**St. Louis**: Recent research from UMSL reveals vertical farming’s economic obstacles despite its potential advantages. High operational costs, market dynamics, and limited crop diversity hinder growth, prompting a call for strategic enhancements to ensure sustainable scalability in the sector.
Vertical farming, once hailed as the promising solution to modern food production challenges, faces significant hurdles that threaten its scalability and profitability, as highlighted in recent research by a team from the University of Missouri-St. Louis (UMSL). The research underscores that while vertical farming has potential advantages, such as utilising urban spaces and minimising reliance on pesticides, fundamental economic barriers impede its growth.
Historically perceived as the future of agriculture, vertical farming employs innovative techniques such as hydroponics, aeroponics, and aquaponics to cultivate crops indoors, aiming to address issues such as climate change, diminishing farmland, and conventional agricultural pollution. By growing plants in high-rise environments under artificial lights, proponents argue that vertical farming can produce fresh food year-round while significantly reducing the use of water and harmful chemicals.
Despite attracting significant investment—$2.4 billion in 2022 alone—many vertical farming startups have failed to achieve sustainability. The primary obstacles cited are not technological deficiencies but rather economic constraints. “The harsh reality is that producing fresh vegetables or other crops on a vertical farm often costs much more than traditional farming methods,” stated Dr. Haitao Li, who leads the research team at UMSL’s Laboratory of Advanced Supply Chain Analytics. He explained that the operational costs associated with artificial lighting, climate control, and automation systems are substantial to the point of being unsustainable for many ventures.
Additionally, market dynamics further complicate the situation. Vertical farms in the US frequently struggle to compete with traditional farming operations that benefit from lower production costs achieved through economies of scale. Consumers accustomed to lower prices often show reluctance to pay a premium for vertically farmed produce. This has resulted in many startups, including well-known names like AeroFarms, filing for bankruptcy due to unsustainable operational costs.
The research conducted by Dr. Li and his team aims to address the dual challenges of market demand and supply by proposing an integrated approach to site selection for vertical farms. They stress the necessity of balancing production capacities with market access, advocating for a more strategic supply chain design that factors in the unique dynamics of individual regions.
The study specifically focused on Missouri, identifying the St. Louis area as having significant potential for controlled environment agriculture. It concludes that a successful vertical farming model should include three main strategies: optimising production and resource management to reduce operating costs, building a strong brand identity to enhance market competitiveness, and ensuring that market expansion is coupled with cost and yield optimisation to maintain healthy profit margins.
European vertical farming enterprises, such as iFarm in Finland, are noted for their diversified crop production beyond veggies, venturing into fruits and staple crops, thus enhancing business resilience. Conversely, most US vertical farms primarily cultivate high-value leafy greens and herbs, which limits market potential.
As the research indicates, while the concept of vertical farming is still viable, the execution of its economic model requires re-evaluation and strategic enhancements. Stakeholders in the industry, along with policymakers and researchers, must collaborate to address these pressing economic and supply chain challenges to realign vertical farming as a sustainable pillar of modern agriculture. The ongoing endeavours at UMSL aim to transition vertical farming from an experimental phase into a viable, scalable solution for food production across the United States.
Source: Noah Wire Services