By Chris Clayton
DTN Ag Policy Editor
NEWARK, N.J. (DTN) -- An experiment in modern agricultural economics is going on in a converted brewery warehouse that last housed a paintball gamer business in a working-class Newark neighborhood.
AeroFarms is trying to make indoor vertical farming economically viable in the repurposed 30,000-square-foot brewery facility where the farm operation is growing an array of small leafy greens the farm is selling as locally grown produce in the greater New York City market.
A Wall Street Journal article earlier this month on commercial urban farms cited challenges some of these startup companies have faced with some of them pulling back on efforts to build farms on city rooftops.
Yet AeroFarms is planning a major expansion. About a mile from its current facility, AeroFarms is reconfiguring and remodeling a 69,000-square-foot former steel mill into a new vertical farm that will house its headquarters as well. Once completed, AeroFarms states it will be the world's largest vertical farm. That facility would have the potential to grow roughly 2 million pounds of produce a year.
There are a limited number of commercial vertical farms across the country, but interest is growing. USDA funded a research publication on vertical farming by the National Center for Appropriate Technology that came out earlier this year. The report cited a dozen vertical farms across North America either in operation or under construction. The report highlighted "aeroponic" systems developed by NASA around which AeroFarms has built its operation. The system uses no soil and little water as lettuce or other leafy greens are grown in stacked trays under rows of LED lights.
The National Center for Appropriate Technology looked at pros and cons of vertical farming, pointed to the potential of continuous crop production, water conservation and elimination of herbicides and pesticides. The downsides are the capital costs, including building facilities, though most operations now are in converted empty warehouses or old industrial sites. Then there are high energy costs from the LED lights and power to keep the farm operating. Farmers also can be limited in the potential crops they can grow.
Through investors, government grants and loans, AeroFarms has received $70 million in financing to get the farm on solid ground. This would be akin to getting financing to buy 10,000 acres of quality farm ground selling for $7,000 an acre.
AeroFarms isn't profitable, but the company has a goal that each of its farms becomes cash-flow positive in its first year, said Marc Oshima, the company's chief marketing officer, confirming details reported initially in the Wall Street Journal article.
AeroFarms initially licensed its technology, but then opted to develop its own facilities and grow vegetables on its own. It's a capital-intensive system that also requires significant software and sensors for growing different varieties of produce and managing the growing conditions. Still, AeroFarms has an ambitious plan to develop 25 such farms over the next five years.
"We really think of ourselves as the Apple of farming in that sense," Oshima said.
Oshima told DTN on a tour of the farm that AeroFarms was the brainchild of David Rosenberg, the chief executive officer, and Ed Harwood, a former Cornell University professor and now AeroFarms' chief science officer. Rosenberg and Harwood got into vertical farming partially to address issues regarding fresh water while trying to create better access to healthier food.
"David wanted to have an impact on water and he wanted to have an impact on agriculture," Oshima said. "This is how you have economy of scale and bring the farm to consumers."
AeroFarms has had a working farm of some type in Newark for more than five years, but got funding to move into the old brewery last year. The farm also developed an early relationship with the Newark School District to both buy leafy greens and teach students about its operations and agriculture. "It's cool. Here in Newark we teach sixth-graders about how to be a farmer," Oshima said.
A key focus is on how to eliminate waste and track all aspects of the business' environmental footprint. Harwood developed the growing system that used a patented cloth made from recycled plastic. The result is growing greens with 95% less water, zero pesticides and no soil erosion.
"There are a lot of benefits to what we're doing because we're growing indoors," Oshima said. "You are probably going to be pretty hard pressed to find a farm with a chief science officer or a microbiologist on staff," Oshima said.
AeroFarms only grows up to 250 different varieties of leafy greens such as lettuces, spinach and kale. Such greens can take 30-45 days to grow outside but can be ready to harvest under the LED lights in 12-16 days from the time a bed of seeds is put under light.
"We can grow anything, but we focus specifically on short-stem leafy greens and herbs," Oshima said. "It allows us to ensure a high level of quality and consistency and replicate that year-round."
AeroFarms employs 65 people now, but will be scaling up with another 44 employees in the next several months once the new facility is complete. "These are year-round jobs, not seasonal," Oshima said. "We're talking ideal conditions. It's 70 degrees year-round, no pesticides being used so it's not dangerous."
One area where AeroFarms is having difficulty is reaching the consumer who demands a product labeled as organic. While consumer perception about organics revolves around not using any synthetic chemicals to grow the crop, USDA hasn't defined any rules regarding whether different types of indoor vertical farming would qualify under its organic standards. Thus, AeroFarms doesn't have that USDA-certified organic seal.
"We actually think we're really good stewards of the environment and of the soil in particular because we're allowing it to heal. There's no carbon release because we're not tilling. There are a lot of benefits to what we are doing because we are growing indoors," Oshima said. "It's something USDA would say they have not kept up with technology. We think that's a dialogue and designation that's going to evolve."
A spokesman for USDA said the National Organic Program has had a task force meeting since last fall to look at how hydroponic and aquaponics practices might align with USDA organic regulations. The task force is expected to release its recommendations this fall.
New Jersey Gov. Chris Christie toured AeroFarms' facility last month with local media, highlighting the economic development and job creation of the farm and its operations.
"There has been a lot of interest in what we are doing," Oshima said.
For a primer on vertical farming by the National Center for Appropriate Technology: https://attra.ncat.org/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
(AG/SK)
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