Vertical Farming: Too Far Outside the Box?
Posted on 24 August 2009
The problem of food supplies for the world’s growing population is frequently cited whenever people talk about the problems of limited fossil fuels and climate change implications. An op-ed article in the today’s New York Times was too good to ignore: grow food inside densely populated cities using tall buildings, or vertical farming.
Could this be a new sector for cleantech investing? The author of the article, Dickson D. Despommier, a professor of public health at Columbia University, is the leading advocate of the idea and he gets to the concept of extreme urban farming by working through some strong, maybe hyperbolic assumptions. For example:
“What’s more, population increases will soon cause our farmers to run out of land. The amount of arable land per person decreased from about an acre in 1970 to roughly half an acre in 2000 and is projected to decline to about a third of an acre by 2050, according to the United Nations. With billions more people on the way, before we know it the traditional soil-based farming model developed over the last 12,000 years will no longer be a sustainable option.”
Graduate students in his “Medical Ecology” class have done a number of papers on the energy inputs and outputs and many other technical aspects of the idea, available at his web site, so we won’t wade into the population and food debate. What we find lacking appears to be an analysis of the economic viability of the idea.
Could hydroponic and aeroponic technologies make it more economic to grow crops in high-rise buildings than provide commercial office space?
Professor Despommier makes a claim that the economics would work when he says “I estimate that constructing a five-story farm, taking up one-eighth of a square city block, would cost $20 million to $30 million,”
For the return on investment, he cites this: “An actual indoor farm developed at Cornell University growing hydroponic lettuce was able to produce as many as 68 heads per square foot per year. At a retail price in New York of up to $2.50 a head for hydroponic lettuce, you can easily do the math and project profitability for other similar crops.”
We tried the math, and although it is indeed quite easy to do, it does not demonstrate profitability. $2.50 per head times 68 heads is $170 per square foot at the retail level. The farmer typically gets less than a third of the retail price. Let’s be generous and assume that the proximity of the vertical farm to the retail outlet saves on transportation costs and use one third as the ratio. $170/3 = $56 per square foot per year of revenue to the vertical farm. Maybe in the current depressed market one could find space in a NYC building for only $56 per square foot, especially considering that spectacular views would not be needed. But after rent expense, there is nothing left for any other costs associated with growing the lettuce.
While we sympathize with the issues around food quality, trade and availability, don’t expect to see the struggling commercial real estate sector turning to cash crops any time soon.
1 Response to Vertical Farming: Too Far Outside the Box?
Please add to your equation the multiplying effect of going vertical on each floor. Check out this system now operating and producing huge amounts of food for animals at a zoo in England: http://www.valcent.net
This system multiplies your income equation by a factor of 5 for a 10ft ceiling. It also reduces water consumption by a factor of 10 thanks to mist and drip techniques. They were awarded as one of Time Magazines’ Top 50 Innovations of 2009 and Robert Kennedy Jr. just joined their advisory board