hour, KWhr, or any other expense.
personally I been considering if coffee beans could be a interesting crop for it, but guess shipping is still too cheap for that
Maybe saffron is best for indoor farming.
@@SodiumSyndicate::: Mmm, that’d be awesome! This whole vertical growing concept will have to become vertically value added, as well. Using saffron as the example, how many spin off products could be integrated into the business model, so that more of the investment is diversified?
By the sound of it, these companies don't quite understand that agriculture, vertical or traditional, are PRODUCT based and not SERVICE based. Not only that, but agriculture is something that Humanity has been doing for literal thousands of years. Do they really think they can outdo a family in Kansas that's been successfully farming the same land for over three generations? It's agriculture, not rocket science.
yes yes they do that can be said for a lot of "smart rich" people. they think they can design something better. But that is almost always never the case. mostly because there not smart at all they just think they are.
Well, the guy in the video even shows his biases, saying traditional farming is basically for the stupid poor people, and vertical farming is smart wealthy people.
Even though almost every major commercial farm in America is using equipment that costs upwards of $500k.
@@razor191919 $1000k per piece nowadays, plus land costs, plus storage, plus inputs, plus marketing, plus operating costs.. Farmers are some of the most educated and capable folks out there. Chemist, plant biologist, mechanic, marketer, etc..
The success of creating the conditions of the Dust Bowl because farming wasn't "rocket science."
Unfortunately, it's been discovered that in many parts of the world where agriculture has been practiced for centuries, the fertility of the soil and soil depth is at its last gasp.
Some parts of the world, namely Europe, but also some others, have about 30 harvests left in their soil - and the fact that increasing incidents of flooding and heavy rains are flushing away thousands, even millions of tons of valuable agricultural soil isn't making matters any better.
On top of that, when droughts hit regions and turn soils into dust, the soil surface is easily blown away into the air, lost in drainage ditches, blown onto other land such as roads and into nearby cities, etc.
Microfauna in drought-ridden areas are at severe risk too, and while some are detrimental to plants, a greater number are very beneficial. Their loss all affects future crops.
Its the same issue with Aquaponics, on a small scale a small system can easyly produce enough to feed 5-10 families with very little effort after setup. But when you try to move to comercial scale it very quickly strugles to maintain profitability.
Agreed. That's because they don't scale properly. They did centralization instead of replication. Biological systems are better scaled via replication and not via "bigger is better".
I think these will be a good thing for the planet and people. But we dont have the massive amount energy(light, pump water, temperature, infraestructure...)to make these economicly posible. When land gets more expensive than energy vertical farming will be viable. I think these is a nice idea that could help reduce cultive space something that is eating all (forest, water, humus soil, space, ecositems ) way worst that CO2 in my opinión.
@AdrianRodriguez-yq4up
I don't think you uderstand farming. Even with 7 bln ppl on the planet, there is still plenty of room for crops without the need to deforest. Heck, aside from staples, most people could grow their own food in a tiny apartment if they wanted to.
@@sblijheid i think you never looked Google maps or take a plane to see the amount of space that It needs. also crops dont grow on the desert. U need some kind of soil and water u cant put crops in whatever place. Might be better making the desert a jungle than a building that is something. But crops need Big space my country is like 60% crops.... If that is not much for u ok
@@sblijheid yea sure mate mini farms are more space eficcient than intensive tecniques😂😂
The biggest problem with vertical farming is that any technology that allows for profitable vertical farming also allows for even more profitable horizontal enclosed (AKA Green House) farming. And you can build a green house from much cheaper material where the land is vastly cheaper.
AND.... is the food really that high quality? Does it have all the iron, minerals, etc when farmed vertically?
AND... nature needs to be in touch with nature. If it isn't part of the natural cycle it will end up damaging everything.
@@KootFlorisThat's a great point, but tbh, not sure we will have great options in the long future as weather patterns continue to become more and more unpredictable.
@@YizzERR ..if we have a future. Let's try.
@@KootFloris huge part of the food is nowadays produced in green houses, often in trays. It doesn't have much contact with nature anyway
@@KootFlorisyea these is massive in weed industry the indoor cultives are often better because all is control. These works because weed is expensive and will give you money to pay the lights/setup/electricity. But like the original coment said Sun is way cheaper. When espace gets expensive and energy becames cheap It might jump to other cultives. But no way some one can make money producing tomatos these way. Most vertical farming is microgreen wich has lots of energy in the seed. So only a bit of light is needed. But full Sun is other thing, is like x80 House bulbs at 100 cms of the soil. A normal light bulb is 1700lux at 1m, full Sun si 150.000 lux everywere
In india vertical farms are not limiting themselves to leafy plants. Some are growing tumeric etc vertically. And they are also doing direct selling. Hence are very profitable.
Oh thats fascinating. Im wondering how they grow tall crops like tumeric efficiently. Do they perhaps have a shorter variation that can be fit into a smaller space..?
@@ArcticFarming that I have no idea. But there are plenty of videos on TH-cam from farmers and also by agricultural journalists.
What I don't understand is why they don't realize they can grow fodder for animals VERY cheaply. This is one way vertical farming can be profitable. There are sheep, goat and cow ranchers experimenting with this using both shallow growth and microgreens and doing very well.
@@ArcticFarming Mushroom farming is the best vertical farming project in India & villagers are doing it to make good money. Focus only on exotics.
@@timothyblazer1749most vertical farmers are vegan nut jobs. The point is grow sustainable food, not slaughter more animals
It seems like the problem was spending all of their investment on automation and super high tech equipment rather than investing in alternative energy production systems to bring down their overall operating costs to be able to grow more than just leafy greens
Gotta get rid of that labor cost ya know 🙄
@@chrism8180 thats where they royally fucked up, trying to get rid of the labor costs skyrocketed the labor costs because now they can't pay immigrants 4 dollars an hour to pick produce they have to pay six figure salaries to robotics and electrical engineers
@@solarpunk9994 it's the future!!!
I don't think they are super mega dumb. They have a business model. It is called "pump and dumb". It is what made Elon, Zucky, Newmann, Sam Bankman Fried and all the shitcoiners rich as hell. The goal is to make a dumb company but to hype it. The dummer the better. Vertical farming is quite supid. The main selling point is vegetable that have never touch soil or see the sun... Then dumb people see the hype on Robin Hood, buy the crap and few days after it crash in flames. Then you rince and repeat with another dumb idea.
@@solarpunk9994 Not to mention the capital investment in all the expensive equipment and added electricity costs.
I did vertical farming in 2018. Raised money for the business and did a lot of experimenting. I even toured aero farms back when they were still a tiny company in a small building.
Anyways I stopped because of two things.
1. Unless we could grow corn or soybeans at a competitive price I didn’t feel like there was a good future for the business. Charging a premium for a boutique item didn’t seem like it was going to solve the problems that come with traditional farming.
2. The business model after awhile looked like it was going to turn into that where you’re a large scale energy producer and that was going to be half the business. Investing lots of capital into energy production so you can amortize and control your energy costs. The robotics and computer side were in the whole the easier part to figure out. After all farming and farming tools and machinery has been around for a long time.
Vertical farming is all about taking the cheapest electricity and turning it into plant mater. At any sort of meaningful scale energy consumption will be the biggest cost and finding ways to control and bring that cost down is what will separate winners from losers. Half a cent a kWh can make or break you.
2022년 빛 없이 밀과 쌀, 엽채류 등을 키워 우주식량으로 개발하는 프로젝트가 성공하였었습니다.
미래에는 전등을 사용하지 않는 수직농업이 활성화 될 것이라 예상합니다.
또한 수평공간에도 더 촘촘히 심을 수 있어 곡물류에는 더 효과적일 것입니다.
나아가 더 미래에는 뿌리와 잎 등을 퇴화시켜 곡물생산에 더 집중된 맞춤형 종자도 나타날 것이구요.
제 의견이 정답일겁니다.
Yes. you take gold and turn it into lead. Why would anyone do that? Because they know how to get rich quick : Pump and dumb baby!
I think a big issue is that this could work for small custom individual systems that provide healthy leafy greens to the single family homes they are installed in but it doesn't scale up to commercial requirements that apparently need to make dollars on their pennies.
Thats why they want to automate everything and this is the huge profit killer. It can't be competitive.
It can’t be competitive so long as (a) cost of automation is too high and (b) competitive cost of conventional produce is too low.
Both may conceivably change..
Automation may become cheaper (either, paradoxically, with more advanced flexible robotics scaled up in production being able to do more conventional staff replacement, or with simplification and commoditisation of any successful simple agri-automation strategies).
As for competitive cost of food.. main (theoretical) advantages of ‘vertical’ farming are volume density, control of resource, predictability of production and proximity to market.. if crops grown outdoors (or in a an insufficiently protected / controlled environment) get systematically trashed by adverse climate conditions then having a more controlled environment for short supply chain provision of crop production may become more attractive… (although by that point scaling production volume to meet need and breadth of crop type demand would become a serious issue).. and, of course by that point people may be juggling dealing with many other problems..
@@drmartinbartos Absolutely, the margins just aren't there for large scale production at least by current standards. I was thinking more along the lines of incorporating into new housing builds, southern wall (part of or all) and you remove the automation part as the family residing there farms their own preferred crop as part of their daily routine. Like this place but replicated in a package that can meet building codes and retail sensibilities.
th-cam.com/video/j335BTu_vFU/w-d-xo.html
@@drmartinbartos Hope you don't want to change (2) because this turns you into a mass murderer. So many people can barely afford food today. And i can't see (1) ever happening, not in a capitalist society where you have to add at least two more industries to the (pun intended) food chain.
The building architecture with all the cement and the equipment industrie (already huge portion goes to John Deer).
Okay, hear me out bro. Groundfloor = Restaurant, Second, third and fourth floors = farm. The best way to get the highest mark up on food is to serve it in a restaurant. Excess food waste can be composted and grey water from dish washing can be used to water crops.
Every vertical farm that I see start up is always producing herbs and lettuce. They never show/design models for producing/scaling any higher level vegetable like strawberries, green peppers, soybeans, etc.... I wish we could sustain ourselves on oregano and lettuce, but we can't and vertical farms need more profitable products to show the model is sustainable.
Fully agreed. Its no wonder why VF companies that focus on more expensive produce (like Oishii) are doing well while most of those focusing on basic herbs are struggling.
Vertical meat farming might do well producing giraffes.
Surely hydroponics on the cheapest land (desert) to make algae or something would be better. All that sunshine is wasted.
Vertical farming leaf vegetable has to compete with traditional farming in Arizona where land is super cheap and winter growing conditions are amazing (cool with strong sunlight)
Because they are annual crops where you can harvest just 1 or 2 weeks and wait 10 months for the harvest. You need seasonal workers or need a mega farm with dozens of grow rooms. Soybean cost nothing.
The objective of this game is not to look like the most advanced player in the game. The main objectives in any type of farming are increasing yield per plant, decreasing material costs per plant, and maximizing the use of the sq feet you bought. First, it was horizontal farming: how do you fit the most plants in 1 acre? Now it's: how do you fit the most plants in that acre and how high can you do it without burdening the workers (staircases, multiple floors, etc)?
Why did these people think robotics was the way? Probably because they never grew up in land where farming occurs and were never exposed to that lifestyle. They don't pay attention to what people really look for in food and have never been around old people, listening to how much they value good quality food because most of them DID grow up as farmers.
Because investors are idiots that jump on the latest trends without thinking about practicality. Robotics are the future in their eyes, and they probably already have money invested in robotics. So in their mind incorporating robotics into vertical farming will fuel profits in both areas while cutting labor cost.
@@chrism8180 probably so with conveyor belts to move as much as possible with less effort and work, sensors to detect atmospheric changes along with pest control/detection, sickness detection, nutrient deficiencies, toxicity levels in soil/substrate used, transplantation arms, harvesting arms, and so and so. It just takes too much tech to run these facilities through robotics alone and we are not close to those levels yet. Great idea, awful timing.
at my previous work, a bunch of AI, automation software engineers, computer vision expert, knowing nothing about economy and farming, wanted to explore vertical farming. They were serious and the top-brass were also excited about it. Someone, whose family relatives are farmer, sat down to do 0th order estimation in order to determine whether the benefit would outweigh the cost. Turned out, event though the premise sounds promising and it’s further romanticized by “driven by AI and automation yada yada”, the whole model would never work. Simply, you will need a large amount of land to make farming sustainable and economically viable. At this point, it is “ok, let’s just do conventional farming”.
Agriculture in the traditional method is the riskiest business and it just got worse with climate change. I have a friend in Japan, just him and his wife, who have a series of greenhouses (structurally reinforced) and they grow tomatoes. The tomatoes grow on shelves and with the use of some tech (climate control, soil samples, crop production and pricing) they make a fairly good profit. But like many farmers they need to expand so that they're not working 7 days / week, 365 days / year. I grew up on a dairy farm. Vacation wasn't really a word for us).
@@rabbit251 there are maybe other solutions, vertical farming is not.
@@kuantumdot Well, don't keep us in anticipation; what other solutions are there?
And my point was that high tech vertical farming is a waste of money, but lo-tech vertical farming is profitable. Look up what the Netherlands has been doing. The guy who made this video focused only on the high tech companies. The Dutch have been doing vertical farming for decades with only minor problems.
@rabbit251 He did sort of touch on it, but he blamed it on hype, particularly from VCs, who wanted to see fancy tech at play. Well, he didn't really blame the VCs as much as he should have, but hype and VCs are pretty synonymous in hindsight.
I did get the feeling that there was just so much unnecessary technology being thrown at this, but the VCs never would've invested unless it was there. Low tech vertical farming just wouldn't 10x or even 2x their investment, and they're not there for that. Plus, the fact that it already exists, and it's not everywhere suggests that it won't grow like they want it to. Ironically, safe investments are just way too risky for VCs, because they take on so much risk that they can only afford investments with ridiculously huge potential just to break even.
There are many other solutions to the problem. The best would be more sustainable methods of food production. If you would for example grow more crops on your farm and not separate them, you would have a much smaller pest problem. If you do it right and plant something that is susceptible to one specific pest to the plant that pest is not a fan of, you will have a better yield than you would if you used a pesticide. Monocultures are way less productive way of farming because of pest problem. If you have a huge field of just tomatoes for example, you will need to use a lot of pesticides because your field will be a "promised land" to some species that likes to eat tomato leaves. Use of pesticides just means that the ones that have a genetic variant that is making them survive eating your crop will survive and reproduce. After some time you will need to use more pesticides and the stronger ones. That costs money. That is to eventually happen no matter which crop you will decide to grow. That is why the polyculture means larger yield. The problem is that the people who were to buy from you and then send it to the stores are not fans of this behaviour. They prefer getting a large amount of tomatoes from you over getting a smaller amount of 8 different crops.
You hit it on the nail with selling salad and other leafy greens. The way to get vertical farming worthwhile is to use dwarf trees on tilting soil-pad, to easily remove the fruits from the trees, and sell them for a juicy price. Especially useful for selling expensive products. For example, GMO vanilla, very sweet strawberries even in the middle of the winter, and other expensive delicacies. The advantage is that the fruit can be ripe, because it doesn't need to survive weeks or months of transport without turning into mush and/or rotting. This means that, if they manage to sell them for the same price or slightly more than produce brought in from somewhere else, by being tastier and not much more expensive, they will be able to brow their market rate. I mean, when was the last time you tasted an actually-tasty tomato? Bring a few heilroom varieties from Europe (especially Eastern Europe), Mexico, South America, and East Asia, and you will be able to sell much tastier produce, which will make you more desirable.
Well
As someone in south eastern europe
Tasty tomatoes are kinda all the time
Most people i see complaing vegetables have no taste or taste like styrofoam are americans
But i always viewed that as their conscious decision to sacrifice their actual food and health for the sake of profit and to please their god the "Capitalism"
And they even seem against chaning that as well
Money is king in the us
Planting cotton, coffee, cocoa, dwarf sugarcane could bring in the riches
The big problem still remains, greenhouses can do all of that at a fraction of the cost of artificial lighting. The sun is free... The cost of land is not that big competed to energy cost to make it profitable to stack crops on top of each other and have lower or similar cost to a greenhouse where you have the same environment control and can grow crops in the winter but you don't need to artificialy light your plants.
The Fed acted recklessly, after giving nearly 0% rate finance, suddenly increasing rates more than 17 fold. Not many businesses can cope with that sort of change, except mainly well established businesses, with already large amount of capital and cashflow. Startups on the other hand, will fail. Farming takes time to grow and mature, and vertical farming needs this sort of scale to be viable, however, with sudden interest rates hike have made it unviable, even at scale. Slow growth maybe possible, but as I said, it needs to scale to a viable level before its sustainable, and that requires borrowing. The purpose of the Fed is to smooth out the economy, and infact its doing the opposite as they are using data which is lagging. Similar to trying to drive a car while looking through the rear view window of a car.
Couldn't agree more with the scaling issue. Vertical "growing" works great for the hobbyist subsistence farmer not a full blown production company. If I want to plant pumpkins next year on a plot of land vs corn in the past, no problem. Not so with vertical.
Based on some of the other comments here, it sounds like this idea is gonna crash even further into the ground if they don't find higher value crops to produce. Plus, it really seems like the VCs kind of worsened the business because they made vertical farming something far more technologically intensive than it needed to be. Still, time will tell, but as with every business, the real successes are the ones that happen in the worst economic conditions. Everyone else was just conducting bad business with free money.
I think you have great points here. A lot of VCs and institutional investors were investing into the first-movers with expectations of incredible returns while putting a huge emphasis on the IP. The issue is, even if your particular VF startup is the first to develop a certain technological solution, there is no guarantee that the IP can be protected. Again, there is nothing weird going on at the market when comparing to other new industries - there was a ton of hype and a lot of people jumped on board. Now that hype bubble has burst, a lot of people lost money and those still standing will have to take a hard look in the mirror, making sure that they dont repeat the same mistakes.
There were a couple in India who used this technology to produce and sell weed 😂😂😂😂
Of course the government arrested them
@@zroth3734name please?
problem with unicorns is their management focus alot on hype and investment cash pump to sustain their business. Instead from day 1, they should be planning their business on cost efficiency and to push for profit and loss balance so that their business can become sustainable.
Good video! A few thoughts for potential vertical farmers:
1) Beware the adoption curve. New things or ways of doing things follow fairly consistent adoption curves. If you don't know what I'm talking about, you are going to waste a lot of time, money & hopes/dreams getting to widespread adoption. See business books like "The Innovator's Dilemma."
2) Recognize the huge differences between Research, Development & Manufacturing Scaling. This will affect your thinking on capital intensiveness, what the employee mix will be (and associated costs), accuracy of predictions (R is terrible for predictability, MS can be pretty good, and D is usually in the middle). And as your innovation matures, these "settings" will change so your capital intensiveness, management structure, timescales, etc will have to adjust to meet these changing needs.
3) Truly understand the existing market before thinking you can disrupt anything other than your bank account. Mistakes are awesomely expensive if it's even possible to overcome fundamental errors. Food is a classic commodity with lots of substitutions, deeply entrenched supply chains, and frequent boom/bust cycles. The best sometimes get destroyed so your new thing better be good and lucky too.
4) All of these mean that different kinds/scales of businesses have wildly different costs, timeframes, predictability, profitability, etc. Do you know what to expect & have good justification for it?
Great analysis! Whenever I've sat down with friends and gone over their gung-ho business idea with this level of seriousness and detail, they always seem to end up saying, "You're so NEGATIVE!" then ignoring me. If they do proceed they usually fail spectacularly then blame externalities including "negative people."
Can you do a video about photovoltaic glass in greenhouses? It seems kind of exciting to me. It converts the infrared part of the spectrum into electricity, but lets visible light through. So the plants are still getting the wavelengths of light that are actually useful to them, but the roof of the greenhouse is now generating electricity.
That's actually awesome, I've never heard of it
Semi-neat idea but I bet the power produced is weak compared to a bank of regular solar cells off to the side somewhere. Only so many milliwatts per square meter in sunlight to extract energy from.
@@ARoyalLyon Honestly, the current state of what you can buy for PV glass isn’t particularly impressive. One of the more compelling options is ClearVue, which lets 70% of visible light through, and provides 30 peak watts per square meter. You could get the same transparency by covering 30% of the surface of the glass in traditional, opaque solar panels, and you’d probably get around 60 Wp/m2. But there’s been some stuff in the lab that’s 80% transparent to visible light and provides 130 Wp/m2 under simulated sunlight.
As we all know, plants only use red and blue light for photosynthesis. PV glass used in greenhouses could then absorb green light for conversion to electricity without depriving plants of anything useful to them. Sadly, I can’t find any PV glass designed to absorb green light. Quite the opposite, research seems to be focused on making color-neutral PV glass. Good for human dwellings, but suboptimal for agriculture. LUMO makes panels with a luminescent dye that absorbs green light and re-emits it as red light. So, I guess that’s another way to prevent the green light from going to waste. They put the stuff in PV glass that they claim makes 50 Wp/m2. Not sure what the effective transparency is, when you consider that some of the wavelengths are converted. Accounting for the differing usefulness of different wavelengths would make it hard to compare to other PV glass.
@@billberg1264 Thanks for all the interesting info. I studied a bit about plant wavelength utilization when experimenting with indoor farming which proved more trouble than it was worth for me.
The atmosphere blocks most of the IR that comes from the sun.
in other words....if a business model isn't financially sustainable, it will NEVER be environmentally sustainable.
Environment sustainability is a joke.
Yep, this is thi basic idea in any sustainable business. Sustainability can't live on its own unless you are running a non-profit.
@@denniskatinasas is what is accepted as business sustainability
I feel like this was imminent. The applications where not the ones that where competitive enough against other methods that don't require high tech equipment and especially the mountain of energy. I would like to see people apply their knowledge in vertical farming in areas where water efficiency is more important. To be fair a lot of farms are still testing the capabilities, but the focus these companies, or maybe the invesors, had in mind where just unsustainable.
Did they really think that many people were going to eat micro-greens every day? Looks like they totally over-estimated their market.
Majority of vertical farms
algae based startups also went through this, there was a wave of algae based solutions for use in biodiesel, food, cosmetics.
Oh that's interesting, hadn't heard of this before. Do you have any recommendations for videos or blogs that I could read about the topic?
@@ArcticFarming th-cam.com/video/xwHdl2cD5bk/w-d-xo.html
@@ArcticFarming How did you manage to miss it? It was caused mainly by Obama-era green incentives. Leading to a lot of greenwashing and businesses that were never even viable on paper. It's a common theme from algae to plant-based meat substitutes to vertical farming.
Same pump and dump scheme!
true.@@pierregravel-primeau702
Vertical farming was a noble idea, but in the end of the day you can’t beat the sun and a flat piece of land with good soil
We need major advancements in desalinization IMO if vertical farming is really going to deliver on its promise.
Hey and thanks for the great point! Would love for you to elaborate a bit more on your point. I can see the use of desalinisation in certain VF applications but would love to learn more about your thoughts.
@@ArcticFarming I haven’t studied VF much but I have thought a lot about how it could change the world by removing the need for transportation and by decoupling supply from seasonality/locality. However freshwater is in short supply in the areas that would benefit the most from it, like North Africa or other desert regions. Food security goes hand in hand with the stability needed for economic development and water supply is a big part of the limitation on food supply for nations like Egypt or Libya. Decoupling these areas from limitations imposed by water supply is one challenge. Then VF can help decouple them and others form limitations imposed by climate.
Your problem is not water, it's electricity. You don't need an advance in desalination, you need a fusion reaction. The most expensive input in agriculture is solar energy.
@@Invisiblehand123 I think fission is sufficient so long as it is supplied in controlled territory.
@@DavidConnerCodeaholic Too expensive. Calculate how many watthours of sunlight a ha of wheat receives during its growth period. Now convert that to artificial lighting. You will see it is not even close. You would need damn near free energy for vertical farming to make sense for staple crops.
Curious, I’d be retiring/working much less in 5 years, and keen to know best how people split their pay, how much of it goes into savings, spendings or investments. I sometimes earn up to $200K per year, but nothing to show for it yet.
It's a personal decision, but considering the uncertainty of the future, connecting with a financial advisor for proper financial and investment planning is a wise move.
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Another consideration is that these companies spent a lot, perhaps a majority, of their resources figuring out how to automate and scale their systems rather than actually doing the farming. Y'know who already knows how to scale a farm: Koch, Tyson, and ConAgra. For round 2 of this tech, expect the legacy companies to make it successful. Expect to see John Deere, Case, and New Holland mass producing the equipment.
I never got the vert farming thing. The one huge advantage they have over regular farming is that they utilize way less land. But land is not a scarce resource. Their biggest advantage is solving a problem that doesn't exist. Also, you still need the same amount of light per plant and a fixed amount of sunlight falls on each unit of area on the earth. So for many levels, only one (or maybe two) will get the sunlight and the rest will need to have light generated. Here's an idea: take all those levels and spread them out to make a single level. Do it, say, in a field. Additional cost savings arise by using the dirt that is already there instead of mixing up a bunch of fancy potting soil. No need to train the workforce as there is already a bunch of workers who have been doing that type of work for a long time. Same for the machinery, trade in those fancy robots for a John Deere or three. Now what do you have? A farm. Genius.
Well, an additional theoretical points for vertical farming are (1) independence of a season (produce whatever and whenever you want); and (2) controlled environment, so you do not need to use pesticides and etc
Hydroponics and aeroponics use way less water, too. Then there's the matter of transportation costs getting harvests into cities. There do seem to be some major upsides to vertical farming if the power usage problem can be solved.
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The problem with our food system in the US isn't production, it's distribution. We routinely throw out almost half the food we produce. Subsidies and price supports keep commodity prices high to protect prodcucers' profits instead of allowing costs to fall to market levels.
When the cost per square foot is $235 and the produce is worth $0.03 per harvest and you can only harvest 8x more. That makes your $235 sq ft worth $0.24. It will take 979 years to break even. It will happen. Eventually. Now... if they want to make money. They should grow something with a high sale value. I suggest the poppy plant. They could recoup all expenditures in 4-6 months.
That's hilarious, but I wouldn't give them ideas. I can hear the sell, "we need locally based heroin to stop funding overseas terrorist groups, and ensure there's no fentanyl being cut"
I can't wait for the synthetic meat labs to show how "sustainable" they are!
Don't forget about the depopulation agenda...
Theoretically meat grown in a lab could be much more efficient since you only need to grow the edible portion of the animal.
The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies
The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
Even with the right technique and assets some investors would still make more than others, as an investor, you should’ve known that by now, nothing beats experience and that’s final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I’m buying again
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Very good analysis. Two years ago, I was involved in a Vertical farming project, and I had the same suspicion after I learned the electricity cost of it, which has leave vertical farming almost zero margin already. Not to mentioned that these startups hire and pay high salaries for engineers, whose payrate is way higher than traditional farmers.
The sun gives you 1000w per square meter to make food, going vertical doesn't give you more sun.
That's where my revolutionary idea for the next innovation comes in! Ready...? Horizontal vertical farms! Like vertical farms, but we flatten them out and spread them across a wide area of outdoor land so we can use the sun's energy instead of paying for electricity! Horizontal = Vertical 2.0 !
@@yuchoob Was thinking you would come up with diagonal-farming (staircase-farming) but you went a bit flatter than that..... ;-)
Except when your farm is at the higher (& lower) latitudes on the Earth. Then the sunlight comes in from the side more than from above.
I know bamboo and cactus farms work great stacked vertically.
At least in 1.20, don't know which patch you guys talking about
hahahahahah
I never understood how building a building and lighting it artificially and hiring people to take care of it possibly made more economic sense than sticking a seed in the ground.
Seasons. I might try it on my own (no hiring anyone), just to have a basement garden producing lettuce and cabbage year round. But that's mainly for fun.
Water usage, pest/environmental control / reducing waste, transportation costs, plants that can put more of their growth into producing edible parts since they don't need to be hardened against a harsh environment.
We in India are building low cost greenhouses with good standards still local farmers are able to produce at low cost and Giving tough competition.
Market acceptability is the key
And I imagine that if the electricity turns off for two days, these farms may be destroyed (to different extents). What if it is off for 10 days? This is just not reliable source of food that can be depended on.
We've actually spoken about this risk in another video but its definitely a risk alongside pests and diseases. Naturally, any well run indoor farm would have redundancies for this but you do have a point - what if a natural disaster hits and cuts the power for a longer period of time? Does this mean that vertical farms cannot be located in high-risk areas where floods and tornadoes are an annual threat? All good questions.
@@ArcticFarming Vertical farms are probably safer against floods. Just get a secondary generator. But say solar storm kicks out electricity for weeks. What would the people eat then if 10-20% of city's consumption were grown in farms like that...
If electricity goes out for weeks, civilization would collapse with or without vertical farms.
Another major challenge is that in countries which are land + water constrained (think islands) typically are located in parts of the world where steel/building materials are hard to get. So any imported steel has stiff competition for what its used for and vertical farming very rarely would be worth it.
This is why I stopped looking into a career in vertical farming the places that it would help the most are the least likely to be able to use it.
It always seemed like to me, like a lot of these 'green' technologies, they don't scale well. they're great for maybe running a small one for a family to manage and subsist on. or maybe a small community to supplement normal farming. I always just assumed these startups were smarter than me and had solved that scalability problem.. guess not so much.
A lot of those green technology come from hard sci fi concept, but here is the catch, most of the those concept were developped to answer to new limitation that we might encounter, while ignoring some of the limitation we currently have.
Vertical farming was literally born when a professor and its student tried to estimate how much food could be grown on the roof of new york, when they found the answer unsatisfactory they simply explored the idea of creating farm inside a building that could feed 50 000 people. It was never supposed to be built or practical
Vertical farming was basicaly developped with the assumption that acres of fertile lands are a premium and rare ressource that need to be optimized. But on Earth this isn't the case at all. That's why it doesn't work. It will probably be interesting to do vertical farming in places where fertile land is a premium and energy isn't. Like in desert or maybe space in the future.
On average, humans consume 2,250 Cal a day (2,000 for women, 2,500 for men). You can convert this to Joules (remembering that 1 Cal = 1000 cal and 1 cal = 4,184 Joules.
Therefore, you need 2,250 * 1000 * 4,184 = 9,414,000 Joules per day to survive. If you divide this amount of energy by the number of seconds in a day, you get the average power in Watts that a human being consumes:
9,414,000 / (60 * 60 * 24) = 108 W = 0.108 kW
Therefore, the human machine consumes as much as a 100 Watts incandescent light bulb. So far, so good, we are pretty efficient.
However, the losses in converting electricity to light (90% for LED) and converting light to grain and straw (0.2% for wheat) are quite considerable. Plants will use most of the energy they consume as light to grow, sustain themselves and only a small percentage of it will be converted into something that can be further used by us as an energy source.
Taking into account the average cost of electricity in the USA is 0.132 cents per kWh, to produce the necessary food (bread, for instance) to sustain a single human using electricity would be:
0.108*24*0.132/(0.9*0.002) = U$ 190.08 per day (or almost 70,000 dollars per year).
Vertical farms only make sense for crops with almost zero nutritional value (in terms of energy), such as greens.
I’m thinking the nutrients used are getting very expensive 🤔
They are, that is a very good point 👍
They are growing things with artificial light. That's the part that's expensive, water and nutrient use is more efficient than traditional agriculture.
with the thumbnail, i thought this wouldn't be that serious a video
but dang it's very good and very well put and researched! Thank you!
Thanks a bunch for the positive feedback! I do appreciate it. The thumbnails kinda need to serve the youtube gods sooo.. 😅.
We have some really cool new content coming out (starting today) and i hope you feel the same way about them as well.
Traditional horizontal farms get sunlight and much if not all of the water for their crops for free out of the sky. Vertical farms have to pay for artificial sunlamps and to pump in water. All while there is plenty of farmland or potential farmland available. I think it is going to be a very long time before vertical farming could ever be competitive with horizontal farming.
I would like to see a single traditional farm that gets even close to a majority of its irrigation water through rain. According to the World Bank, agriculture accounts for an average of 70% of all fresh water withdrawals globally. On top of this, large scale farms use huge pumps and irrigation systems (ergo energy) to move that water around and to distribute it evenly around the farmland.
On your other point, one of the key issues why vertical indoor farming has potential is because we are running out of arable land. So no, we cant simply expand our outdoor farms indefinitely.
Yes, traditional farms do use sunlight, but this is not always a good thing. What we need is an even and a predictable amount of light - something that can be very hard with traditional outdoor farms.
I appreciate the comment and as i stated in the video, vertical farming is not perfect. Still, traditional agriculture has huge issues that "free sunlight" is simply not going to fix.
@@ArcticFarming For some reason, YT decided not to post my reply, so I am trying again. I think it is because I am trying to cite my sources, and YT does not like that. If this comment ends up showing up twice, though, I apologize.
First, the vast majority of traditional farms get the majority, or, indeed, all, of their water from rain. That same World Bank you cite reports that only 20% of farmland is irrigated, and only 40% of total food production is from irrigated land. Granted, irrigated land is disproportionately productive, but it could hardly be otherwise: the costs of irrigation can only be economical where irrigation would make the land highly productive. To put it another way, that irrigated land is so disproportionately productive shows just how efficient irrigation is.
Second, we are not running out or arable land. Since 1960, the amount of land under cultivation has actually shrunk in the developed world, even as agricultural output in the developed world had risen. Since 2000, the amount has been falling in much of the rest of the world as well, including China, the Middle East, Oceania, and even India now. The only places where there is any growth still occurring are Africa, Asia (excluding India, China, and Russia), and Latin America. And even in those places, the growth has not been large.
Vertical farming is a non-solution to a non-problem.
@@redrackham6812 You're assuming all that land that is no longer under cultivation is still arable. It's not. The Midwest will be unfarmable in 60 years as they've done nothing but monoculture over the last 150 years and the land is running out of topsoil. We've lost another 5% of our farmland due to suburban sprawl. Every day we lose 2000 acres of mostly arable land around cities (which were built around agriculture) to build McMansions that do nothing but destroy the planet. What's more, climate change is going to destroy most of our best farmland by 2150, because our most productive farmland is located in river deltas that will be completely under salt water. I can't imagine a problem that needs solving more urgently than this.
@@VulcanLogic Except that pretty much all of that is nonsense. First of all, let's deal with the suburban sprawl argument, since that at least has some basis in reality. Yes, it is true: some of the land that is no longer being used for farming is now being used for other things, including housing. Not all of it, by the way. There are huge tracts of New England and northern New York that was all farmland fifty or sixty years ago and now it is all forest. But so what? The idea that land that was once farmland but is not anymore should be preserved as is so that it could be turned back into farmland at a moment's notice in the future is frankly absurd. Of course it is being used for other things, including housing.
As for the claims that agricultural productivity in the Midwest is going to collapse because of topsoil erosion over the last 150 years, the reality is that agricultural output from the Midwest and the rest of the country has done nothing but increase since the end of the Second World War. It is now almost triple what it was then, even as inputs have been flat. Meaning that efficiency has almost tripled. Topsoil erosion was a big problem during the dustbowl of the thirties, but not since then.
As for the claim that farmland is all going to be under water, please allow me to reassure you that the world has been much warmer than it is today at many times not only throughout recorded history but also in prehistoric times, and sea levels were no higher than they are now.
But let us suppose that I am wrong about this and you are right, and that there is a looming ecological catastrophe coming. Vertical farming would not be the answer. It would be a huge part of the problem. As I said, it would require enormous amounts of extra energy, since you would have to replace natural sunlight with energy-intensive sunlamps, and you would have to pump enormous of water straight upwards. At least with horizontal farming, irrigation, when it is needed at all, does not have to directly fight gravity. Water is very heavy, and you are talking about pumping an enormous amount of it straight upwards. So you want to prevent an ecological catastrophe by making agricultural much more energy-intensive? That would not be part of the solution; that would be part of the problem.
@@redrackham6812 We know sea level was higher 3 million years ago because we know how geology works. It was almost 100 feet higher than today. Fun fact, the concentration of CO2 was actually lower than our current ppm (412 ppm vs 418). So yeah, we can just dismiss you as not credible by that comment alone.
As someone who has worked in sustainable agriculture I’ve been saying for years now that vertical farming isn’t the breakthrough that we want it to be because all it produces is extra pricey salad. We still can’t even reliably produce basic fruiting crops like peppers or tomatoes in a vertical context let alone the staple crops that produce most of the emissions in plant based agriculture and use the most land such as corn, soy, and wheat.
Its easy to grow tomatoes in a vertical context, simply choose a micro tom variety to maximize efficiency, especially light which is, by far, the biggest cost for indoor facilities.
So they save on land but the extra cost is higher than the savings
Pretty much 😅
@@ThomasVWorm so what's the point of vertical farming then?
@@ThomasVWorm that's a nice hobby. I like gardening. On industrial scale it's not viable.
Hydroponics usually won't work above a certain scale due to shipping costs unless you export. It's just too cheap to get in for a total corporate takeover.
Why are you paying top dollar to engineers if they are not going to offer you a solution to efficiency problems, energy costs or product changes?
That's the billion dollar question that many VF firms seem to have failed to answer.
@@ThomasVWorm I can, but no one is hiring me.
We are farmers in an area with a lot of green houses and one of the problems in green houses is plant fungus but the direct sunlight does help mitigate somewhat but in vertical farming there is no sunlight. Would you not think that the smart guys would have not seen this problem LOL.
From my own occasional attempts to grow my own closet cannabis over the decades, I learned the dirty secret of successful indoor gardening is LOTS AND LOTS of chemical spraying. Every "organic" crop I tried failed... some to fungus at the seedling/clone rooting stage, some to pests like spider mites when crop was 90% of the way to harvest time.
They need to grow labour intensive products, like vanilla.
Our team is actually researching a few crops like these. The issue is, they take a hell of a long time to grow so accumulation data on the validity takes a lot of time compared to growing salads 👉 this being one of the key reasons why most VF companies started with leafy greens and herbs.
@@ArcticFarming let us know how it goes.
I'm not sure where these startups were targetting (Europe or North America?). In the US I think it's fair to say...we aren't quite there yet, thankfully. Or regretfully...given that one of the two major market failures is the low-ish demand for leafy greens (we should eat more greens). But also, land isn't scarce enough to warrant the capital costs to go vertically.
How many of these startups were doing aquaponics? Might help to offset your fertilizer inputs (fish food) with marketable protein.
Small scale .5 - 5 acre farms are what we need. Vertical farms will fail every time, and can only produce essentially micro greens.
In the current state, this is true. But, once energy is cheap, we can save land, water, transportation, eliminate pesticides and so much more. Including consuming CO2 in cities.
Right now it's an energy problem. That problem won't always be a problem. Leafy greens are just the first test and take the least energy. Energy abundance is coming soon.
@@tripplefives1402 I have five acres and market garden intensively on 1 acre. I feed a lot of people with two farmer's markets a week and restaurant sales. Lots of leafy greens but also root veg, strawberries, tomatoes, peppers, eggplant, winter squash. We are also growing many fruit and nut trees as well as berry bushes, herbs chickens for eggs etc. Corn provides very little human nutrition, you must get tired of eating just corn.
@@tripplefives1402 Mark Shephard wrote a book 'Restoration Agriculture' where he does a comparison of the value of corn/soybean production vs his polyculture system based on permaculture scaled to feed a lot of people on a 106 acre scale, maybe consider reading that and challenging some of your beliefs. Respect to any farmer for doing what you do even if it is different!
@@tripplefives1402 Yes He is setup for machine harvest for some of his crops including nut trees and berry bushes. He also has cider apples and grows asperagus etc. He also does mixed rotational grazing of cattle, turkey sheep and chicken. Yes I'm sure there is labour but this is far more productive than corn and with perrenial plantings you don't have annual planting costs and your harvests increase each year. A multitude of crops insures against individual crop failures or shortcomings.
I am all for vertical farming but more as Victory Gardens for COMMUNITIES not businesses, in highly urbanized places. This includes building in real top soil for the bigger models creating it from Human Manure by slightly charring it, replicating how it was created in the Amazon. In smaller ones you use very small foot prints as a supplement. Also you need to add in Organic Solar Panels to stabilize and minimize energy costs.
The victory garden idea is actually being done in Phoenix Az.
Do one for fake meat products.
They are trying to make high profits on a business that typically struggle to make money at the low prices we pay for food.
Excellent analysis. Thank you!!!
Thanks so much, i appreciate it! Do let us know if you have any questions or related topics in mind, that you would like to learn more about 👍.
@@ArcticFarming Of course, well earned and thanks for your response! I normally always have a topic to propose but I'm struggling.
How bout how you/research see the industry evolving over the coming years and decades. What proportion of farming will vertical farms be along with lab grown meats versus traditional farming? Replace, become a sizeable fraction of, or only be a niche for the next 30-50 years? How will that affect soil regeneration/rewilding efforts, as well as consumer food prices (given sustenance has gone from like 50% of people's budgets to less than 16% over the last 100 years). Those are all topics of interest around this. But maybe these are too broad and not specific enough to this channel. I am new but definitely interested thanks to the quality of the analysis.
Fertiliser prices skyrocketing 200-600% thanks to Russia embargo and global shortage probably a huge factor
The main input in artificial fertilizer is natural gas. So I agree with you . However even in the long run this makes it unsustainable.
@@phillipphil1615 Natural gas and potash. Both exports that Russia and its allies hold a huge international market share of..
Our dependence of fertilizer and upcoming food shortages is far more worse than people understand.
That's a great point, thanks for bringing this up! While the video makes the issues seem rather simple, there are a million different issues that impact the overall market - fertilisers being a big one.
@@phillipphil1615 all forms of unnatural hydroponic food production require artificial crude based fertilisers , and produce tasteless vegetables filled with glyphosate and other carcinogens . Because of human stupidity and unreasonable demands, not practising crop rotation and converting the most fertile land into housing instead of farms . We require enormous amounts of artificial fertiliser to sustain our food supply .
Hi, vertical farmer here - this was a good breakdown. However, saying "just salad" does no justice because this "just salad" is a *$195 Billion dollar a year industry in the US alone,* $700 billion if we go worldwide. Just romaine and iceburg make up 1/5th the entire vegetable market, and if we factor markets like the medicinal herb space, it hit over $200 Billion in 2022 by itself. That's enormous, and there's been very little innovation. All these over invested, over politically hyped corporations dropped the bag. Time to pick it up.
Hey @rochestermicrogreens and thanks so much for the great comment! You are absolutely correct, the salad/lettuce category IS massive and perhaps I should have been a bit more clear in my criticism. The core issue here is that indoor vertical farms struggle competing with traditional agriculture (like greenhouses) when it comes to these 'lower cost' product categories. It would be much preferable that indoor farms would focus on more specialised and higher cost/margin products that are either a) difficult to grow or procure locally with other means, or b) that have more specialised use-cases (like cosmetics or medicine).
Im sure we will definitely see a day when indoor vertical farms are able to compete in price with conventional ag, but most operations are simply not there yet.
Would you agree? Appreciate the discussion 👍
So I do agree in principle, on many points; but I would challenge a few assumptions. First, why can't we compete in price? Costs are higher overall; but not by a significant factor. I know because i'm doing it! Nor does that mean we can't compete based price anyways because it's all about what value you're offering. There are many ways to compete, including but not limited to quality or variety.Indoor farms are hyper local, and completely free of all chemicals. I also grow varieties that you can't get anywhere else. This is another huge value to price point, offering exclusive strains of common greens. I don't know if you ever do podcast type interview stuff; but i'd be happy to contribute. @@ArcticFarming
Hi Olly, I haven’t seen any videos where you have mentioned nutrients. I am setting up a very small hydroponics system and I’m thinking of using liquid seaweed kelp. Would you say this is a good nutrient thank you I am in England
@Freakhealer has a good recommendation in the thread here. We are not necessarily experts in all kinds of nutrients but there are a ton of great resources online that you can use. ZipGrow has also a great academy for VF called Upstart University (we are not affiliated with them) that had a ton of great info and a wonderful staff.
Oh thank you so much I really appreciate your reply’s
@wombleok112 hey wombleok im planning to make a tower fountain over winter to do maybe chinese cabbage.. im also in the uk.. be interesting to see how yours goes aswell.. im a need some form of netting i suspect.. also with kratky method i just use compost tea and maybe some miraclegrow or whatever..
@@ThomasVWorm::: Seaweed has to be harvested, processed, and pulverized, to allow it to move through a hydro system.
@@willappleton::: Please look for organic food for your garden.
Vertical farming should be tapping free energy sources - think waste heat from a steel mill or nuclear power plant. You might not want your produce grown next to a heavy industry but if you think about about it, vertical farming is intensive industry and does not need to be located in an agricultural area.
That's an incredibly good point! I think this kind of a model could have a potential to make use of huge waste streams for a very low cost 👍.
I can throw potato cuttings into my compost bin and I get plenty of free potatos next year. Near zero investment crop. The worms do all the work creating a fertile soil.
Sometimes it baffles me how such industries can collect hundreds of millions of USD without a proper business plan. Makes me wonder how much some people look into start-ups which they are funding.
Because of the electricity bills...
Vertical farming is ok, but under a greenhouse with towers.
There are a ton of really interesting mixed solutions that combine vertical farming and greenhouses and I think this has a lot of promise! Really interested to see how this works out in the long term.
@@ThomasVWorm that's why you have to leave enough room for the light to not leave its shadow over other towers.
@@ThomasVWorm growth input advantage is reserved, growth speed might be slower due to the light force, but remember the light reflects and even under shadow plants grow, the sun is powerful enough. And the output is organic and available in all seasons.
Anyways I saw this concept in Agrotonomy, I don't know about the efficiency
Many thanks for the video and I enjoyed listening to the analysis of the failure of the vertical farming project. I deal with projects as a fundraising consultant and the most important we are looking for is the feasibility study and to check will the project will be feasible to fund. What is shocking is the high cost the human resources, robots, and eventually electricity. All that to produce salad and very cheap products such as lettuce and cucumbers. All these expenses can be reduced and using less expensive robots or using a combination of advanced robots and semi-manual equipment. Hiring less expensive hr. Also investing in getting more profitable crops such as saffron and cardomoin and other expensive spices will generate higher income to the corporations involved in vertical farming. Again many thanks the video it was very informative and a very good learning experience.
real farmers don't pay for sunlight, air conditioning, and city taxes.😂
Dude just saw that your channels only on farming ... your thorough research deserves that this channel has more videos on businesses succeeding and failing ....
So vertical farming can't be profitable in the current cold war climate where food is skyrocketing and transportation cost (from farm to city) is going up too...
Yep, thats pretty well summarised.
I support this kind of farming since normal farming is running out of land... But right now it is only experimental. I would like to work in such things but don't see any nearby...
Yep, just like with any new technology, vertical farming is still in its early stages and will see many waves of development before it matures. If you are interested in working with vertical farming but you have no firms close to you, you could always start building your own small-scale system in your home 🙂.
Lol... we're running out of land. 😂
I think there's a fourth reason for vertical farms financial issues. After the hype cooled a little, short-sellers hit any publicly listed companies hard, Appharvest is a good example, their share price has been hit so hard that their ability to raise capital has been smashed even while their revenue and unit economics grow. And there has always been a vulnerability: "Old-economy" types with a lot of money can choose to short these companies with the specific intention of destroying their ability to raise capital. during '22 many green/ESG companies were targeted by short-sellers simply because they were considered "woke." Politics has skewed market valuations, Appharvest is a good exhibit of this.
Oh that's an interesting point, didn't think about that at all. Any idea if there is a way to check the amount of shorting that has been done on the stocks? Would be fascinating to see the volumes over time.
I'd hardly doubt anyone really paid attention to Appharvest.
And this isn't even always the case. As seen with gamestop and Tesla
Appharvest has $200M of debt, it is not profitable and not projected to become profitable even by the company itself within the next 2 years (which probably means 4 years) and needs about $180M to ramp up the production on the current 4 facilities. And even if it became profitable, revenue would be ~$60M and earnings would be in the single digit millions which does not justify a value of $1B which it had when it deSPACed (or even $4B at its ATH). Not to mention that all 3 of its financers are alleging them of default. It is also at risk of being delisted from Nasdaq because it does not comply with listing criteria. This stock absolutely deserves its value and it has nothing to do with being "woke" or political.
@@ArcticFarming The NASDAQ website has a "Short interest" page for stocks which includes the history for the last year, records exist for longer frames, but don't seem to be as easy to find, I'll reply again with a link (just in case YT filters outside links here) APPH has generally had 15-20% of it's shares sold-short continuously for at least the last year. (that percentage is considered high, "Typical" short interest is usually approx 2-4%)
@@GameFuMaster You're probably right, but with them trying to do indoor farming in Kentucky with a well-paid and diverse workforce. And all the B-Corp, ESG, community stakeholder stuff they feature so heavily it's easy to imagine how conservatives in/around Kentucky might see them as both a threat and a target. An obvious point of concentrated "wokeness" to make an example out of. "Go woke, go broke" The finance bros have the tools to make that happen.
Traditional farms rely more on labor and free sunlight provided by the nature to grow their crops, while vertical farming rely on the use of technology like leds and grow lights which consume electricty constantly. Not to mention the irigation system which usually use pump or spray. The importance to always check the growth parameters all the time with robot and computer on high tech vertical farm add more cost to the process. In the end, the final products are rather cheap like you said. It is like doing a lab scale experiment, but expect the result to be commercially profitable.
So to be fair, if they had integrated more renewable energy sources into their building designs, and hired people with an interest in farming, then the costs would have been considerably lower. If you pair that with growing foods that are in demand, but not bulk, for that area they could have been sustainable.
Perhaps. Its hard to say for sure because of the lack of general transparency in the industry. Most firms that ive seen cite personnel costs and energy costs as the main drivers for their financial struggles but if im being honest, i dont think its this simple. Im pretty sure that a ton of the issues are rooted in fundamental problems with how businesses are run. But again, its hard to say for sure because information is still quite scarce.
@@ArcticFarming I am not surprised that the information is hard to get. I am also positive that there are many other factors at play, not least of all would be lobbies from the big farming conglomerates that don't want to lose control of the lucrative specialties market (chilis, berries...higher value per kg products) to new players. I am in Canada and I am sure that if there was a reliable source of...blueberries all year round, that was locally produced, pesticide free...people would be willing to pay a bit more for that. That is just one product out of dozens that this industry would be perfect for.
One of the biggest challenge is enormous amount of subsidies that traditional farming receives and vertical farming generally does not. This makes it impossible to compete with price.
They just need to start growing weed
The BIGGEST advantage vertical farming has is vastly less water usage, vastly smaller land footprint, able to be in town/city to reduce from harvest to sale time and the ability to have 2 harvest cycles per yr, that 2 cycles and lower transit time should bring in more income.
Yep you are right in all of this. Now the question is, who will make this profitable enough and who has the best business model.
The problem seems to be that many (Most? All?) of these decided to grow inexpensive products with an expensive system that they also over-automated.
let me summarize u :D its unprofitable, energy cost too high
Close enough 👍
Energy prices are a huge factor. Right now one of the cheapest ways to get it is with solar panels, but converting sunlight into electricity into light is less efficient than planting crops in a field to get sunlight directly. Even if they're hydroponic and even if you only use the "ideal" wavelengths of light. So unless you can get electricity for a whole lot cheaper or can grow close enough to markets to reduce transportation costs to account for it, it will be very difficult to compete with horizontal agriculture (or hydroponics). I like the idea, but you need an energy source that is cheaper than solar (which may be possible in some places with hydropower and geothermal, but not everywhere).
Did it occur to these failing entrepreneurs to hire anyone with a background in agriculture?
::: Look at who’s chosen to run our gov’ts. Does the movie, “Idiocracy” ring a bell? We’re short on great minds, and even shorter on strong men.
I thought that this was some type of Minecraft farming method, but now I've learnt more about agriculture. Coolio!
I clicked on this video for the same reason xD
Thats bad because i got some shares of appharvest wich i bought fo one dollar😎
LMAO
Oh man that hurts...
I work in ag related business and I see this with many companies. They try to revolutionize the business by introducing automation and lots of real estate but fail to realize that the costs of maintaining this equipment is extremely expensive. Common items like HIMs can cost the business $5-12k. Motors go for several thousand and the drives are from $1800-$25000. It’s a serious commitment and they fail to realize that. Many companies were handed millions in loans these past years and spent it recklessly like a person who wins the lottery. Bankruptcies are coming fast
Vertical Farming and EVs is a scam
Like many highly funded startups, vertical farm businesses seem to have got caught up in the technology rather than the product/business plan/profitability models. For me the idea of converting long unused empty warehouses in/near Newark, NJ into these farms, creating new jobs, and providing high quality greens that don't need to be brought across country from CA, seems to be a great idea. Even the selection of greens make sense as they have a 3-5 week growing cycle, thus generating a potential of at least 12 turns per year on the same investment. However, getting into AI and letting the tech portion get out of control, to me, is what you get from individuals with limited experience and focus. Hopefully, those that survive this cycle will gleam enough business knowledge to survive and prosper through the future.
It sounds like they really need to focus on lowering costs by using traditional methods while raising quality. If they can consistently provide a more ripe and nutritionally dense product while avoiding the shipping costs then they should be able to compete, but then they lose out on being “high tech” which is what drew in the investors from the getgo.
You have a great point! In fact, only now are we seeing some first great examples of companies focusing on what really matters. Vertical farming has gone through some really tough times and only those who are willing to learn from the previous mistakes, are able to survive in the long-term.
One of the most successful farming startup I think is lufa. Its based in Montréal and instead of buying new building buildings to make vertical farms, it puts farms on top of warehouse. They have been very successful and starting a grocery service to sell more of there vegetables
Maybe it was never a good idea. Maybe it was never economically viable.
Maybe it’s a sector that’s super sensitive to wage and energy spikes.
When you’re competing with low paid imported farm workers, and highly subsidized agricultural companies, you’re going to have a bad time.
While mixed LEDs might look nice and someone might convince you they are a spectral substitute for sunlight, on closer inspection they are still very weak compared to the sun, often even in partial shade.
Imagine going for LIGHT DEPENDENT . Vertical farming has been a thing for over half a century with champinion mushrooms . My greatunkles and now unkles have been running a "vertikal " champinion farm for at least 30 years and had surprisingly little problems.
Introducing high lighting in a worse cashcrop is bound to fail.
2:10 cashflow =/= burn rate. Maybe it's your phrasing though, you could still be right if you meant they didn't have enough "negative burn rate"
Oh man how did I miss that 🤦♂️. I meant to say cashflow or runway.. thanks so much for spotting this - I'll see if there is a way to make a correction after the fact.
@@ArcticFarming Nice of you to reply. I might be a bit nitpicky there, probably the video can stay as is, people will understand.
I built an aeroponic cannabis system that was horizontal but could be “stacked” using pallet racking and catwalks. Spent a crap load of time and money to figure out that it’s too complicated and expensive. Just moving the plants around was a total headache. Vertical sounds great…in theory. I’ll never ever go that route again
If your "business" can't sustain itself without investment then it is a scam.
Or its managed by commies
As always, the environment is key. Power intensive vertical farms would perform better financially in areas where electricity costs are low.
Applying all this massively expensive infrastructure and energy demand to grow a lettuce, is the definition of insanity!
The problem is they went too high tech before fully developing and understanding the costs. South Korea is doing the same but their farms grow 20% every year with profit. Anyone who wants to do the farming needs to visit South Korea first to understand how they maximize profit for minimal cost.
topsoil must be replenished constantly, that is a lot harder with vertical farming.
Most vertical farms operate using hydroponic farming which is a purely water based system. These systems have no soil so this is not an issue 🙂
I can immediately see 3 problems with any and all vertical farming.
1: It is not cheap to pump and plumb the pipes to move and distribute water throughout the Vertical farming shelves.
There is a loss of pressure and flow rate the farther you get from the pump, and it takes a significant amount of energy to move the vast amount of water required throughout the facility which will force ingenuitive methods such as pumping the water to the top and then allowing gravity to pull it down through the piping to the plants with control valves to control how much the plants are watered.
2: Distribution of Grow Light and creating a high efficiency design to reduce lights per shelf and power draw by placement and distribution/direction of light to reach lower and lower trays.
3: Designing Optimal and longer term automation and crop rotation to reduce fertilizers and replacement of soil per each harvest, Even in these vertical farms crops MUST be rotated to avoid efficiency loss of growth from mineral depletion in the soil. It's not as simple as simply planting the same crop over and over again, As well is very difficult to automate accurately and keep tally of crops in the system. Requiring a lot of hardware to effectively do.
It is annoying to see random people try to do company startups in agriculture assuming it's something simple. It's not and irritatingly annoying to watch random people try.