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Protected Cropping in the US and Mexico
While commonly known as controlled environment agriculture (CEA), vegetables and fruits grown in greenhouses or nurseries are called 'under protection' by the U.S. Department of Agriculture. The department conducts surveys every two years, then compiles the data making their reports public the following year. Not all produce is reported in each survey. Full statistics by crop under protection for the United States and Mexico may be found in the attached spreadsheet. The corresponding year of the data has been entered into column E. Data for eight vegetables and three fruits are provided for the United States. All vegetables with at least 70,000 square feet are included. Equipment costs per produce type is not reported by the U.S. Government and is not part of national surveys, making it unobtainable in the public domain. Publicly available data regarding the costs are discussed below. Likewise, data for equipment costs by product is unavailable for Mexico as is the number of protected agriculture growers.
Equipment & Operational Cost Data
- Cornell University estimated initial costs of greenhouse structures and environmental controls at between $30 to $50 per square foot. Common operation equipment includes seeding, irrigation, harvesting, refrigeration.
- The CEO of Gotham Greens reported his company is scheduled to open a 2,800-square-metre facility just outside Denver, Colorado, in 2021. The estimated cost: $70 million.
- Former CEO and investment banker Peter Tasgal calculated the cost of production for greenhouse operations at $2.33 per pound of production.
- He also reports "Per AmHydro, a leading consulting firm to the agriculture industry, it costs $31,244 per year to grow crops in a 2,880 square foot greenhouse, or $10.85 per square foot. Based on a 280,000 square foot greenhouse, the total cost to grow would be just over $3.0 million per year". BrightFarms raised $55 million a few years ago to build three greenhouses at an estimated cost of $18.3 million per 280,000 square foot greenhouse, each of which were estimated to grow 2 million pounds of greens annually.
- East Yorkshire based Cambridge HOK provides estimated capital expenditures and equipment costs depending on the size of the venture: "Up to 500sqm - costing from around £1,000-£1,200 per sqm: A vertical farm which is more reliant on manual labour for watering and harvesting rather than technology. 500sqm to 2,000sqm - costing from around £1,200-£1,750 per sqm (depending on level of technology): A warehouse style vertical farm which requires manual labour for sowing and harvesting. Watering and cultivation are automated to create a ready-to-eat product. 2,000sqm to 10,000m2 or more - costing from around £1,500-£2,000 per sqm (depending on level of technology): A fully-automated vertical farm (with more stacks) which uses the latest technology to automatically seed, feed and harvest the produce." They also explain that costs within the three levels vary depending on size, location, available energy source and final design.
- Pure Greens, a manufacture of hydroponic container farms in refrigerated shipping containers in Phoenix, states a "small vertical farms spend an average of $3.45 per square foot on energy while large vertical farms spend an average of $8.02 per square foot. Small farms are facilities smaller than 10,000 square feet."
- According to MarketsandMArkets Research, "on average, a 500 sq. ft. hydroponic farm can cost up to $110,000 for a base level system that is not fully automated."
Mexico
- Frequently cited, there are an estimated 25,000 hectares, or 250 million square meters were used for growing protected agriculture, reported in 2015, the latest data available from government sources.
- However, the Mexican Association of Protected Horticulture AC reported there were closer to 500 million square meters of protected agriculture in Mexico by the end of 2018. This data was also referenced in a report by Packer.
- A study conducted and published in 2019 calculated the total hectares of greenhouses and plastic nursery type agriculture to be 40,311 ha, or 403,110,000 square meters.
- Three types of greenhouse structures are used in Mexico: low technology, medium technology, and high technology.
- The Atlas Agroalimentario report detailed 78% of protected agriculture structures in Mexico are considered medium-high, a degree more technical than medium level, and operate with a range of climate control, automated irrigation, ventilation control or intelligent controls. 16% are considered medium level, and 6% are very basic structures.
- The operational cost including initial equipment was estimated at approximately $45 per square meter for a typical protected agriculture structure in the country.
- Data regarding the amount of growers in protected agriculture in Mexico is not available in the public domain. The Food and Agriculture Organization of the United Nations explains, "Most farming in Mexico is done by family farmers, and over a quarter of family farmers are indigenous peoples." This tends to prohibit an accurate count of growers in the country.
Research Strategy
Information about paywall reports is included as they may provide information specific to controlled environment agriculture in the United States and Mexico, such as the Controlled Environment Agriculture Market Insights, Trends, Opportunity & Forecast published by Fast Market Research & Consulting. In addition, s2g Ventures published a report titled Growing Beyond the Hype: Controlled Environment Agriculture that is available by providing information. Data for the equipment costs by product was researched through primary government sources and reports as well as through third-party industry associations and expert articles. Research for Mexico was performed in both English and Spanish. The research analyst resides in an important agricultural region in Mexico and has personal ties and access to the industry. Full agricultural reports (here and here) are available from the government and are quite detailed. However, the data they provide does not differentiate between open air and protected agriculture.