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Growing Wheat Indoors is Possible But is It Profitable?
Every Sunday, discover a free recap of the week from the world of indoor farming.
This edition is sponsored by AgriHub & AmplifiedAg.
Good morning readers, a new trial paving the way for new crop segments in the indoor farming sector, a number of reports have highlighted the dangers lying ahead for the vertical farming sector, new facilities, new partnerships, and a number of quarterly results for indoor farming stocks.
Here is a highlight of this week in indoor farming:
This Week’s Editorial
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This Week in Indoor Farming
A growing variety of "new" crops are developing as feasible market niches the sector could concentrate on, in addition to the usual leafy greens, berries, or aromatics that are frequently grown in indoor farming facilities. Now, one business shows how successfully wheat can be produced indoors.
Infarm said that it had successfully grown wheat on an indoor farm during the Food Systems Pavillion at COP 27, which it co-hosts, making it the first vertical farming business to take on staple crop production in a controlled setting. Outstanding results from the initial experiments allowed for a yield prediction of 11.7 Kg per m2 per year. This is predicted to be 117 tonnes per hectare per year, which is 26 times higher than yields from open-field farming. In a time when there is a wheat crisis caused by the current Russian-Ukrainian war and climate circumstances worsen the overall yield of wheat fields, this production is independent of external climatic variables and is therefore genuinely climate resilient.
Guy Galonska, CTO and co-founder of Infarm: ”To continue to feed the world’s growing population, we need to achieve higher crop yields which we have now proven to be possible for wheat through indoor, controlled environment agriculture. Our results are significant when compared to the average yield of outdoor wheat production, which is about 4.5 tonnes per hectare per year and heavily dependent on weather and seasons. We are confident that wheat can be grown successfully at scale indoors as a climate-resilient alternative. Our record yield could potentially be increased by a further 50% in the coming years using a combination of improved genetics, hardware, and optimized growth environments.”
Erez Galonska, CEO and co-founder of Infarm: “Being able to grow wheat indoors is a milestone for Infarm and of significant importance for global food security, as wheat is a calorie-dense but resource-intense crop that is a core component of diets worldwide. We started Infarm to find new ways of producing food to feed the world’s growing population and the results show that we are a big step closer to achieving this goal.”
Despite the improvements and the apparent enhancement in productivity compared to on-field, questions remain as to the profitability of growing such a crop.
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A number of reports published in recent days have outlined the dangers of capital-intensive models for the indoor farming sector. Because of their renowned power consumption and high energy needs, which make up the majority of their operating costs, vertical farms (OPEX). The high operating expenses of many vertical farms made it difficult for them to be profitable even before energy prices rose; substantial increases in the price of energy could spell the end for many of these farms. The economic and technological elements influencing this quickly expanding business are examined in the IDTechEx research "Vertical Farming 2022-2032."
In the short term, vertical farms will need to detach themselves from the price of gas by relying on renewable energy sources, according to IDTechEx research (Solar panels, local biomass boilers, and other sources). Later in the paper, it is mentioned that while using renewable energy may increase capital investment, it may ultimately result in lower operational expenditure.
The report for vertical farms lists energy consumption reduction as another crucial issue. One of the major energy-consuming technologies is LED, which has made great advancements over time but is approaching the theoretical limitations of progress.
“The architecture of current LED semiconductor chips is close to theoretical limits. That is not to say that energy usage cannot be lowered; an alternative approach, as used by Intelligent Growth Systems and Perfand LED, is to periodically modulate energy delivery to lights – as opposed to a constant energy supply. This potentially reduces the average energy consumption without affecting, or possibly even enhancing, crop growth.” mentions the report.
Considered to be in the "valley of death," where lowering expectations are induced by the necessity for major increases in investment, the vertical farming business as a result of rising energy prices. These could, however, also spur the creation of profitable sustainable business models within the sector.
It's possible that the high energy costs will last for a while, and during this time vertical farms will surely face significant difficulties. But this also offers a significant incentive for vertical farms to boost productivity. Indeed, the business for vertical farming may be forged in the coming years into one that might finally pose a serious threat to conventional agriculture.
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