Some thoughts on vertical farming

The more I learn about the food system, the clearer it is to me that humanity needs a better one. In challenging times, it’s an extremely fragile system that leads to potentially horrible outcomes like the one I outlined above. In the best of times, it primarily grows 3 varieties of crops (corn, soy, wheat) and heavily relies on chemical inputs (fertilizers, herbicides) to function. 

The way industrial agriculture is done today – heavy tilling, lots of chemical fertilizers, focus on growing monocrops, etc – is incredibly harmful to the planet. Some statistics to drive home this point:

Not only does industrial agriculture have a LOT of negative externalities (like those above), but it’s not even working that well. Animal welfare under industrial agriculture is notoriously awful, cropland is drying out (and losing the ability to retain water), and the food we’re growing is less nutritious than 50 years ago.

We lose species diversity (both plants and animals) in a monocropping system. We lose billions of pounds of topsoil each year and flood our rivers, oceans, and drinking water with pesticides and herbicides. We eat food that’s less nutrient-dense, sold to us by farmers who are losing more and more of their land to desertification and forced to use more pesticides and fertilizers than ever. 

This system is also incredibly fragile: both to climate-related disruption and to global supply chain risks (as we’re now seeing with Russia). I suspect the next decade we’ll see an increasing focus on re-shoring our food supply and growing what we need to eat in the US. Does it really make sense that we incentivize farmers to grow soy, of which 48% is exported and much of the rest of it is turned into (toxic) soybean oil? 

One area that’s received a lot of attention (and investment – over $3B since 2020) is Controlled Environmental Agriculture (CEA): greenhouses, vertical farms, indoor farms, aquaponics, aeroponics, and the like. Many investors and policymakers are betting on this wave of companies to build the future of American agriculture. 

The ability to deliver local food that’s not as exposed to climate or global supply chain issues is a big one, especially from producers that can grow year-round in a controlled setting. CEA approaches also can be more efficient (1) in terms of higher yield, lower spoilage, less water usage, and less demand for transport. 

Though there are benefits, I suspect the impact of CEA will be far more limited than its proponents claim. Today, controlled systems have a higher environmental footprint than even conventional agriculture (2) due to their reliance on electricity use. They’re also incredibly expensive to stand up, as vertical farms often require $10M+ per acre in capital investment (3), and cost 1.5-2x more than a greenhouse to operate. These high operational and up-front costs make it unprofitable for vertical farms to grow anything but premium retail crops (microgreens, kale, etc). 

There are data points that CEA has a lot of room to grow (heh): after all, the tiny Netherlands is the 2nd largest exporter of agricultural goods in the world, thanks mostly to their highly optimized geothermal + hydroponic greenhouse setups. 

My hope is that we’ll see an increasing focus on regenerative agriculture for staple crops and animal agriculture, and CEA approaches for premium, year-round niche crops. I’m fascinated by what the future holds for our food system, and will continue exploring how we can build one that is better for people and better for the environment. 

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