> More traditional greenhouses already grow a large percentage of the tomatoes eaten in the United States, for example (most come from Mexico and Canada). In the Netherlands, greenhouses grow nearly a million tons of tomatoes a year, along with other crops, making the country a major food exporter despite its tiny size.
It boggles my mind - the technology already exists and is profitable in the form of a hydroponic greenhouse. So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs. (The fact that there are investor decks out there pitching that energy costs could be offset by investments in solar panels is laughably hilarious.).
Even your average field farmer is no slouch. I was just having a conversation with our neighbor, an orchardist who manages over 200 acres of trees. He currently pays $60k a year in just in SaaS fees to cover all of the technology on his farm. Your average (productive) farm is already a miracle of modern automation.
People who don't work with it legitimately do not understand the levels of automation and/or precision involved in large-scale (and medium scale) farms.
The gentleman who rents our family farm owns or operates about 11k acres. He's a medium sized business. He's a family operation.
And he precision farms to the square foot for most row-crop fields. Using thousands of data points from soil condition to weather to historical flood data to local highway traffic patterns. His machinery is (almost) automated. He exists as an emergency off switch, while the tractor and machinery farm to the square foot. They select seed varieties based on the data. Their planter can select any number of up to 20 different varieties based on the outputs of their soil equations, varies the depth, and distance of each individual seed, and plants to the square foot across thousands of acres. Chemical application is dialed in to accuracy within 6" squares. Fertilizer is applied so precisely that the soil generally remains unchanged at the end of the growing season; neither depleted or over fertilized.
Animals - they have a breeding program for their cattle, with genetic testing and selection. The cattle are selected for specific genes. Not for traits. For genes. Actual genetics. They don't just breed that bull with these cows because the bull is taller in the back legs and the cows are heavy and short. They select actual genes to pass between generations, and specifically cultivate the genes they want to see. This blows my mind.
And this is, again, a medium size business. HUGE agribusinesses take precision to a literal entirely new level. Inputs and outputs measured to the ounce over millions of tons produced. Most processes automated, with a human existing as a kill-switch. It's astounding.
The amount of things your average farmer has to understand astounds me - finance, labor management, investing, market conditions, futures, contract negotiation. And then on top of that, mastery of up-to-date farming technology.
Even a modest 100 acre operation can be a multi-million dollar enterprise designed to eke out cents on the dollar.
There is a massive difference between a 100 acre farm and a 11k acre farm.
A 100 acre farm (producing generic commodity crops) won't have be able to afford fully modern equipment described higher in the comment chain. Even with mostly 20th century equipment you'll be surprised at the ratio of total assets to annual profit for a 100 acre farm. The numbers might be $3M-9M of assets for $100k-300k profit.
The economies of scale conspire to push farms to consolidation. The equipment that increases productivity will receive higher usage rates, so capital investments are more efficient. If you have anything between 80-5000 acres you will clearly be better off liquidating everything and playing the markets. It'll be less work, safer, and more profitable. The family farm died in the dust bowl.
The 580 acres we rent was enough for my grandfather to support a family of 10. Today, I could support my family of 3 with that many acres if I ran a show farm near an urban center. But as a working farm it is unfeasible to support a family.
It's sad. 500 acres used to be a decent sized operation. Now, 10k is a starting out size.
I'm going to slightly disagree with "it's sad" part; understanding it's unfortunate on local / personal scale, food getting cheaper is what allows all of us here at hacker news to do something else rather than cultivate food as primary preoccupation of majority of population :-/
I don't think food has gotten that much cheaper in the last 50 years. Don't believe the fake CPI. Just take the average hourly earnings and divide it by something like the big mac index or a basket of food commodities.
I did that. BLS CPI components which don't change much are available from 1988, some of them even longer.
In the 35 years since 1988:
- dairy has gotten 20% cheaper in terms of wages
- bakery/cereal products have stayed roughly flat vs wages (cheaper since the 90s but more expensive since the 70s)
- fruit/veg products have gotten 5% cheaper in terms of wages (though the same level as in the late 70s/early 80s)
- rice/pasta/cornmeal has gotten 15% cheaper in terms of wages
Caveat: Over time frames this long, average hourly wages don't mean like for like hourly wages for the same job... the number of low-paid "deliveroo driver/amazon delivery guy" low paid part time jobs has increased, pushing averages down. (I.e. things have gotten more expensive as measured by minimum wages, but things have gotten much cheaper as measured by the wages of a skilled professional.)
I ran the numbers average wages/big mac index.
And it was showing a decrease in cost untill about 2000 but ever since then the cost of the big mac index has increased in the US, relative to average wages. Not that we should be eating big macs, but it's supposed to take a variety of inputs into account.
Sure, so if I ignore the fake CPI, how do I do that? I can only easily find price of milk from 1995, not earlier; bread from 1980, somewhat dubious sources.
I'm assuming in most countries also, subsidies, formal/official cartels, price controls and other policy instruments would make it very hard to compare apples to apples.
If you don’t think the cost of farming has gone down in 100 years because of better tools, equipment, automation, irrigation, etc, I’m very surprised. You don’t need statistics. Just look at farm implements from 100 years ago.
It's less that it's got cheaper and more that people spend a smaller % of their income on food these days. In terms of personal budgeting it's Amdahl's law at play.
It all depends on your living style and how expensive the bare living is. I could hypothetically sustain a family of modest lifestyle (nowhere near poverty, but limited expensive entertainment and gadgets) at least 6 with 200 acres here in Europe. 10k acres would be a giga mega super big farm here, somewhere near 1000 acres people usually consider it exceptionally large and essentially just a business and not a traditional farm anymore.
Are you saying that it takes more land to support the same number of people? If so, why?
Edit: maybe I'm mixing up the meaning of support here. Do you mean support as in financial support through the farm's profit, or sustenance support, i.e. feeding the family from the farm?
The biggest factor is technology. The same capital can produce more food. I think that’s what you’re talking about but not really sure. It’s a good thing for everyone but the farmers. The cost of food is one of the few things that has significantly gone down relative to minimum wage in the US.
Supply has gone up more than demand. Profit margins have gone down.
Is there an issue with automation costs on a small farm or is it that margins are too low? Not sure if that’s a good opportunity for companies or startups to target.
It sounds like the problem is that the capital costs associated with automation don't scale down well. Fixed cost equipment like tractors don't scale down well to smaller farms. At a cost of several million dollars for equipment, if you only have low five figure of profit a year you're not going to be able to realistically make interest payments on the capital loan.
500 fully owned acres of grain production would net you several hundred thousands of dollars around here. If you can't support a family on that kind of income, I dare say you are doing something horribly wrong.
The math changes if you are carrying debt or renting, of course.
These folks were (are?) doing it on 1/10 of an acre - although that number comes with a caveat that I think they're getting a lot of compost and organic inputs from elsewhere. Plus they're in California growing under ideal weather conditions.
Well, they say they've donated 8 tonnes of food in a year - for 4 people, that's 5.5kg a day. Depending on raw weight VS serving - and at roughly 2.5 kcal/gram [?] - that sounds like it should be in the right ballpark?
This is only true if we are only talking commodity crops. But the average farm in the us is still only ~400 acres.
For food crops you can still do pretty well on a 100 acre farm. Berries/fruits/vegetables/etc. Especially if you live in a community with access to distribution for said crops.
I live in an area with a lot of food ag and it's not uncommon for farms of just a couple dozen acres to pay the bills.
> This is only true if we are only talking commodity crops. But the average farm in the us is still only ~400 acres.
This metric is misleading because of how it's calculated. Since you're weighting each farm equally, a 1M acre farm gets the same amount of weight as a 100 acre farm. Therefore, if in a country you have 100 acres of farmland in total, and the farm sizes are 90, 2, 1, 1, 1, 1, 1, 1, 1, 1, you'd end up with an "average" farm size of 10, but in reality most of the farmland is actually part of a megafarm.
425 is just the mean. The median is only like ~40 acres!
While, farm consolidation is a growing concern (pun very much intended), the current reality is that large mega-farms are still the minority. Family owned farms still account for 89% of all agricultural product in the US. 47% of production is coming from farms grossing less than $1 million annually.
Sure. My parents have a couple of acres of orchard on their property they pay someone to professionally manage. If they get $5k a year from it they are pretty happy.
There are also a lot of small farms that are run by teachers (works well with the summers off).
But I think you would find that anything over 50 acres in an area with distribution options (either close to a packer for that product or urban area) CAN be a full time job if you know what you are doing and are willing to work that hard.
Imagine a family that lives on 1/2 acre with two or three goats. The goats breed. The family sells a few kids each year. They are required to register their farm and tag each goat so that certain diseases can be tracked. Their children next door do the same.
The neighbor across the street farms 400 acres of crops. The average farm on their street is 134 acres. The first two families don't even consider themselves farmers.
Yup, over last ~25 years my dad (on ~10 hectare/25 acre of land, mix of fruits/vegetables/grains) went from "well off" to "barely getting by", to "just sell off land for housing development and get a normal job".
Kinda sad how the the government subsidizes farming in a way that basically small farmers don't have place in the market.
I helped out a guy from church once who had just switched over two acres to pumpkins. He said he netted 10k an acre that year selling them to local pumpkin patches with almost no work.
Good for him, but I highly doubt the "with almost no work" statement. And besides, having just an acre of pumpkins and noone to buy them can be hazardous. Specialty crops can offer good profits on good years if everything goes right (which usually requires a ton of work, though you can get lucky for a few years), but the risks are significantly higher even if you did everything right.
> The number of farms in the United States for 2021 is estimated at 2,012,050, down 6,950 farms from 2020. The number of farms increased in all sales classes except $1,000-$9,999, $100,000-$249,999, and $1,000,000 or more. In 2021, 51.0 percent of all farms had less than $10,000 in sales and 81.5 percent of all farms had less than $100,000 in sales. In 2021, 7.4 percent of all farms had sales of $500,000 or more.
That 51% with less than $10k sales suggests a lot of hobby farms.
Many of them are - because the land is long paid off (often been in the family for 100+ years). If you have to make payments (other than taxes) then you need a lot more land to extract a living wage.
Is it actually though? I haven't seen it admittedly, but stories like this make me doubt whether it's actually a realistic look at farming at all.
> 'Today they’re made in Germany but they still look Lambo-mad,' writes Clarkson, who turned his back on the tractor models recommended to him by other farmers to buy one. 'If an Aventador were to make love to a spaceship, this is what you’d end up with.'
> The result is huge, even by tractor standards, he admits: 'Every single farmer type who’s seen it says the same thing. ‘That,’ they intone with a rural tug on the flat cap, ‘is too big.’ But in my mind tractors are like penises. They cannot be too big.'
> His Lambo is so huge, in fact, that Clarkson had to build a new barn to house it in. And a new driveway, because it wouldn’t fit through the gates.
> Operating it requires great care for more reasons than just its proportions, Jeremy has discovered — due to the amount of torque generated by its straight-six turbodiesel engine (775 lb ft), fitting machinery to the back is a risky business.
> 'Not that I can attach anything to its rear end. It’s all heavy engineering back there and I just know that if I tried, you’d be reading about yet another farmer walking for four miles across his fields with his severed arm in a bag.'
> Therefore, Clarkson has been forced to hire someone to do that for him. All this together means that the Lamborghini has ended up costing a little bit more than the £40,000 he initially paid for it.
I wouldn't know enough about farming to judge the show even if I had watched it, but ultimately his job with the show is to create entertainment, not to accurately document the realities of a British farm, so I find it hard to believe he's managed to do that.
The Lambo tractor also has the wrong type of connection in the back (Brits use a different standard or something). He just bought the biggest one he could without thinking.
He does go in being The Clarkson, buffooning about and doing things the stupid way. But he does learn and begins to actually enjoy it during the show.
And he has Caleb, 20something a farmer who does call him on his buffoonery repeatedly.
A hundred acres being modest is still astounding to me. In India, the average is something like 6 acres. The vast majority of farming families have less than 20 acres. Of course, the differences in farming population (something like 700 million) vs land (maybe a third of the US?) make this make sense.
That sounds way more sophisticated than the reality is for the most farmers. Automation exists but usually it's mundane like "my tractor does some proprogrammed routine automatically when U-turn is required on the field while tilling", and even that is enough to get you into the high-tech farmer club.
To me this reads as everybody but the farmer has some skin in the game and is extracting their share out of the process and that farmers are completely locked in on vendors. I already know they are locked in on mech equipment, I assume the intelligence layer is the same thing.
Threes probably an argument that it increases the amount of food per square acre but my cynical take is it adds more profit margin and to the ever increasing cost of food production per unit of throughput.
This was not the situation as I understood it based on the conversation with the guy.
Most of the products he is paying for either a) reduce labor costs (like a cell based system that distributes pesticide) or b) reduces the risk of product loss (cherries being insanely delicate and sensitive to subtle changes in temperature and humidity).
Because he is paying for the products as-a-service, he really doesn't care about being locked in on the equipment so long as they pay for themselves.
Throughout the lifecyle. There is no irrigation beyond natural irrigation in my part of the country. They clay soil is pretty good at holding onto moisture. But they do factor is runoff. They also use the weather cycle to their advantage, and do not apply near rain events.
Many states now require normal irrigation runoff to be collected in a reservoir and reused. It's something like the first 2" of water, which covers normal irrigation and most rainfall.
> People who don't work with it legitimately do not understand the levels of automation and/or precision involved in large-scale (and medium scale) farms.
What I do not understand is why vegetables in the US taste like shit and cost 3x as much as in Eastern Europe (Poland, Bulgaria) where agro-automation is much less.
Having grown up eating wild strawberries, my rule of thumb is that anything artificially made to grow bigger and plumper still has at most the same amount of flavor as the original small wild plant.
> And he precision farms to the square foot for most row-crop fields. Using thousands of data points from soil condition to weather to historical flood data to local highway traffic patterns. His machinery...
Can anyone recommend or link any YouTube videos on this, I thought this sort of thing was still at the R&d phase, I would love to see an hour long video on a real operation at scale.
A "family farm" isn't just about ownership. It denotes a type of small owner-operator farm.
The GP has leased their land to someone else, so it's no longer their "family farm", and it isn't a "family" farm at all because it isn't run by the family that owns it, but by a corporation with 11k acres under cultivation. It's a big-Ag farm.
> So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs. (The fact that there are investor decks out there pitching that energy costs could be offset by investments in solar panels is laughably hilarious.).
Some of those already existing greenhouses are using LEDs to augment natural sunlight. [0]
So it doesn't seem too far fetched to me. The gamble wasn't to replace (free) sunlight with (paid) LEDs. The core idea is stacking farms on top each other, hoping the reduced land (area) requirement vs increased energy cost might pay off.
Turns out land isn't that short, transportation not too expensive and energy not that cheap.
What's crazy is that all these variables were known ahead of time.
What is the cost of real estate in rural upstate New York? It's really not that bad! (About $10k per acre, based on a brief search, for land about 280 miles away from Manhattan. A truck could make a delivery in six hours or so.)
So why spend millions in capital expenditures on fancy stacked farms with high tech intense lighting, in order to cut a few tens of thousands of dollars in real estate costs?
The argument was that logistics costs were high. That's kind of true if you're on the east coast, and your alternative is importing from Mexico or California.
It's not true at all if you can get produce from a conventional hydroponic operation six hours away by truck.
Moreover, it's not like conventional hydroponic operations didn't exist, and this was some sort of tail risk that was unexpected. The conventional hydroponic operations already existed! They've been in business for years. All the founders or investors had to do was drive a few hours to go visit them. Or pick up the phone.
> So why spend millions in capital expenditures on fancy stacked farms with high tech intense lighting, in order to cut a few tens of thousands of dollars in real estate costs?
and ongoing maintenace. I'd imagine harvesting crops from flat piece of land is also cheaper than from vertical stack.
A few million, and it can farm thousands of acres. How much does one of these vertical farming facilities cost, and how much food does it produce compared to those thousands of acres? Then add the cost of replacing all the sunlight blocked out by the roof.
> They've been in business for years. All the founders or investors had to do was drive a few hours to go visit them. Or pick up the phone.
The aim for venture capitalists is necessarily to make risky, long-tail bets that have little chance of paying off; and that incumbents find too risky.
Sure, this bubble has popped, but what success in this case might have looked like is grocery stores selling mass-produced microgreen salads (that can't be reasonably transported without bruising) which were grown upstairs.
It's a reasonable criticism that VCs don't understand agriculture well enough to estimate the risk of "moonshot" style initiatives in that area. But criticizing them for "not picking up the phone and talking to existing operations" is kind of missing the point. Of course the existing operators are going to say it won't work.
The reason for the long-tail bets being improbable is important, though!
If the reason is because it takes lots of capital, or because there are network effects (e.g., AirBnB, eBay), or because it's a winner takes all market, or some key piece of technology has to be proven out, then sure, shoot your shot, someone will get the bullseye and win the day and it'll be a cakewalk raising the next fund.
But if it's improbable because nobody wants it, that's not the same thing.
That's why a bet being improbable should not be the reason to invest in something.
A VC may look at a bet and say, "sure, the win condition is unlikely, but lots of people will want this, so if it wins, it's worth billions." And maybe they write a check.
But if another VC looks at a deal and says "it's not likely to work, and also, even in the optimistic case this is worse than existing solutions," then there is no market problem being solved. This second VC will likely be leaning more on their management fee than their carry to pay the mooring fees for their yacht.
And a phone call to that farmer would have told them that while microgreens don't ship well over very long distances, they do fine in climate controlled trucks over a couple hundred miles. Part of a VC's job is to de-risk investment decisions by validating key assumptions.
> But criticizing them for "not picking up the phone and talking to existing operations" is kind of missing the point. Of course the existing operators are going to say it won't work.
This is true but irrelevant. The important part is asking them why it won't work and then seeing if that's correct. VCs are supposed to invest in risky things, not futile things.
Of course, as with WeWork, there's a big gap between what VCs are supposed to do in terms of due diligence and what they actually do.
VCs had so much money that they couldn't do that work. They have to invest all that money someplace no matter what, even if a moment's thought would show it was a bad investment because they need to show a return on investment, and sitting on a lot of cash isn't showing a return.
This is one way the little guy can beat the market: you are allowed to sit out the market for obviously flawed things. Beware though, that thinking is also why many little guys didn't get rich on Amazon, Microsoft, Apple, Google, and the other big names that at one time looked like bad investments.
In the last decade or so, VCs have been less interested in finding the next Facebook or Apple or Google, but rather something they could sell as such. So they always seemed to fund the same kind of founder, the same great kind of vision for the future. They did so long enough to keep the lights on until an IPO, or SPAC as of late. Now that this route is basically dead, they seem to reevaluate their portfolios differently. And that might actually include the non-marketing side of the due dilligence nobody seems to have done so far.
Sure, risk profiles in a a high-interest rate environment function differently from those in a "here's some money at ~0% interest" one. And I wouldn't be surprised by ag-tech being off the table for a few years in portfolios due to the fact that it's not well understood by many VCs.
Existing clinical lab operators said that Theranos wouldn't work. And they were 100% correct.
Physicists and audio engineers said that UBeam wouldn't work. They were also correct.
If existing operators say that something won't work because it's too hard or because customers won't like it then they could be wrong. But if their statements are backed up by hard science and economics calculations then only a moron would disbelieve them.
Could it be the idea is simply way ahead of its time? Nuclear fusion could result in much cheaper energy, green hydrogen could bring down transportation costs, and human population ballooning to massive levels would drive up the value of usable land… but maybe all that is 30 years out.
As far as I understood, one of the questions asked was also can you increase the hours of light per day to get more rapid growth. Imagine plants with 22 hour grow periods vs 14.
A plant's ability to make sure of sunlight saturates at about half the brightness of full daylight and it only absorbs light in half the spectrum of sunlight so if you had magical 100% efficient solar panels and LEDs you could roughly quadruple the effective area you have under cultivation if you put solar panels on top then four layers of growing plants. But of course solar panels and LEDs are very far from perfectly efficient so yeah, you're better off with the greenhouse until we get cheap fusion power or something.
Thanks for that! I can’t think about the Juicero without thinking of this lovely video (warning: likely some NSFW language, depending on your W): https://www.youtube.com/watch?v=_Cp-BGQfpHQ
Solar seems... interesting, at least, as a way to move sunlight from places where agriculture is nonviable for other reasons to places where it is viable, or to where it's cheaper. I guess you could even surround a relatively small "vertical farm" in an inhospitable environment, e.g. currently useless arid land in the US midwest, with a crap ton of solar panels to make that small volume more hospitable, including lighting, air conditioning, etc. Granted, it still doesn't make a ton of sense for a farming company to invest in it directly, you'd want to hire it out.
The US midwest is far from arid(except maybe the Dakotas). This is probably a confusion about what "midwest" means, since it is kind of a confusing term when you think about it. https://en.wikipedia.org/wiki/Midwestern_United_States
The real issue is the cold winters cutting into agriculture time, which is why there's a lot of grains and animal agriculture. Solar-pasture combos could power greenhouses that keep running through winter, but there's so much space that there's not much need for it to be vertical.
Some of our local farms do corn mazes around Thanksgiving. You can see from above (done) that the mazes make Disney figures or cool patterns. A friend of mine showed me how they do it, it's basically a program that goes on the GPS in their tractor and controls how they plant corn over a few acres, completely automated.
Farmers have always been at the forefront of tech. Well, ok, not all farmers. But in the history of tech and automation, it is usually farmers who lead the charge.
Steam engines, electricity, pumps, spreadsheets, solar, big data, drones. You name it.
Mostly cherries in this case. For him, newer trees and varietals, so he was expecting to get something like $10k - $15k per acre.
It was actually impressive - for every tech product he used, he knew exactly how much ROI it gave him. Most recently he was excited about an anti-pest system he had just acquired that would detect certain species of bugs in a field and only spray when needed. $10/mo/acre and he was expecting to save ~$10k on pesticide + ~$30k on labor.
Yeah, farmers (the successful ones!) are really really good at tracking ROI in ways you wouldn't expect, and they know what is worth it and what isn't.
And if it is, they are willing, and able, to pay. After all, developing solutions for farmers is a good market frol ehat I hear. Trying to replace traditional farming so was only ever a way to blow away VC millions.
Yeah, it's one of those markets where you really do have to have the numbers when the treads hit the mud, if your thing costs a million bucks a year but results in even a small amount of profit that covers the cost, they'll be all there. But even if it's cheap, if it doesn't have that ROI you ain't gonna be selling it.
I feel a lot of software/Silicon Valley types do NOT expect that at all, given how hard it is to measure ROI normally.
There are a lot of farmers and they talk to each other. When something new comes out and they are not sure if this is an ROI a few of the farmers in the area will try it on a few of their fields. They will then have numbers.
Running experiments is easy, all farmers do at least a little: it is easy to plant one bag of seed somewhere and then in fall compare that bag to what they plant elsewhere. It only slightly more difficult to do that in a proper controlled scientific way. The only hard part is there are may months between starting the experiment and seeing results.
When something shows good results farmers tell each other. Not always, but they at least tell friends and things spread.
This might make sense if each additional acre added high costs to the SaaS service but I question that. I wonder how much of this $60k/yr is just rent seeking to extract as much value from the land as possible.
> And it's not "a piece of software for 60k" but likely "a bunch of specialized pieces of software"
Right but my question still stands, which is that I wonder how much of that total, summed from all the pieces, is rent seeking or profit extraction. AKA what is the markup on this and how much of it is going to pay high returns to VC firms.
I say this because I work in open source farming automation and I am particularly interested in lowering costs through open source.
You'd have to know the "value add" and what it is saving, which I'm sure farmers have done. But it's not the case that you get zero apples (or whatever) without it, but maybe it increases yield or prevents total crop loss.
Oh clearly the farmer thinks this is worth it, but then when the mob demands protection money that is worth it too. My question is, how much is this business twisting the farmer's arm, or more directly, how much of this cost is profit-seeking and how much of this is actual costs incurred. Because I am always curious what the opportunity for open source alternatives would be. If enough farms pay $5k/yr to developers to make stable software, and another $5k/yr to someone doing data management, perhaps they could save $50k per year in money going to some VC firm. I just don't like the way investment firms will design products specifically to extract profits from farmers (or anyone), and I am interested in the concept of software that has minimal overhead costs, so all possible profits flow to the users rather than up to the top of some hierarchy.
> The company’s total revenue for the first three quarters of last year was $10 million, but most of that was used on up to $7 million in severance payments when it fired two executives.
Space, Water, Transportation, and small workforce.
Alaska, Hawaii, Medium/Small island nations would be the target market for these; Where imports are expensive, the local soil grows no crops, and fresh water expensive. (especially if they are cold/dark or too hot for produce)
You're missing the important part, the LEDs and Hydroponics theoretically reduce the inputs (80% less water is often a figure used) and time to market - grow lights potentially mean 4-5x as much grow time in the winter; but maybe < 2x in summer.
> So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs.
There is currently a hot war between the two countries with the largest nuclear weapons stockpiles. It is conceivable that the 3rd largest stockpile will get involved too. It is a good idea to be probing at what can be achieved without reliable sunlight.
Unfortunately the tomatoes grown in there taste like, pardon my French, shit. Not particularly related to tech or to the article itself, but it deeply saddens me that we seem to have forgotten that food needs to be tasty, too.
And yet, over 80% of the cost of food is the bringing it to market cost: everything from transportation, to permitting to marketing, etc. what you pay the farmer is just a small fraction.
I think what's needed is a revolution in where food is produced and cheaper ways of bringing food to market.
It could be quite refreshing to be in an industry where technology can give predictable improvement in profit. You increase yield by x% and that pays for the technology and generates a profit.
Former AppHarvest employee (by acquisition). That place was an unqualified fuckshow. Not surprising they’re being sued for fraud.
“There are many reasons why they’re doing it, but one of the reasons is because they know that Silicon Valley investors won’t invest in a farm, but they’ll invest in a tech company,” says Henry Gordon-Smith, founder of Agritecture, a firm that consults on urban farming projects. “In reality, these companies overspend on R&D by crazy amounts, and then say, ‘Oh, shit, that didn’t work.'”
This could have been taken from internal communications almost verbatim. The CEO straight up cited my former employer’s acquisition was significantly motivated to position AppHarvest as a tech company, rather than an ag company, for the purpose of propping up the valuation.
I majored in Ag for my bachelors and can confirm that all the research at the time was pointing to that this is not a good idea. It is many times more energy inefficient that just growing things in soil.
Kinda like biofuels, sounds really cool, but in practice it just creates more waste then the alternatives.
Only time this actually works and makes money is for high end restaurants in massive metroplexes. They are willing to pay high dollar for extremely fresh lettuce. At one point the containers company was turning a decent profit in NYC. I’m assuming it didn’t scale like they were hoping.
Any project that "reuses" shipping containers is a big red flag for me. Used shipping containers are not actually particularly cheap and already have plenty of demand. And for the purpose of building or construction projects they provide next to no value.
Yeah. I got fascinated with tiny houses and vertical farms because I liked the potential modularity and transportability, but when you actually look into, you don't really need containerization (let alone actually reused shipping containers) at all. The houses, farms, whatever, are rarely transported anywhere. Instead you're left with 12 metal posts, and an aesthetic.
Yeah, I did the math at one point on using seacans for a few different projects and at least around here they weren’t at all competitive against stick-built structures. They’re easy to transport multi-modal. That’s what they’ve got going for them. If they didn’t need to be lifted by cranes and stacked, they could be cheaper (structurally weaker), but then they’d be useless for their intended use.
I do see them used a fair bit around here for job-site offices though, but that’s again using them roughly for their intended use: put it on an 18-wheeler, work out of it for a few months, and then pick it up and take it to the next place
When I was doing consulting, we did an innovation project with {{HUGE_RETAILER}} and {{MAJOR_RESEARCH_UNIVERSITY}}, researching the retailer's desire to do micro-vertical farming, which the university had put a bunch of research into and had a bunch of IP around. Only took a couple of weeks of reading the relevant dissertations and papers to figure out that the economics didn't, wouldn't, and couldn't make sense, even if the retailer could get a premium price on "just picked" produce (high-end mushrooms were the only place that cost, output, and price-per-pound made any sense). Absolutely shocked, not at all surprised that a bunch of VCs put funding into the concept.
Vertical farming or any kind of farming aimed at making the growing season much longer is going to largely be a play for high-end quality, of which I am not sure the market is nearly big enough to get Silicon Valley involved.
High-end restaurants 100% are willing to pay for access to better ingredients. Some individual consumers may be as well, but this market isn't huge.
Vertical farming would also need to be able to take on more than just greens.
> Vertical farming would also need to be able to take on more than just greens.
That's the thing. It really can't. Grains are very very cheap, and the price efficiency drops in relation to the water use. (i.e. more water efficient the crop, the less profitable the crop is.) This has been the case with hydroponics for at least 40 years now.
Re your last point: The article focuses on lettuce, but I'd associated these vertical farms with microgreens. I've never eaten one, but my understanding was the intent is to sell microgreens to high end restaurants at a high price, as you said. Otherwise, the lighting costs (compared to the sun) would make these unviable.
Some biofuels can be efficient to produce, especially oils for diesel engines. Some paths for producing ethanol for petrol engines can be efficient too, but that’s a bit harder.
It’s definitely often a scam to continue fossil fuel dependence, though.
Nope, just product for people rich enough to not care about fuel price to run their sportscars. Which is, well, a bit snobbish, but essentially no impact
And, well, so far there isn't really a non-fuel-based solution to powering planes so any less problematic fuel than oil-based ones is a plus, even if it isn't "green" but maybe just "neutral" or "much less negative".
It seems short sighted? Sure soil is abundant and water plentiful at the moment. Isn't part of the allure of perfecting indoor farming to be resilient to a future world hostile to agriculture. I would think of any big discoveries or inventions being worth it as a long term risk investment.
This movement will resprout when society is relegated to caves and submarines. Maybe fiber optic light instead of solar panels, or maybe a panel that captures the full spectrum of light and converting it to a subspectrum, thereby multiplying the available energy.
These kinds of trials would imho be better suited as large scale research projects ala Manhattan/Nasa type stuff than pure venture capital, 'recoup your investment in a decade' funded.
The idea we're going to run out of water is a James Bond movie, not reality.
Look at how productive China is compared to the US in growing calories. Then consider how little of China's land is fertile (12.6% arable vs 17.2% in the US).
China produces nearly 5x as many calories on 66% the arable land - nearly 6.7x more productive.
Then consider that India is FAR better suited for agriculture than the US, but is not considerably more productive.
We're not running out of food or water or solar radiation in our lifetimes.
We're not going to run out of water as in "there doesn't exist enough water on the planet to sustain the total population", but we're already running out of water in the sense of "there are places where the ground water is not replenished as quickly as it is being depleted by local industrial and consumer usage, and reservoirs are critically low". That there's plenty of water 5,000 miles away is only so helpful.
Sure we won't run out of water, the challenge is gonna come when weather patterns shift in a way that cause droughts on crop-bearing land or abnormal temperatures in key parts of the growing season. Some parts of the world may be in for some considerable pain in those scenarios.
We have a ton of easier to pick fruit between here and indoor hydroponic farming.
Indoor hydroponic farms also tend to focus on non-staple foods. If this was about surviving we'd be studying legumes and grains not cruciferous vegetables. It's just easier to overcharge for a cabbage than a bean.
Where I live it isn't. I live in a high mountain desert. We have rivers, but they have to be dammed. We have land, but not much soil -- it was washed away 12,000 years ago, then covered by volcanos (check out Craters of the Moon). Anyway, welcome to southern Idaho, our best crop is cows and milk.
What we do have is cheap electricity (dams, wind, and solar). I'm still not sure the economics work out, but large swaths of our land doesn't work for farming either.
Not without proper carbon taxing and land use taxing.
In a sane world, if vertical farming got even close to traditional farming without taxing in soil destruction, water table destruction, pesticide impacts, and habitat removal from nature, we'd transition rapidly to vertical farming.
How do you supply enough power to vertical farms without those same externalities? And then how green is it to build and run them? Considering all the equipment, infra and inputs. It is not like that stuff magically comes from thin air with vertical farming.
The biggest argument for vertical farms is that you'd be able to bring high-quality year around produce to more places. We do have most produce year around, but the quality of it varies wildly depending on the time of year. Most produce shipped from California and Mexico during growing off seasons is quite subpar.
But this is an argument for quality, of which people would have to be willing to pay a premium for. I could see high-end restaurants and others wiling to pay for this.
Greenhouses already extend the growing season. This would ideally be able to do that further.
True! But you can do some fun acts like using heat pumps in certain climates (the Netherlands, for example) to extend growing seasons or create them (if they don’t exist) all year long.
Alas there is a backlog of a century of emissions to handle. You know, externalizing costs on other people?
At this point we'll need active carbon capture not for neutrality, which is its own political boondoggle, but for actual active mitigation of some of the damage.
Dont worry, nothing like this will come to pass. Pollute away.
Nuclear power. I don't think there's any other alternative if you really wanted to grow anything other than "green water" (i.e. leafs like lettuce) for large portions of the planet.
Many of the inputs are reduced; You use the natural gas to make energy for LEDs to decrease your time to market by increasing sun. By circulating the water you save 80% of it.
what if I told you that to be actually sustainable at current population levels long term, we'd need to surrender 70% or more of currently used pastureland and farmland?
Oh wait, we aren't going to stay at current population levels. Still at least have, what, another 4-5 billion people to crank out before we allegedly plateau?
Wind power doesn't take up a lot of space, especially offshore. Solar? There's this thing called a desert.
People, we are in the midst of a mass extinction. We NEED that land for biodiversity. Mass extinctions occurred over long periods of time that enabled evolutionary adapatation to some degree. We're doing ours over the span of a thousand years. Most mass extinctions at least get to "experiment" will all Earth's land surface to find new adapted animals. We've taken a huge portion of the world's biodiverse and fertile lands and industrialized them.
Otherwise, yeah, we'll have vertical farms... in space, because we won't be on earth.
I guess you think solutions to traditional farming, which is unsustainable, will come out of THIN AIR.
That's suggesting vertical farming is desirable outcome where it really isn't under most constraints. "Just" moving to hydroponics gives you most of the benefits (less pesticide/water usage, higher yield per area) and with birth rates stagnating "just" converting some of current fields would free up the area for mode wild nature.
For some reason that part of the story crosses my mind every now and then. The factor of ingenuity requiring appropriate timing, how misfortunate can make otherwise good ideas seem terrible, how things which once seemed bizarre are commonplace today, etc. I really enjoyed that book.
Interviewed a couple of years ago at a vertical farming startup. All the usual talk about making the world a better place through technology (and machine learning for some reason). I asked where the electricity came from, turns out they were literally burning coal to grow some salad not very efficiently.
Hydroponic farms have been studied for decades, they are super optimized but they have their limits as well - see the 10 GBP bell peppers in supermarkets today. I would really like to know how the numbers look like when comparing traditional hydroponic with these hyper-local vertical farms.
Is this just a normal bubble popping, where out of 20 companies trying, 18 go out of business but the final 2 succeed and take over the market and will produce a bunch of profit over the next couple of decades? And if so, do we have an idea which companies?
Or is the very premise economically flawed, where it turns out it can't be profitable ever, at least not with current energy and produce prices? And if so, how did these startups get their models so wrong -- what did we learn that couldn't be foreseen?
Slightly off topic, but I saw this video [0] about a retired postal worker in Nebraska who grows citrus fruit in an ingeniously designed greenhouse heated with geothermal. (Not magma geothermal, but earth tubes geothermal that treats the ground as an infinite thermodynamic reservoir. Works in the same way as a refrigerator.) Can anyone here comment on if this could be done at scale? Could the economics be feasible?
Sure, you need to avoid frost in the greenhouse; which there is an insulation factor from the walls and glass; and that's only 37 degree f; a lot less than human habitable spaces.
Does it scale? Profitably, no, because transportation of oranges from California and Florida to Nebraska is currently quick and cheap.
The issue of temperature control is covered extensively in the video as are some economic concerns (he sells oranges at NE farmer's markets!). What I wonder is if this could be a viable business. Land and possibly water could be cheap in that part of the country. Energy costs are negligible due to the design. Of course, there would have to be a big upfront capital expenditure and some time to get something like this going.
It’s not that complicated, you can only easily grow calorie low food like lettuce in these conditions, and when energy prices rise it is no longer cost effective.
I wonder if those startups would have better luck by focusing on research and getting a contract from NASA or similar. On Earth vertical farms only make sense in very specific niches.
But, if you are not on Earth, then it becomes more interesting.
Research grants wouldn't rise to the crazy VC valuations though. Maybe that's why they don't bother.
It feels, to me anyway, that until the incentives are less about making a (short-term and relatively immediate) profit for a select and limited number of people/eintities and more about the long term health of the planet and its inhabitants, these endeavours will ultimately fail. Which is possibly a shame as we should pursue technical solutions to our challenges, along with economic and behavioural. It comes down to what we value - we, being the human population and independent of what we are instructed, coerced or manipulated to value.
I'm confused. This is an article purports to be about vertical farming, but then calls out AppHarvest -- a company building heavily automated (aquaponic?) traditional greenhouses.
There are at least a half-dozen AppHarvest-esque greenhouse companies, and they almost all have positive farm economics (positive EBITDA). Same is true for many of the greenhouse-based fruit & veg outfits.
The Netherlands is mentioned once with a link another article. If its greenhouse technology is so good, were there any viable innovations building upon their success? There seems to be a lot of informed, quality discussion by HNers, are any knowledge of the Netherlands situation?
It appears to me that Silicon Valley is unaware that there's such a thing as Food Valley. Which does exactly what you ask for.
Food Valley centers around the Dutch University of Wageningen, the pinnacle of agricultural research, teamed up with a network of innovative food companies and experts.
I've called out most of the vertical farming stories on HN because the numbers simply weren't there. The growing cost was simply too high even if you were growing the highest value crops possible to ever make a return for investors.
However if in the future the price of electricity becomes almost free then it may be possible. I grew up in the sixties when the nuclear power industry promised power, 'too cheap to meter'. We may see it from either geothermal or fusion in the next twenty five years and it will be a true game changer.
> if in the future the price of electricity becomes almost free
I think about this sometimes. If you could eventually throw a fusion reactor somewhere and build some crazy huge vertical farms around it, regulate their temperature with geothermal energy, maybe even produce your own nitrogen since the energy is so cheap and you're going to use a heap of the stuff, etc... You could probably make it cheaper, faster, and more efficient in the long term than regular farming. Outputs could be so fast, reliable, and high quality that over say, 25 years you'd never skip a beat due to environmental conditions (barring serious disasters), your automation investments would pay off like crazy, and your outputs would scale so much better than traditional farms that you'd outsell them significantly.
But that's an insane requirement. At this point it's like saying "Imagine if we had magic, and we could use it to make a business that's physically impossible at the moment". Cool, but... Why?
I wonder what the net efficiency of operating LED lighting from solar power would be. The obvious advantage of traditional farms is that some inputs, most notably light, are free. But if you consider solar panel efficiency, the cost of mining raw materials and manufacturing panels, LEDs, and power components, I wonder how much worse indoor farming is. Is it 10% efficient? 50% efficient?
With an solar cell with an infinite number of layers the maximum efficiency for normal sunlight is 68.7% to go from light->electricity[1]. Real cells don't have infinite numbers of layers, so conversion efficiency is around 25% for single-layer monocrystalline silicon cells. Those have a maximum possible efficiency of 32%.
Current LEDs are around 40-50% efficient. So 45% efficient LED * 25% efficient solar = about 12% total efficiency.
[1] A. De Vos & H. Pauwels (1981). "On the Thermodynamic Limit of Photovoltaic Energy Conversion". Appl. Phys. 25 (2): 119–125. Bibcode:1981ApPhy..25..119D. doi:10.1007/BF00901283. S2CID 119693148.
Thanks for the numbers on LED lighting. As a comparison, photosynthesis efficiency is about 5% [1]. One could at first think that 12% is better than 5%, but the plant still need to grow even with LED lighting.
The first step in the photosynthesis is the light absorption. The loss there is due to the limited light absorption (range 400 - 700nm). So maybe this step could be improved by using LED lighting dialled in to the range of the plant. The rest of the loss chain would remain mostly the same.
Doing the math with the wikipedia numbers
Plant growing in open field
===========================
0.53*0.7*0.76*0.32*0.6 = 0.05413632
==> 5.4%
Plant growing with LED lighting
===============================
Considering 100 % LED light absorption by the plant (which is an exaggerated hypothesis) and the 12% LED lighting efficiency
0.12*1.0*0.7*0.76*0.32*0.6 = 0.01225728
==> 1.2% efficiency
However, you also get the uplift in efficiency from the fact plants prefer certain wavelengths of light, and have nearly no use for others (eg. green). And LED's are good at producing certain wavelengths of light.
I think that's just because full spectrum LED's are cheaper because they're made in massive quantities for lighting homes and offices.
If you were designing a set of LED's purely for plant growth, and making them in sufficient quantities that you can design your own dopant concentrations etc, then you probably wouldn't end up with full spectrum LED's.
I wonder about using partial LEDs and also solar concentraters and fiber-optic light pipes. Design the building deliberately with a curved-window face like the building that melts cars [0], but capture and redirect the sunlight. Might even be better to use a mirror+pipe system than fiber optics often used in lightpipes. Done well, should cut the electricity bill massively
But, from the article, it seems like the biggest bill to be cut is the 7-figure executive salaries. They are obviously not worth it.
I thought about fiber optics too. The thing is, the square cube law hits vertical farms(it's even worse when they only collect sunlight at their roof). There's some wasted energy in standard farms (the spaces between plants) so I guess it's not as clear cut. But as soon as you start to stack layers it starts to become a problem.
I don't see this as damning for the concept of vertical farms. It sounds more like a damning of tech companies trying to pass themselves off as farming companies, riding the wave of venture capital money, and spending it all on in house tech stacks, bloated salaries, buildings, and solar panels without having a proper business plan to pay it all back
Why did these companies start with boring stuff like lettuce? The article says that indoor growing like this could allow growing delicate plants which don't travel well - why wouldn't they start with that?
Because lettuces has a short growing cycle. One of the best cases for artificial light is that it can be used in times when natural light is not enough. If you have a crop like lettuces, that you can only grow 2x per year and now you can grow 12x per year in the same space it's easier to make the case than something like garlic that can be in the ground up to 8-9 months. If you can only turn the 'ground' or pod over once/year just like normal than you're only getting the stacking, but you could just use shelves in a greenhouse then and skip most of the tech.
Strawberries are another good one, you can only double your production in beds with a 6 month growing cycle, (granted, you can stagger your growing cycles in an artificial environment).
An awful lot of small scale farming is about turning over the resources you have as fast as possible to put product on the market and that is the same for flat land farming and vertical farming.
It's not unlike other kinds of startups where you aim for an mvp maybe even a profitable mvp before you move on to the complex stuff for the big customers.
Lettuces is a small farming MVP regardless of the tech used for farming (vertical, greenhost, flatland).
in addition to the very good sibling comment: lettuce is also a cold-tolerant crop that can grow well at 50F, whereas other popular consumer produce like tomatoes or peppers require minimum soil temperatures of 75-85F for optimal growth. Managing that optimal growing environment gets costly quick.
Another important factor: lettuce grows uniformly, and the whole plant is harvested at once. There is no pollination required, no trellis-training for production vines, or fruiting bodies that must be plucked when ripe.
Lettuce is about as straightforward as you can get in terms of mass production.
All bubbles have something wasteful about them as they do not represent calculated risk-taking but rather a suspension of healthy skepticism that is driven by informational echo chambers, ultra-cheap money and other such degenerate macro phenomena. This leads to more widespread failures than what is warranted for a given quantum of risk because they are all copycat failures.
It will be interesting to see which of the countless tech-related bubbles of the last decade will grow roots. Vertical farming is not the worst offender, hopefully something has been learned in the process.
Not surprised but this also misses some of the big wins of vertical farms - big increases in sustainability. Money is not everything - and if it can be profitable (even if it is less profitable than outside) it could potentially still make sense.
Realistically though I think this will not see bigger use until we actually get fusion power working and/or it becomes more useful on places like the Moon or in environments where there is far less natural sunlight (like very northern latitudes)
I don't think that's true for the VC-funded startups. I actually expect to hear that from the farmers I have known in my life. With the margins I saw, they were not in it for money. They would pride themselves in being self-sufficient, living off the land, and co-living with the nature. ABF -- Always Be Farming -- they say.
I have yet to see an actual environmental lifecycle analysis of these "disruptive" vertical farms. That amount of steel, precious metal, and plastic that goes into making a facility has high upfront Embodied Carbon. Can that really have a pay back compared to when you use the sun and the land? How many acres of land can you really replace with a farm on top of an abandoned parking lot?
What they say about vertical farms is way too rosy. They must compare their methods with borderline medieval farming techniques to calculate some 99% efficiency improvement. Farmers today care as much about biodiversity, ecology, and sustainability as anybody else, if not more.
Having spent some of my time in high school (in Nebraska) working in a greenhouse, I'm scratching my head trying to figure out the value proposition for most of these companies. I kind of wonder if this was all motivated by that movie "The Martian" where Matt Damon was growing potatoes on Mars with hydrazine.
"In theory, there are enormous benefits to indoor farms. They often use 90% less water than traditional farms; right now, most lettuce in the country is grown in drought-stricken California and Arizona. Growing inside can avoid outbreaks of E. coli and diseases like a plant virus that recently devastated lettuce grown in California’s Salinas Valley, pushing up prices. Indoor farming also eliminates pesticides and reduces fertilizer and keeps it out of rivers. Lettuce grown near Boston or New York City can avoid traveling thousands of miles from Western fields, saving gas and staying fresh longer. It’s possible to grow delicate, flavorful foods that otherwise wouldn’t survive a long trip through the supply chain. And as climate change makes extreme heat, drought, and flooding more likely, growing inside could become a necessity for some crops."
Are there examples of vertical farming facilities that are designed to use the natural sunlight when it is available? I'm imagining basically walls of well-placed mirrors. That would take care of quite a bit of the lighting costs, at least.
You need a lot of area for that - incident sunlight is proportional to land area. To get the same amount of sunlight, you'd need to cover around the same square footage of land as there is area in the vertical farm with mirrors, and then cleverly redirect that back into the vertical farm - kind of like a solar power tower.
What would be even cleverer is to just plant the crops where the sun falls in the first place, and just do one layer of crops directly in the soil already present in that location. This would obviate the need for the multi-story tower, mirrors, soil transportation, etc. A "non-vertical farm," if you will. I think it could be a real money spinner!
Instead of mirrors, I wonder if it would make sense to have greenhouses with artificial lights for winter and night. The original vertical farming idea was farms in buildings in the city. It has changed to focus on premium greens year round.
To solve the year round garden problem, it would be better to grow them in enhanced greenhouses. Then could use sunlight when available and LEDs the rest of the time for decrease in costs and increase in efficiency. There would be no improvement in land usage but even big cities have empty land nearby. I sort of think current vertical farming pivoted when original idea didn't work, but there is better way to do the pivot.
Usually the principle concern is temperature rather than sunlight, and the solution is greenhouses or similar structures.
These typically increase the growing season and permit crops to be started (e.g., seeding rooms or houses) or harvested before or after what would otherwise be a killing frost. With apparent increases in weather variability these might have increased applicability.
Low-Tech Magazine's Agriculture section includes numerous traditional such technologies.
Wait. You folks think they are investing it to grow lettuce or tomatoes?!
It is not. It is grow pot!
The reason they are folding is that it is taking too long to pass the legislation allowing it on both state and federal level. They were just too early.
How does pot change the economics? If it becomes legal, it will be cheaper to grow it in greenhouses just like its cheaper to grow lettuce in greenhouses.
By spending enormous amounts on tech, construction, energy and labour, we can free up agricultural land, which we already have enormous amounts of and has no actual value 99% of the time...
Farmers are absolutely devastating to local water quality. Green houses should be a lot more ecologically friendly than current farming practices but that seems more like a side benefit.
The idea that agricultural land is somehow reducing the supply of housing runs counter to common sense. By the time you reach any significant agricultural land near Toronto, for example, you're already so far away from the city that you're looking at a 1 hr commute during rush hour. If you work remotely, you can already live in Woodstock or London, Ontario and housing affordability is not as much of a problem for you either. The reason the agricultural land is not converted into housing is because there's little demand for it - not because it's essential to food production.
> The reason the agricultural land is not converted into housing is because there's little demand for it - not because it's essential to food production.
As an Ontario farmer located several hours from Toronto, I have had a seemingly endless line of people wanting to buy a small plot from my farmland on which to build themselves a home. The demand is there[1], but there is far too much red tape to make it happen. Furthermore, the price of food has been strong for the last decade or so which has sent the price of farmland sky high (up ~500% over the last 15 years), making housing on those lands more expensive. I would suggest that the price of housing in the cities has gone up exactly because it has become considerably more expensive to build out into the farmlands compared to earlier decades. When sprawl is too costly, that puts more pressure on existing city boundaries.
[1] Or at least was there. It is not clear if there is much lingering housing demand in Ontario as of the past few months. All reports I read indicate that people don't want to own homes anymore.
Oh believe me they want. they just can not afford it. In the 90's I easily bought house in Toronto and I did not need to have high income. Now it is nigh to impossible for majority of working people.
Housing in Toronto was affordable in the 90s because there was cheaper alternatives. Whether or not one preferred to live in Toronto is immaterial. What is significant is that there was an even more affordable choice to move to the edge of town, keeping pressure away from the core. Price is moderated by choice, after all.
In the 90s, a 100 acre farm here would have sold for around $100,000. Today, the same farm would sell for around $3 million. That is a substantial increase to acquiring the land and a cost that is burdened even if you choose to put a home on the land. This means that there isn't a cheap option outside of town to provide as an alternative like their historically was. And, thus, that puts more pressure on prices within the city.
There is unlimited land available for housing in the USA. The housing crisis stems from the fact that everyone wants to live in the same few square miles in every state. Converting agricultural land isn't going to fix the problem unless the farm is in downtown Manhattan.
Or solar panels to well run those vertical farms... The energy going into food has to come from somewhere. And I still don't believe the equation is net positive in natural vs. artificial light.
Finding housing 100 miles away in Farmville has never been a challenge. The problem is most people don't want to live 100 miles away in Farmville and commute that distance.
We actually should be building large towns in rural areas and linking them to real cities by high speed rail. That is what would be required to eliviate the housing crisis in urban areas. But that would require governments of various levels from federal to counties to work together, and for people to take a view more than 1 election cycle ahead etc.
If we did that, on a HUGE scale, we might use 0.1% of the farm land in question...
It was a stupid idea in the first place. In fact it's so mind-bendingly stupid that the classice British comedy show Brass Eye parodied it like 30 years ago.
In the emergence of new sectors backed by technology focused venture capital this scenario is to be expected though.
Often these bubbles are depicted as hype cycles, where you have inflated expectations of a particular technology, which show disappointing real world performance leading to a dip in confidence where ultimately a long term productive solution emerges.
Another way to think about this process is to take an evolutionary approach to technolgy development. Initially there's a lot variation of various firms trying to solve a particular problem, each with their own solution based on more or less novel technology. The issue is the selection phase where the technolgy competes in the real world and compete not only against other technological solutions but in a sociotechnical system including e.g. regional institutions such as local culture, regulations, politics, markets that are often aligned with the existing industry.
Ultimately one or a few solutions are retained and integrated into our collective infrastructure and provide a consistant solution to the original problem, and in a capitalistic model - profitable returns.
Multi-story vertical farming doesn't make much sense unless we're living underground after a thermonuclear exchange of some sort with wide implications.
What may make sense is enabling farming of locally out of season crops from "annuals". This already happens but it's not as cost competitive as importing from far-away (hemisphere away). Working on that makes more sense than trying to farm on multi-floor indoor facilities.
That's pretty glib, because when they built large greenhouses, people probably said "the market already solved this for high value goods like tomatoes: buy them from Italy and use a fast clipper to get them here in time".
Vertical farms probably indeed don't work out in the current day where we have sunlight, enough land to use it, and transport. Probably most careful analysis would have shown that, but, for things where the analysis has wide-enough error bars, when money is cheap enough, "the market" shows things don't work by incinerating gobs of investor cash and falling over. In the cheap-money era we just had, it was apparently a worthwhile gamble for some.
And if you're worth billions and get suckered by a chancer with a flashy pitch deck to invest in something that could have trivially been shown to be economically doomed by some random internet-commenter grousing, then honestly you deserved to lose the money.
The people building green houses did a real market analysis and saw that the glib analysis was wrong for their city - that is they could find a niche where they could sell for a profit. Many of them also started small to verify the niche really existed - selling a few from their backyard greenhouse, and when demand was proven to exist expanded.
Perhaps, but if you told me a vertical farm only worked at a scale above X thousands of square metres due to economies of scale, I'd find that quite plausible. So I can see why an investor might not wonder too hard why the scale is so large. On the other side, the dream-sellers have only until the writing on the wall becomes legible to extract the cash, so they can't mess around doing the HP garage thing for a decade.
Given the actual consistent result, it's still probably on the investors for being credulous marks with a case of techno-FOMO and high on their own supply, but I don't think it's always been necessarily so simple on the face of it to be debunked by a bunch of grouchy Internet contrarians in 31 seconds (though probably, again based on the result, was always debunkable by decent independent due-diligence).
After all, it's not hard to imagine a world where SpaceX is a smoking crater in 2015 and we're all going "well obviously you couldn't have landed a rocket, what did they think would happen?!". Another example: the jury's still out on if Uber's long bet on a pivot into self driving taxis can pay off before they bleed out, and you can find plenty of "obviously..." analyses saying they'd be dead or that they'd be the only transport in town by 2020. Neither of those could start in a niche, they were all-or-nothing. And those greenhouses that did start in a niche would have had huge attrition too, again, at the time, each probably seemed like a good plan to invest the family savings into.
It's not unthinkable, to me at least from the outside, that vertical farming had a chance of being a capital-intensive, high-barrier, high-payoff industry. In that I'd be surprised by it about as much as I was by SpaceX's technical payoff about 7 years ago: "huh, so that does work, crazy".
And all that said, if you're an investor who would rather gamble the money than spend a fraction of the promised returns on due diligence, then thanks for the trickle-down, I suppose. And probably just as well farming isn't about to end up in the hands of Farming Uber even faster than it already is becoming.
Sure, if you don't know anything about the topic. It sounds plausible that a big rock "falls faster" than a small rock as well. Which is why investors should do due diligence. What opportunity cost did the world lose out on because investors put money into schemes that a couple days of study could show can never work out? If nothing else that analysis should have revealed that it doesn't work without more efficient, low cost, solar panels and LEDs, and then pivot to those to see if there is any opportunity in either of those areas.
There are other things which make sense in greenhouses beside high value crops like MJ. Tomatoes as you mentioned, but also other fruits and vegetable that would taste better if they were bought close to the day they were picked.
However, instead of trying for vertical though could have worked on improving how to grow things in greenhouses at higher latitudes more economically efficiently and maybe expanding the available crops through specialization.
Also, if transport is really the big concern, shouldn't we work on optimizing that? Multiple solutions, from automation, to electric vehicles in many ways or even trains. It is not like the cargo is that time sensitive and distances that big.
Transportation cost is far less a concern in agriculture than transportation time, and that really only for time-sensitive crops which cannot be feasibly frozen, refrigerated, or processed. The other exception is goods which are consumed in quantity but cannot be light-weighted, most notably fresh dairy. Previously this might have included eggs, but their production has been hugely upscaled (with corresponding problems evidence presently in the form of bird-flu pandemics, flock culls, and consequent high prices for eggs and poultry).
For bulk agricultural commodities, that is, staple grains, time-sensitivity is measured in months to years, and shipping is virtually a non-issue.
For anything that can survive freezing, once a cold-chain is established, there's similarly little issue. This includes a great deal of meat, including much of what's served as "fresh" or uncooked, such as restaurant sushi (salmon sushi is in fact flash-frozen then thawed, in large part to kill parasites). Some fish and shellfish is best consumed fresh, though much is not and may be frozen or otherwise preserved (e.g., canned or pickled fish).
Many non-frozen commodities can be refrigerated, notably apples and bananas, though there may be some cosmetic defects which occur, or mealiness for apples stored from the end of one harvest season to the beginning of the next.
Transport is most critical in fresh fruits and some vegetables, though there are frequently alternatives (with some slight decrease in texture, though usually not in nutrition which may in fact be superior to unfrozen alternatives). These are generally not staples, and most households or food-service organisations can make do with substitutes.
Much greater concerns for food generally are overall affordability, access, "food deserts" in which traditional grocery stores don't exist --- a problem previously largely applicable to blighted urban areas but not increasingly experienced in rural regions and some suburbs. This has also long been an issue with native communities such as reservations in the US and elsewhere. General nutritional balance is another issue, as is access to either food storage and preparation (particularly as housing becomes an increasingly fraught issue in more developed countries) or foodservice (commercial and noncommercial meal and food preparation).
Vertical farming is ... very much a solution in search of a problem. The challenges are interesting, I'll grant, but not especially relevant.
And largely, transportation pales relative to distribution, particularly in conjunction with other inequality factors.
As for meal prep, it's interesting to reflect that the concept of equipping every single residence with full food storage and preparation facilities is a recent development (20th century, often surprisingly late) even in much of the developed world, and is compounded by the tendency to both "nuclear family" and small household (1--2 members) residences. In the late 19th century, individual apartments would have lacked food-preparation with residents eating shared meals in rooming houses, restaurants, pubs, or at work, and many households were both multi-generational and included (and fed) a significant service class. There were exceptions, but the modern 1--4 person household in which multiple meals had to be prepped and served daily is quite modern.
Vertical farming makes sense when energy is cheaper than what we get from the sun. That will also unlock growing other crops than lettuce, for which energy is the biggest hurdle. The main value propositions are that we don't occupy land as we do with conventional farming and that automation is easier in a controlled setting.
IMHO, vertical farming is a part of the next wave of industrialisation together with real AI, space travel for the masses, etc. But this requires that we fix an energy sourcing problem and does it without externalities.
High latitudes where there sun might disappear for months. For example, in Iceland, geothermal powered greenhouses are quite successful. Geothermal is plentiful, and it's expensive to ship fresh produce to such a small island nation.
The word "when" indicates a future tense. This is limited, as you can hear from the other responses ridiculing this comment. However, it should probably be expected that this will happen in the future more broadly.
> Vertical farming makes sense when energy is cheaper than what we get from the sun
that's just part of it. Closer to the poles, away from the equator, there isn't enough sun to have a winter growing season. The energy, expense of transporting produce to those areas is another factor. Along with the flavor and quality benefits of harvesting when ripe instead of optimizing for transportation durability and presentation.
Historically the solution was canning the in-season produce and consuming that during winter months.
One of the advantages is that you can use power sources other than the sun in regions where it's not plentiful. Eg. geothermal in Iceland during winter. Or nuclear (either fission or fusion).
But sunlight is so cheap in general that those are really niche situations.
If climate change continues at pace, we're going to see larger and larger migrations away from the sunniest parts of the earth, as those sunny spots become too hot for humans to live.
That "if" is doing a lot of heavy lifting, but I think its up to it.
It boggles my mind - the technology already exists and is profitable in the form of a hydroponic greenhouse. So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs. (The fact that there are investor decks out there pitching that energy costs could be offset by investments in solar panels is laughably hilarious.).
Even your average field farmer is no slouch. I was just having a conversation with our neighbor, an orchardist who manages over 200 acres of trees. He currently pays $60k a year in just in SaaS fees to cover all of the technology on his farm. Your average (productive) farm is already a miracle of modern automation.