The business case of vertical farming (US)

Indoor vertical farming is seen as the future of agriculture, but there are plenty barriers. These are listed below
  • Tricky Economics: Current high capital and operating cost means a massive price gap in retail price of produce. Scaling up however, shows large cost savings. Examples from industry leader Aerofarms:
    • Organic kale average cost $4.99 / 500g vs $14.18 / 500g from vertical farming. 
    • A 9 ha operation as estimated start up capital costs of $4 mill (~ R54 000 000) and estimated annual energy costs of $ 300 000 (~ R 4 000 000) depending on region. Improving lighting tech drives down costs significantly.
    • Scaling up from 9 ha to 30 ha shows costs being cut by ~ 1/3. 
  • Internationally, there is an unproven demand for food grown indoors. In SA specifically, no commercial retail market for premium organic produce. 

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