Apr 14, 2021
Editor’s note: The following information is derived from an interview Agritecture conducted with William Fournier, Montel’s Vertical Farming Research, and Development Expert.
Budgeting for your vertical farm is an intimidating task. While shaping the future of agriculture with farming vertically permits you endless control and optimization of plant growth, figuring out the economics to make your business breakeven is draining work. The list of ongoing and upfront costs for your business is constantly growing. Getting a headstart on the finances and planning ahead will help relieve some of this stress.
Upfront & Ongoing Costs
With more control over your crop’s growing conditions and environment comes a higher CAPEX. According to William Fournier, it’s best to choose a taller building to allow your business increased volume to work with. “Generally speaking, the cost is a little bit more expensive, but at the same time, you multiply your growing level inside so you pay less per square footage, and have a lower total footprint on the ground.” This saves you money in the long run because you don’t need to fret about buying multiple buildings, you can simply keep building upwards. William remarks that “you pay more for the building, but you pay less for the land used.”
After you have your growing space, you need to think about ongoing costs for your business to be successful. One of the biggest considerations here is the equipment. William recommends going with a racking system that will allow you multiple grow levels, and choosing LEDs for greater flexibility. He suggests that “when you go vertical, it's a bit counterproductive to go with traditional lighting because you lose space between your canopy and the light level, reducing your growing capacity, and increasing costs because you require more HVAC load capacity. For me, even though the upfront costs are greater, over time, it's more profitable.”
If you want to reduce your costs, when designing your farm, do your best to maximize space for a greater volume. This may simply mean having less division or rooms with doors. This is dependent on industry. For cannabis production, William explains that having less division means “less security, camera sensors, and door readers,” but on the flip side, having more doors is more expensive. So, in vertical farming, you constantly have to “balance out the ongoing costs of your operation, and figure out where you can optimize flow for your workers so that it’s more efficient.”
Overall, “your input cost is higher for the same footprint on the ground, because you’re growing on multiple levels”. However, with farming vertically, you also have to consider the need for more watering, more fertilizer, more lights, and more energy in general. Additionally, “there’s all the working equipment - the light, the ladders, the platform, and the tools that you're going to need to really maximize your volume for production.” However, even though there are more costs, “you produce more so the growing cost is reduced”.
Labor And Technology
When we compare a traditional building to a structure with multiple grow levels, we see that “workers are more efficiently utilized because they’re localized to one or two grow spaces.” Instead of needing to walk or bike across a grow space, the stacked grow levels allow for less travel time within the building and allow multiple people to work in different aisles.
Technology is the main challenge when it comes to vertical farming. William shares three key factors to consider: the racking system itself, the lighting used, and your HVAC equipment. “There’s a lot of effort, technique, and strategy involved in establishing a good air distribution in your facility given the greater volume you have to control.” William explains that “if it's not well distributed, your facility will be a nightmare to operate.” Something that can help here is having more sensors and more zones to track and control.
William suggests working “with an expert in that specific field to really plan your equipment and costs so that you have a strong idea of the ROI. Just like in architecture, you need to build out your project on paper before building. And you need the right experts to do that for your project.” On the manufacturing end, you need someone who knows how to operate and design your farm according to your needs. Rely on the industry-leader Montel to ensure that you have the best team supporting your mission.
Invest In Your Equipment
A huge hidden cost for growers is the depreciation of their equipment. When you spend so much to build a state-of-the-art vertical farm, you need it to last and make you profits.
Montel’s range of racking systems not only enable you to save space and maximize yield per cubic foot, they also stand the test of time.
In vertical farming, your LEDs are good to last at least five years. “In the traditional way of growing and lighting (like HPS), you need to change the bulb every year,” which can become a huge hassle depending on the size of your facility. Overall, vertical farming equipment may have a higher upfront cost for an entrepreneur, but “everything lasts longer in there,” so you’re really paying for at least five to ten years of produce, and you come out the other end with a higher profit.
Keeping Costs Down
When asked about keeping costs down so that customers don’t end up paying high price points for products, William responded that “it all starts with having a proper design, spending time on building a quality design, and finding the right equipment to keep your costs down. You really need to spend time thinking about your lighting technology and HVAC system, because those costs can go up really fast.”
You also need to invest in a really good irrigation strategy, “to ensure that you don't waste too much water and fertilizer.” Another factor to consider is your IPM or integrated pest management. “You cannot cut corners with your IPM because they’ll lead to production problems, eating your crops, and leaving you with a lower production.”
After equipment design and IPM, you need to build and improve your standard operation procedure, which essentially “reflects the reality of your workers, so that everything can be optimized.” Here, you need to find a proper balance in your procedure so that “everything is made with the right quality assurance vision, and at the same time, is still easy to maneuver, to compile data, and for your staff when they work.”
Not taking into account these enormous financial costs during the planning of your vertical farm can lead to endless problems for your business in the long-term. According to William, this list of costs never stops growing, so get a headstart and save yourself the trouble. Also pick trusted industry-leaders like Montel to ensure that you have the best team and the best equipment supporting your mission and securing your business’ future.
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