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> More traditional greenhouses already grow a large percentage of the tomatoes eaten in the United States, for example (most come from Mexico and Canada). In th
by legitster 4y ago
> More traditional greenhouses already grow a large percentage of the tomatoes eaten in the United States, for example (most come from Mexico and Canada). In the Netherlands, greenhouses grow nearly a million tons of tomatoes a year, along with other crops, making the country a major food exporter despite its tiny size.
It boggles my mind - the technology already exists and is profitable in the form of a hydroponic greenhouse. So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs. (The fact that there are investor decks out there pitching that energy costs could be offset by investments in solar panels is laughably hilarious.).
Even your average field farmer is no slouch. I was just having a conversation with our neighbor, an orchardist who manages over 200 acres of trees. He currently pays $60k a year in just in SaaS fees to cover all of the technology on his farm. Your average (productive) farm is already a miracle of modern automation.
- orangeoxidation 4y ago> So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs. (The fact that there are investor decks out there pitching that energy costs could be offset by investments in solar panels is laughably hilarious.). Some of those already existing greenhouses are using LEDs to augment natural sunlight. [0] So it doesn't seem too far fetched to me. The gamble wasn't to replace (free) sunlight with (paid) LEDs. The core idea is stacking farms on top each other, hoping the reduced land (area) requirement vs increased energy cost might pay off. Turns out land isn't that short, transportation not too expensive and energy not that cheap. [0] https://www.atlasobscura.com/articles/glowing-dutch-greenhouse-photos https://www.atlasobscura.com/articles/glowing-dutch-greenhou...
- mediaman 4y agoWhat's crazy is that all these variables were known ahead of time. What is the cost of real estate in rural upstate New York? It's really not that bad! (About $10k per acre, based on a brief search, for land about 280 miles away from Manhattan. A truck could make a delivery in six hours or so.) So why spend millions in capital expenditures on fancy stacked farms with high tech intense lighting, in order to cut a few tens of thousands of dollars in real estate costs? The argument was that logistics costs were high. That's kind of true if you're on the east coast, and your alternative is importing from Mexico or California. It's not true at all if you can get produce from a conventional hydroponic operation six hours away by truck. Moreover, it's not like conventional hydroponic operations didn't exist, and this was some sort of tail risk that was unexpected. The conventional hydroponic operations already existed! They've been in business for years. All the founders or investors had to do was drive a few hours to go visit them. Or pick up the phone.
- ilyt 4y ago> So why spend millions in capital expenditures on fancy stacked farms with high tech intense lighting, in order to cut a few tens of thousands of dollars in real estate costs? and ongoing maintenace. I'd imagine harvesting crops from flat piece of land is also cheaper than from vertical stack.
- linsomniac 4y agoHave you seen what a John Deer costs?!?
- roarcher 4y agoA few million, and it can farm thousands of acres. How much does one of these vertical farming facilities cost, and how much food does it produce compared to those thousands of acres? Then add the cost of replacing all the sunlight blocked out by the roof.
- quadrifoliate 4y ago> They've been in business for years. All the founders or investors had to do was drive a few hours to go visit them. Or pick up the phone. The aim for venture capitalists is necessarily to make risky, long-tail bets that have little chance of paying off; and that incumbents find too risky. Sure, this bubble has popped, but what success in this case might have looked like is grocery stores selling mass-produced microgreen salads (that can't be reasonably transported without bruising) which were grown upstairs. It's a reasonable criticism that VCs don't understand agriculture well enough to estimate the risk of "moonshot" style initiatives in that area. But criticizing them for "not picking up the phone and talking to existing operations" is kind of missing the point. Of course the existing operators are going to say it won't work.
- hef19898 4y agoIn the last decade or so, VCs have been less interested in finding the next Facebook or Apple or Google, but rather something they could sell as such. So they always seemed to fund the same kind of founder, the same great kind of vision for the future. They did so long enough to keep the lights on until an IPO, or SPAC as of late. Now that this route is basically dead, they seem to reevaluate their portfolios differently. And that might actually include the non-marketing side of the due dilligence nobody seems to have done so far.
- codeisawesome 4y agoCould it be the idea is simply way ahead of its time? Nuclear fusion could result in much cheaper energy, green hydrogen could bring down transportation costs, and human population ballooning to massive levels would drive up the value of usable land… but maybe all that is 30 years out.
- imtringued 4y agoElon Musk needs vertical farming on his utopian fusion powered Mars colony. Earthlings don't need it.
- yencabulator 4y agoIn a dystopian future, hydroponics etc can also function as a hedge against soil depletion.
- rasz 4y agoLight pollution from artificial tomato lightning can be a real problem https://finanse.wp.pl/wielka-luna-nad-wroclawiem-gigantyczne-szklarnie-widac-z-kilkudziesieciu-kilometrow-6354773543823489a https://finanse.wp.pl/wielka-luna-nad-wroclawiem-gigantyczne... https://pposiechnice.pl/?page_id=1002&lang=en#poznaj-nas https://pposiechnice.pl/?page_id=1002&lang=en#poznaj-nas using artificial light 18hour/day since ~2015.
- yencabulator 4y agoAs far as I understood, one of the questions asked was also can you increase the hours of light per day to get more rapid growth. Imagine plants with 22 hour grow periods vs 14.
- bombcar 4y agoThat's 300 dollars per acre in SaaS fees, and assuming it's standard apples, that runs out to a cent per apple tree (edit)
- TaylorAlexander 4y agoThis might make sense if each additional acre added high costs to the SaaS service but I question that. I wonder how much of this $60k/yr is just rent seeking to extract as much value from the land as possible.
- bombcar 4y agoYou'd have to know the "value add" and what it is saving, which I'm sure farmers have done. But it's not the case that you get zero apples (or whatever) without it, but maybe it increases yield or prevents total crop loss.
- TaylorAlexander 4y agoOh clearly the farmer thinks this is worth it, but then when the mob demands protection money that is worth it too. My question is, how much is this business twisting the farmer's arm, or more directly, how much of this cost is profit-seeking and how much of this is actual costs incurred. Because I am always curious what the opportunity for open source alternatives would be. If enough farms pay $5k/yr to developers to make stable software, and another $5k/yr to someone doing data management, perhaps they could save $50k per year in money going to some VC firm. I just don't like the way investment firms will design products specifically to extract profits from farmers (or anyone), and I am interested in the concept of software that has minimal overhead costs, so all possible profits flow to the users rather than up to the top of some hierarchy.
- ilyt 4y agoWell, it' niche (you don't have that many customers compared to normal software) that is also highly specialized, and that is never cheap. And it's not "a piece of software for 60k" but likely "a bunch of specialized pieces of software"
- andrewflnr 4y agoSolar seems... interesting, at least, as a way to move sunlight from places where agriculture is nonviable for other reasons to places where it is viable, or to where it's cheaper. I guess you could even surround a relatively small "vertical farm" in an inhospitable environment, e.g. currently useless arid land in the US midwest, with a crap ton of solar panels to make that small volume more hospitable, including lighting, air conditioning, etc. Granted, it still doesn't make a ton of sense for a farming company to invest in it directly, you'd want to hire it out.
- goda90 4y ago> currently useless arid land in the US midwest The US midwest is far from arid(except maybe the Dakotas). This is probably a confusion about what "midwest" means, since it is kind of a confusing term when you think about it. https://en.wikipedia.org/wiki/Midwestern_United_States https://en.wikipedia.org/wiki/Midwestern_United_States The real issue is the cold winters cutting into agriculture time, which is why there's a lot of grains and animal agriculture. Solar-pasture combos could power greenhouses that keep running through winter, but there's so much space that there's not much need for it to be vertical.
- andrewflnr 4y agoFair, I guess I was just thinking "West".
- Loughla 4y agoPeople who don't work with it legitimately do not understand the levels of automation and/or precision involved in large-scale (and medium scale) farms. The gentleman who rents our family farm owns or operates about 11k acres. He's a medium sized business. He's a family operation. And he precision farms to the square foot for most row-crop fields. Using thousands of data points from soil condition to weather to historical flood data to local highway traffic patterns. His machinery is (almost) automated. He exists as an emergency off switch, while the tractor and machinery farm to the square foot. They select seed varieties based on the data. Their planter can select any number of up to 20 different varieties based on the outputs of their soil equations, varies the depth, and distance of each individual seed, and plants to the square foot across thousands of acres. Chemical application is dialed in to accuracy within 6" squares. Fertilizer is applied so precisely that the soil generally remains unchanged at the end of the growing season; neither depleted or over fertilized. Animals - they have a breeding program for their cattle, with genetic testing and selection. The cattle are selected for specific genes. Not for traits. For genes. Actual genetics. They don't just breed that bull with these cows because the bull is taller in the back legs and the cows are heavy and short. They select actual genes to pass between generations, and specifically cultivate the genes they want to see. This blows my mind. And this is, again, a medium size business. HUGE agribusinesses take precision to a literal entirely new level. Inputs and outputs measured to the ounce over millions of tons produced. Most processes automated, with a human existing as a kill-switch. It's astounding.
- legitster 4y agoFamily farm operations astound me. The amount of things your average farmer has to understand astounds me - finance, labor management, investing, market conditions, futures, contract negotiation. And then on top of that, mastery of up-to-date farming technology. Even a modest 100 acre operation can be a multi-million dollar enterprise designed to eke out cents on the dollar.
- htag 4y agoThere is a massive difference between a 100 acre farm and a 11k acre farm. A 100 acre farm (producing generic commodity crops) won't have be able to afford fully modern equipment described higher in the comment chain. Even with mostly 20th century equipment you'll be surprised at the ratio of total assets to annual profit for a 100 acre farm. The numbers might be $3M-9M of assets for $100k-300k profit. The economies of scale conspire to push farms to consolidation. The equipment that increases productivity will receive higher usage rates, so capital investments are more efficient. If you have anything between 80-5000 acres you will clearly be better off liquidating everything and playing the markets. It'll be less work, safer, and more profitable. The family farm died in the dust bowl.
- inasio 4y agoSome of our local farms do corn mazes around Thanksgiving. You can see from above (done) that the mazes make Disney figures or cool patterns. A friend of mine showed me how they do it, it's basically a program that goes on the GPS in their tractor and controls how they plant corn over a few acres, completely automated.
- Mandatum 4y agoIf they do direct to customer that makes sense. If that’s just SAP fees, wow.
- ilyt 4y agoThat tech only seems to make sense if you're constrained for space, which literally isn't a problem to solve (yet). Water savings are the useful part, not the stacking.
- smileysteve 4y agoSpace, Water, Transportation, and small workforce. Alaska, Hawaii, Medium/Small island nations would be the target market for these; Where imports are expensive, the local soil grows no crops, and fresh water expensive. (especially if they are cold/dark or too hot for produce)
- ufo 4y agoOn the other hand, their energy is also more expensive...
- bluGill 4y agoWater savings are useful in CA. However the article makes it clear they were setting up all over - including in areas with plenty of water.
- 7952 4y agoIt could be quite refreshing to be in an industry where technology can give predictable improvement in profit. You increase yield by x% and that pays for the technology and generates a profit.
- roenxi 4y ago> So what you paid for as an investor was a bunch of R&D research on how to replace natural and free sunlight with LEDs. There is currently a hot war between the two countries with the largest nuclear weapons stockpiles. It is conceivable that the 3rd largest stockpile will get involved too. It is a good idea to be probing at what can be achieved without reliable sunlight.
- jareklupinski 4y ago> The company’s total revenue for the first three quarters of last year was $10 million, but most of that was used on up to $7 million in severance payments when it fired two executives. Farms also don't have boards...
- red-iron-pine 4y agoMost farms in the US are corporate, and absolutely have shareholders and boards. Many are publicly traded. here's a neat list: https://companiesmarketcap.com/agriculture/largest-companies-by-market-cap/ https://companiesmarketcap.com/agriculture/largest-companies... The era of the family farm ended 100 years ago.
- paganel 4y ago> hydroponic greenhouse. Unfortunately the tomatoes grown in there taste like, pardon my French, shit. Not particularly related to tech or to the article itself, but it deeply saddens me that we seem to have forgotten that food needs to be tasty, too.
- steveylang 4y agoMaybe the answer is to turn your indoor crops into juice packets, and charge customers $700 for a machine to squeeze the juice out of them.
- tonyarkles 4y agoThanks for that! I can’t think about the Juicero without thinking of this lovely video (warning: likely some NSFW language, depending on your W): https://www.youtube.com/watch?v=_Cp-BGQfpHQ https://www.youtube.com/watch?v=_Cp-BGQfpHQ
- Symmetry 4y agoA plant's ability to make sure of sunlight saturates at about half the brightness of full daylight and it only absorbs light in half the spectrum of sunlight so if you had magical 100% efficient solar panels and LEDs you could roughly quadruple the effective area you have under cultivation if you put solar panels on top then four layers of growing plants. But of course solar panels and LEDs are very far from perfectly efficient so yeah, you're better off with the greenhouse until we get cheap fusion power or something.
- whatshisface 4y agoThat is an interesting fact, but surely it would be more efficient to use mirrors or perhaps refraction to distribute the light.
- tectec 4y agoI don’t think you could use mirrors to change the wavelengths of light.
- imtringued 4y ago"A plants" isn't every plant. You have to be more precise than that because there are plenty of plants where this doesn't work.
- smileysteve 4y agoYou're missing the important part, the LEDs and Hydroponics theoretically reduce the inputs (80% less water is often a figure used) and time to market - grow lights potentially mean 4-5x as much grow time in the winter; but maybe < 2x in summer.
- iancmceachern 4y agoBut the power costs of the less and climate control overwhelm these benefits
- freeopinion 4y agoFarmers have always been at the forefront of tech. Well, ok, not all farmers. But in the history of tech and automation, it is usually farmers who lead the charge. Steam engines, electricity, pumps, spreadsheets, solar, big data, drones. You name it.
- sleton38234234 4y agoAnd yet, over 80% of the cost of food is the bringing it to market cost: everything from transportation, to permitting to marketing, etc. what you pay the farmer is just a small fraction. I think what's needed is a revolution in where food is produced and cheaper ways of bringing food to market.