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A lot of indoor farms are closing because their businesses are struggling. So why are more being made?

CLEBURNE, Texas (AP) — Inside a bright greenhouse about an hour outside Dallas, workers wearing hairnets and gloves place plugs of lettuce and other greens into tiny plastic containers — hundreds of thousands of them — that are piled up to the ceiling. . After a few weeks, when the vegetables have grown to full size, they will be picked, packed and shipped to local shelves within 48 hours.

This is Eden Green Technology, one of the latest crop of indoor farming companies seeking their fortunes with green factories producing fresh produce year-round. The company operates two greenhouses and has plans for two more at its Cleburne campus, with indoor facilities meant to safeguard its share of the food supply from climate change while using less water and land.

But that’s only if this concept works. And players in the industry are betting big, even as rivals are faltering and failing. California-based Plenty Unlimited broke ground on a $300 million facility this summer, while Kroger announced it would expand its availability of vertically farmed produce. Meanwhile, two indoor farming companies that attracted strong startup funds – New Jersey’s AeroFarms and Kentucky’s AppHarvest – filed for bankruptcy reorganization. And Planted Detroit, a five-year-old company in Detroit, closed its doors this summer, with the CEO citing financial problems, just months after planning to open a second farm.

Aaron Fields focuses on growing produce in a managed vertical farm greenhouse at Eden Green Technology on August 29, 2023 in Cleburne, Texas. (AP Photo/LM Otero)

The industry churn doesn’t bother Eden Green grower Jacob Portillo, who directs the plant health team and oversees irrigation, nutrients and other factors related to crop needs.

“The truth is that other people are failing and other people are succeeding, it’s going to happen in any industry you go into, but especially for us, I think especially the more sustainable we become.” We’re trying to, I think, have equally durable competitors that we’re going to start winning,” he said.

Indoor farming brings indoor developments into what experts sometimes call “controlled environment agriculture”. There are different methods; Vertical farming often involves stacking produce from floor to ceiling with plants growing under artificial lights and in nutrient-rich water. Other growers are trying industrial-scale greenhouses, indoor beds of soil in huge warehouses, and specialized robots to mechanize parts of the farming process.

Advocates say growing crops indoors uses less water and land and allows food to be grown closer to consumers, saving on transportation. It is also a way to protect crops from increasing extreme conditions due to climate change. Companies often tout their products as free of pesticides, although they are not usually marketed as organic.

But skeptics question the sustainability of operations that may require energy-intensive artificial light. And they say paying for that light could make profitability impossible.

Tom Kimmerer, plant physiologist, poses for a portrait at Elmwood Stock Farm in Georgetown, Ky., on Tuesday, Aug. 15, 2023. (AP Photo/Joshua A. Bickel)

Mac Stone lifts a net to show rows of lettuce planted beneath the hoop house at Elmwood Stock Farm in Georgetown, Ky., Tuesday, Aug. 15, 2023. (AP Photo/Joshua A. Bickel)

Tom Kimmerer, a plant physiologist who teaches at the University of Kentucky, has tracked plant growth both outside and inside as he conducts his research. He said his first thought on vertical farm startups – particularly those relying heavily on artificial light – was, “Boy, this is a stupid idea” – primarily because of the high energy costs.

The industry has accepted those higher costs. Some companies are trying to push them down by relying on solar power, which they say also supports sustainability. Even those that rely heavily on artificial light that does not come from renewable energy say they can be profitable by producing large quantities year-round.

But Kimmerer believes there are better ways to provide food locally and extend the growing season outdoors. He pointed to the organic farmstand-oriented Elmwood Stock Farm outside Lexington, Kentucky, which can grow tomatoes and greens year-round using devices such as high tunnels, also known as hoop houses — greenhouse-like arches that Shelter crops while still partially exposed to the street.

Tomato plants grow inside a hoop house at Elmwood Stock Farm in Georgetown, Ky., on Tuesday, Aug. 15, 2023. (AP Photo/Joshua A. Bickel)

Small insects crawl on tomato plants at Elmwood Stock Farm in Georgetown, Que., on Tuesday, Aug. 15, 2023. (AP Photo/Joshua A. Bickel)

Lettuce grows in a field, Tuesday, Aug. 15, 2023, at Elmwood Stock Farm in Georgetown, Ky. (AP Photo/Joshua A. Bickel)

A worker stands in a lettuce field at Elmwood Stock Farm in Georgetown, Ky., on Tuesday, Aug. 15, 2023. (AP Photo/Joshua A. Bickel)

He believes investments toward new versions of indoor farming would be better spent on practical solutions like weeding robots for outdoor farmers or even climate solutions like subsidizing farmers to adopt regenerative practices. .

Cultivating indoors may solve some pest problems, but may create new ones. Without their natural outside predators, small organisms like aphids, thrips and spider mites can be very difficult to manage if not aggressively, said Hannah Burack, an ecologist who specializes in pest management at Michigan State University.

“If you’re creating the perfect environment for plants, in many cases, you’re also creating an ideal growth environment for their pests,” Burack said.

Indoor farming companies combat this by insisting on high hygiene; For example, Eden Green describes “laboratory conditions” on its website and says that staff closely monitor their greenhouses to catch any pests promptly. They also say that vertical farms actually require less pesticides than outdoor farms, leading to reduced environmental impacts.

Evan Lucas, an associate professor of construction management at Northern Michigan University who teaches students about proper infrastructure design for indoor farms, said he’s not worried about an ongoing shakeout. He said some companies are struggling to scale, with problems that come from launching in spaces that aren’t necessarily built specifically for indoor cultivation.

“My guess based on what’s happening is everyone saw the opportunity and started trying to do a lot very quickly,” Lucas said.

Eden Green Technology Chief Executive Officer Eddy Badrina poses for a photo at a greenhouse in Cleburne, Texas on August 29, 2023. (AP Photo/LM Otero)

Many companies say they are on the right track. Eden Green CEO Eddie Badrina says the company has found a way to rely mostly on natural light for its plants. Arama Kukutai, CEO of Plenti, said that the company’s lighting system is so efficient that the company can be profitable. And Soli Organic CEO Matt Ryan said growing in soil indoors gives the company a better product than growing in water.

Plenty received a significant vote of confidence last year when Walmart participated in a $400 million investment round, also aimed at bringing the company’s products into its stores.

But Curt Covington, senior director of institutional business at Americus Lending, a private investment manager and lender focusing on farmland, isn’t convinced that indoor farming operations can work — except in cases where large retailers and Greenhouses form teams, like Walmart and Bountiful, or where grants can be made as socially conscious venture capital for urban and vertical farming operations that benefit communities.

“Given the capital intensity of these types of businesses, it’s hard to be very profitable,” Covington said.

Workers use a lift to check production plants at a vertical farm greenhouse in Cleburne, Texas on August 29, 2023. (AP Photo/LM Otero)


Walling reported from Chicago and Georgetown, Kentucky. Associated Press journalist Joshua A. Bickel contributed from Georgetown.


Follow Melina Walling on X, formerly known as Twitter: @melinawalling.


Associated Press climate and environmental coverage receives support from several private foundations. See more about AP’s climate initiative here. AP is solely responsible for all content.


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