by | Jul 25, 2022 | Ask The Experts

While indoor vertical farms allow farming entrepreneurs to grow multiple crops in a smaller footprint than traditional agriculture, to reduce vertical farm operating costs there are still short and long-term financial considerations that should be addressed when planning and operating your urban agriculture venture. The following are 11 recommendations to reduce operating expenses in your vertical farm:

1. Location

Of the advantages of indoor farming, finding the right location might be the most appetizing. Reducing food miles and bringing food security to urban environments is a sustainable farming method that everyone can support. But, before you make a commitment to your farm’s location, it is important to understand your business’ needs.

The following questions will all impact your business and its ability to generate a return on investment:

  • What are your town / city’s zoning regulations?
  • Where does your product go and how does it get there?
  • Can you get enough electricity (and other utilities) and how much does it cost?
  • What are the labor costs and regulations for your town / city?

2. Proper Spending

In Controlled Environment Agriculture (CEA), there is a correlation between your initial capital and eventual operational costs. Investment in technological advances can set your farm up with automation and machine learning, thereby increasing production and reducing labor requirements on tasks such as seeding, harvesting, or cleaning.

While cheaper options may seem more appealing, a higher priced farm will come with more support and warranties on equipment, such as lighting and irrigation. Cutting costs on these items can cost you more in the long run.

3. Cultivar Selection

Crop selection will impact your farm in more ways than one. There are pros and cons to whatever cultivars you choose. For example, crops with short growth cycles usually require less inputs and produce more product. Slower growing, high value crops (like saffron or cannabis) will fetch a higher price. Some crops occupy a greater footprint, reducing the amount of grow space available for use in the farm. And, perhaps most importantly, you must ensure there’s a market for the crops you select.

4. Offtake

When planning your business, offtake should be among the first places you begin. Ensuring there’s a market for your product is a crucial step in setting your farm up for success. This decision even influences what farming technology you buy and how you will be operating your business.

While your farming system will be able to produce a specific amount of crop each day / week regardless of season, you need to be aware that demand for your product can fluctuate throughout the year. This may be an opportunity for you to switch crops throughout the year, depending on the season. This approach should be considered at the beginning of development, so that your farming technology can support the transition.

5. Accurate Recipes

Every crop has its “happy place”, and ultimately, a perfect recipe. By ensuring that your crops have access to the proper nutrients and conditions to prosper, you can assure not only the highest quality of your crops, but also the largest yield.

Flowering recipes for crops like strawberries will require more phosphorus and potassium than a nutrient blend for leafy greens. Accurately dialing in recipes allows you to maximize your growing environment and in turn your revenue. 

6. Use Technology

In the 21st century, AI is drastically changing the lives of users around the globe. From self-driving cars to disease mapping, the uptake and analysis of information is paving the way for technological advances.

Farm technology is now supported by a plethora of data. This relationship allows smart technology to decipher when you can save energy on items – such as lightning and watering – while maintaining consistent yields, versus increasing those same parameters to optimize production. By investing in AI, you are ultimately investing in efficiency. Computer-driven data will allow you to modify your environment in the most economical way.

7. Predictive Farming

Rather than accounting for the weather and monitoring for watering needs, indoor farming allows you to streamline environmental controls to ensure crops are rarely stressed and receiving the optimal conditions. These processes lead to increased production and better performance.

With controls for each environmental factor, you can establish a consistent output and forecast most operational needs of your farm at any point. This allows you to kick production into overdrive.

8. Research and Development

New products are released regularly and introducing them to your farm can positively impact your operations. It is important to keep up-to-date with changes in the industry and compare product performance.

Unique nutrients that support certain biological processes, cultivars that grow dense with a small footprint or revolutionary tech that speeds up processes like seeding or packaging, can impact your farm in a positive way; allowing you to get more out of your technology investment.

9. Energy Expenditure 

One of the biggest challenges in indoor farming is overcoming energy costs. Exploring external energy sources – such as microgrids or solar power – can be an avenue for some farms to reduce dependency on municipal utilities and the costs associated with them.

10. Engage the experts

Because technology and knowledge go hand-in-hand when successfully managing an indoor farm, it is important to have both of these elements when getting started.

It is recommended that you make connections with experts in all facets of the indoor farming space. The earlier you can consult the better. Industry-specific experts can influence your choice of technology solution and ensure your purchase aligns with your farm’s business goals.

11. Loss prevention

In many aspects, maintaining a farm can be synonymous with managing an ecosystem. That means ensuring plants and organisms can successfully coexist in proper conditions.

From pest management to biosecurity, it is important to run your farm in the “cleanest” way possible to avoid losing crops or battling pests. Any hiccups in production means less revenue at the end of the year. Missing product deliveries can also affect your business relationships, which ultimately can impact offtake.

Summary

When determining how to reduce vertical farm operating costs it is important to consider the short and long-term financial commitments that can influence the performance of your facilities. From choosing a location to selecting the crops and technology for your vertical farm, each decision you make should be supported by in-depth research and proven performance in real-world applications. Most importantly, the choices you make must encourage and support the immediate and future business goals you have established for your vertical farming endeavor.

Contact us for information and expert insight into planning, building, and operating your vertical farm.