In today’s Exponential Investor:
- 500 years for an inch
- We’ve gone out, now we go up
- The next pot stock?
Having recently written about vertical farming in Supercycle Profits, I reproduce the introduction from that publication today.
That is because, between the fires and floods, cold snaps and droughts, humans have a problem.
Crop yields can’t keep up with population growth.
The soils within which we grow food aren’t what they used to be.
Nor can they keep up with changing weather patterns or rapidly rising median incomes.
In the case of the latter, the wealthier we get, the more we seek out nutrient-dense food.
In the case of the former, traditional farming methods are at the whim of more frequent extreme weather events.
In fact, our entire modern food supply chain relies on three things: farming practices based on medieval weather patterns and fresh water.
But therein lies the problem.
Old weather patterns aren’t what they were. Climate instability is threatening today’s growing regions.
Continuous modern-day farming has destroyed not just the arable land, but the very soil in which we grow our food.
And future fresh water supplies for irrigation are in peril as populations grow and consume more.
Something must change…
500 years for an inch
Commercial agriculture as we know it began with the end of feudalism in the sixteenth century. Husbandry, manures, enclosures and mechanics transformed the family farm, leading to the birth of commercial production. These practices developed from the 1600s through to the 1800s and gave way to our current food supply chain.
The green revolution of the 1940s is why today’s fruit and vegetables look the way they do in shops. Everything we buy at the supermarket today, be it potatoes, cabbage, carrot, peas, corn, strawberries or melon, is rooted in agricultural practice where plants were selectively bred to ensure maximum crop yields.
Yet, only 38% of all land mass is suitable for agriculture. And, of this, just one third is for crop land. The remaining two thirds are paddocks for livestock.
Looked at another way, 12% of all surface land mass feeds the entire world.
Importantly, only 21% of this crop land is equipped with irrigation. That, in turn, means that close to 80% of the world’s grains are reliant on mother nature for water.
Agriculture is a delicate dance between humans and the Earth.
Some seeds sown too deep don’t grow at all. Some can’t be planted under the summer sun or their leaves will burn. Others need light rain and well-drained soil. Some crops need to be flooded for the plant to thrive.
And yet, the food we grow is slowing destroying the very stuff we must have to grow it.
Deforestation, water pollution, and over fertilising soil through constant agriculture are slowly obliterating the very medium we need to survive.
Soil doesn’t just grow food, either.
It stores water, nutrients and carbon dioxide.
Yet too much or not enough of either destroys the essential bacteria and fungi that live within it and naturally aid crop growth.
It takes 500 years for 2.5cm of topsoil to form under normal conditions, and yet almost 33% of the world’s arable load has been lost to erosion or pollution in the last 40 years.
Every grain, fruit, vegetable or form of protein you eat relies on soil that was moved through weather events that occurred when William Blake was alive…
… yet we’ve destroyed 30% of that land in the years since John Lennon died.
Let that sink in.
Strains are showing on current food systems. Crops are regularly destroyed by extreme weather events, disrupting not just a season but sometimes a generation of food production.
Pests are surviving the winter and coming back in larger numbers in the spring and summer, reducing crop yields.
Increasing geopolitical tensions means we can’t rely on once-friendly international supply chains.
And the soil area our food was once grown in is both rapidly shrinking and is losing the critical bacterial balance required to grow food.
This isn’t about food insecurity, rather the realities of synchronised events impacting what and how we eat…
We’ve gone out, now we go up
Our food is grown a long way from where it’s eaten. As a result, our fruit and vegetable crops are bred for longevity, not taste.
So, all your fruit and vegetables bought from the supermarket have been selectively produced to survive long distances and cold storage, rather than preserve flavour.
This is why home-grown food tastes so much better. Produce grown at home or your local farm is fresh, and the sugars haven’t yet converted to starch.
More to the point, modern farming practices are struggling to keep production steady against inclement weather, rising fertiliser costs and soil degradation.
Today we sit on the precipice of the next transition in farming.
Rather than food grown in fields stretching for miles across the horizon, the next agricultural revolution will see food grow “up” in a practice called vertical farming.
Vertical farming allows hundreds of acres of crops to grow on a single acre of land, but upwards instead of across.
Traditional crops versus vertical farming
Source: Stock photo; Jones Food Company
Rather than being at the whim of the elements, vertical farming is about growing food in a controlled ecosystem. All designed to yield more food, more often, and giving consumers access to freshly picked produced.
Think of vertical farming as apartment buildings. By building higher, more people can live in one space. Well, it’s the same for vertical farming: building up high to fit more produce in.
Rather than spread out across the land, seeds are sown into a tray, and then these trays forms rows of crops that are placed on top of each other from the floor to close to the ceiling.
One acre of a vertical farm equates to a minimum of 4-6 acres of outdoor farming.
It allows as much as 700 acres worth of food to be grown on a plot of land no bigger than a supermarket.
More to the point, vertical farming gives the “farmers” the ability to control the environment – something that it is almost impossible to do with outdoor farming.
Plus, the system allows for a vertical loop of completely closed and controlled conditions. LED lights replace sunshine, up to 95% less water is used for irrigation, and the water is recycled.
There is no need for pesticides, since the indoor space is free of bugs, and the plants don’t have to be washed because of the hygienic conditions within which the plants have been grown.
To boot, there can be more crops grown and harvested as farmers don’t have to rely on seasonal conditions. That is because of the constant growth cycle: more food can be grown in one year than on a traditional farm.
Vertical farming is highly unlikely to replace outdoor agriculture, but will much more likely complement it. Think of it as enhancing the food supply chain.
On Thursday, I’ll show you how vertical farming may be about to boom – in much the same way that “pot stocks” did in 2018.
Until next time,
Co-Editor, Exponential Investor