Dan Albert's farm is far from traditional. There are no picturesque, rolling fields, no tractors tilling soil; there is no white farmhouse or red barn. For that matter, there is no soil, or sunlight.
The farm, Farmbox Greens, is inside a two-car garage behind Albert's Seattle home. It consists of 600 square feet of microgreens grown in vertically stacked trays beneath LED lights.
The ability to grow in such a small space is the result of hydroponics, a system in which a plant's roots sit in nutrient-rich water instead of soil.
Microgreens -- the first, tiny greens on plants like arugula, radishes and bok choy -- can go from seed to harvest in less than two weeks. That enables Farmbox Greens to compete on price against produce delivered from far away.
"We are fresher and our greens last 20 to 30 percent longer than those grown outside the area," said Albert, who co-owns the farm with his wife, Lindsay Sidlauskas.
It has revenue of under $500,000, but was profitable enough in 2014 that Albert quit his day job as a landscape architect to farm full time. He now has three employees and sells his greens to about 50 restaurants in the Seattle area, a grocery chain and four weekly farmers markets.
Consumer demand for locally grown food, and the decreasing price and improved efficiency of LED lighting is driving the creation of more so-called vertical farm startups, said Chris Higgins, editor of Urban Ag News, which follows this segment of farming.
Energy costs are still a significant barrier to success, making few vertical farms in the United States profitable. Those that are tend to be smaller ones.
They include City-Hydro, a farm built in a spare bedroom on the second floor of Larry and Zhanna Hountz's three-story row house in Baltimore. Larry Hountz came to urban farming out of necessity. After a serious car accident, he was unable to leave his house for two years and had trouble concentrating. He couldn't go back to his previous job as a digital security consultant.
"Zhanna had gone to the grocery store and bought some heirloom tomatoes. They were about $7 a pound," he said. "I thought, 'I could grow those.'"
He converted a 10-by-15-foot bedroom in their house into a vertical farm. He raises 80 varieties of microgreens that are sold to about a dozen restaurants.
Hountz said the farm generated about $120,000 in income and he did not plan to expand. "We want to keep it a mom-and-pop operation," he said.
Vertical farming uses no chemical pesticides and far less water and fertilizer than traditional farms, but energy costs can be high. Even the best LED lights have only a 50 percent efficiency rate, said Bruce Bugbee, a professor of crop physiology at Utah State University who studies controlled environment agriculture. That means half the electricity is converted to heat, not light.
"Transportation costs account for about 4 percent of the energy in the food system," Bugbee said. "The energy for electric lights is much greater than that."
The upshot is that indoor farming can produce as much as 20 times the amount of food per unit area as conventional outdoor farming, said Gene Giacomelli, the director of the Controlled Environment Agriculture Center and a professor in agricultural and biosystems engineering at the University of Arizona in Tucson. As these farms scale up, however, they will need more electricity, not just for lighting but to run equipment like pumps and fans, Giacomelli said.
Investment in food and agriculture technology startups was $4.6 billion in 2015, nearly double what it was in 2014, according to AgFunder, an online investment platform for the agricultural technology industry. And local foods generated $11.7 billion in sales in 2014, which is predicted to increase to $20.2 billion by 2019, according to the consumer market research firm Packaged Facts.
Edenworks, in New York, uses an aquaponic system, which allows plants and fish to be farmed at the same time, creating a self-regulating indoor ecosystem. Tilapia are grown in tanks, and their wastewater is pumped through a bioreactor where composting bacteria turn waste into fertilizer. Plants use the fertilized water to grow and then the water is returned -- minus the fertilizer -- to the fish tanks.
When the cost of LED lighting decreased, the company changed the greenhouse into a vertical, indoor stacked system, using shade cloth to block light and mimic a warehouse environment, said Jason Green, a co-founder and chief executive.
Edenworks, which is not profitable, has received $1.5 million in funding and intends to build a 10,000-square-foot vertical farm in a vacant New York warehouse, which is expected to open before year's end. Green said it is expected to produce 130,000 pounds of leafy greens and 50,000 pounds of fish annually.
Yet profitability can be elusive for aquaponic farming. According to a 2015 Department of Agriculture study on the economics of aquaponics, raising fish indoors is two to three times as expensive as raising them in open ponds.
Such setups are also labor-intensive, with multiple systems requiring constant monitoring, in addition to harvesting and packing. A peer-reviewed survey of commercial aquaponics operations conducted in 2013 found that fewer than one-third of farms were profitable in the previous year.
Still, Green and his competitors are optimistic about the future of vertical farming. David Rosenberg, the co-founder and chief executive of AeroFarms in Newark, N.J., said although his business was not profitable, he believed that would change when it got larger. "You really need economies of scale for this to work, to address a host of complexities," he said.
AeroFarms plans to build large vertical farms worldwide and has raised more than $70 million to fulfill its ambitions. The company grows leafy greens aeroponically -- by misting the roots with a cocktail of water, nutrients and oxygen. Rosenberg said his farm was 75 times as productive per square foot as a commercial field farm.
The company is building its next farm and global headquarters in a 70,000-square-foot former steel mill in Newark. It will be the largest indoor farm in the world, Rosenberg said.
SundayMonday Business on 07/04/2016