Virtually no aspect of indoor farming has caught the media’s attention like container farming. Stories of Kickstarters raising multimillion-dollar campaigns coupled with Millennials quitting their jobs and buying into container farms have created the perfect media narrative. In June of 2016, The Wall Street Journal went as far as to ask: “Are Shipping Containers the Future of Farming?”There are many benefits to having container farms as an indoor farming option and the practice has encouraged many new farmers to join the industry. As our friends at Bright Agrotech (now Plenty Ag) explain in the video above, container farms can have up to 30 times the productivity per square feet of a traditional farm. There are, however, several challenges they can create for farmers.
Number 5 – Scalability
While container farms can be a great entry point into indoor agriculture because of their low startup costs, scaling an operation into many farms into a campus can be illogical for some farmers. At a larger scale, bigger buildings like a warehouse or greenhouse can be cheaper and easier to manage.
Number 4 – Durability
Although this is not the case for newly created, self-contained units, durability and structural integrity can be a big challenge for container farming. With over 20 million shipping containers used per year, repurposing for sustainable farming seems like a great, environmentally friendly option. The challenge occurs when, by definition, used shipping containers are essentially at the end of their useful life. They are being sold because they can no longer be used by shippers to do what they were originally designed to do – ship products.
In addition to their age, they have lived a rough life. Over the years, they have been continually exposed to harsh and corrosive elements like sea water, road salt and intense UV rays. They have been moved from ships to trucks to stores and have been loaded and unloaded by crane off of boats at ports of call throughout the world.
Number 3 – Design
While the compact space of a shipping container makes a convenient small farm, the design inside a container can be a challenge. In addition to having confined areas that make it difficult to have more than a couple of people working at a time, you also face issues managing what makes plants thrive: airflow, heat and space.
Since there is an incentive to pack plants as tightly as possible, plants often do not receive the space or airflow that they require to allow for maximum crop size. In addition, the tight spaces can lead to issues with LED lighting heat and lighting logistics. If the lights are placed too close to the plants, they burn. If they are too far away, they don’t receive sufficient light for healthy growth and if they’re placed unevenly, you will get an inconsistent crop. Any additions to LED lighting can increase temperatures to levels that can be less than ideal for your plants.
Number 2 – Marketed Output vs. Actual Output
While you can grow an incredible amount of crops in a very small space, container farming has received criticism over the claims of exactly how much can be grown inside a container farm. Some suppliers have claimed very aggressive yields that may be difficult for farmers to recreate. Real-world outcomes can be very different based on many factors. These can include your crop mix, environmental conditions, growing choices, your local market and farmer experience.
Number 1 – Economics
One of the things that attracts a lot of farmers to container farming is the low fixed cost of entry. As we mentioned earlier, however, is although your fixed costs can be low, in an older shipping container, your variable costs to maintain the structure can be much higher than a newer structure. In a “low cost” scenario you can also run into a lot of hidden costs such as regulatory, compliance or insurance issues. For example, if your customers require evidence that crops have been grown in facilities suitable for food production, you may incur a substantial amount of added costs. Add in factors that can influence profitability like land prices, utility costs, and local crop market conditions, it can be incredibly difficult to accurately forecast how much profit you can expect from a container farm.
Based on our research, we estimate that fewer than half of container farms are profitable. Although it depends on the size and market niche, profitability may not be the sole focus of someone operating a container farm.
Up Next Week: 5 Benefits of Container Farming
Want to know more?
Don’t miss the 6th Annual Indoor Ag Con May 2nd and 3rd at the Las Vegas Convention Center. Make sure to catch the sessions “What Farm Structures Work Best for Indoor Grows?” with Brad McNamara, CEO of Freight Farms and “How Should We Go About Hiring for Our Indoor Farm?” with Tobias Peggs, CEO of Square Roots.
Want to show off your container farm technology? We have dedicated container farm pitches in our exhibition hall at the event, see more here.
Join Us at the 6th Annual Indoor Ag-Con on May 2-3, 2018
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