Rabobank recently published its annual 'horticultural update' which tracks market developments and makes predictions. This time vertical farming in the Netherlands was one of the main focal points.
2018 has started well for horticulture and most sectors carried over the positive sentiment from 2017. Consumption of horticultural products is increasing and profitability is more than sufficient as a result.
On the other hand, the first quarter did show a decline in exports of ornamentals. There are also some possible threats to the market in the medium term. For example, there is still uncertainty about the impact of the Brexit negotiations and getting enough (seasonal) labor is becoming increasingly difficult. The discussion about ending the consumption of natural gas is also a factor.
Barometer
The average score of the Rabobank NL horticultural barometer in the second quarter of 2018 is good with 7.23. There are sectors that clearly stand out against this average. The prospects for soft fruit are good this year, the export figures for tree cultivation are rising and spring flower bulbs have sold well. On the other hand, mushroom companies with manual harvest and lily cultivation companies score lower. Tomato and bell pepper prices are also clearly lower in the first quarter of 2018.There are worries about the increasing employment problems for the medium term. This applies both to middle management and to qualified personnel for cultivation and harvesting. There is also an awareness that diseases and pests can strike at any time. The (looming) virus infection of cucumbers, the closure of a rose plant due to brown rot and the Xylella infestations of tree cultivation propagation material in Spain indicate how quickly issues can develop.
Innovation: vertical farming
A major breakthrough in vertical farming for standard production of fruit vegetables is not expected in the Netherlands in the next three years. However, developments are not standing still so this could change quickly.Possibilities for vertical farming in the Netherlands
Rabobank has researched the possibilities for vertical farming in the Netherlands. Due to the speed of developments, a time horizon of three years has been adopted. Right now, vertical farming is mainly developed for research purposes (breeding, light, cultivation methods). The knowledge can be applied to projects in other countries that are further ahead with vertical farming.
In addition, there are already opportunities for high-quality crop production with specific ingredients for the pharmaceutical and cosmetics industry. The advantages of supply reliability, product quality and process controllability then partly offset the relatively high cost of production.
Another application is in the production of food for specific niche markets, such as (top) restaurants and food with specific ingredients (vitamins). In these niche markets, paying a higher price for food is subordinate to the production method, quality and product characteristics.
A fourth option for vertical farming is larger companies with fully integrated production and sales in the chain. Because of their size and direct sales contracts with retail organizations, they can compensate for the higher costs. If the products also have a longer shelf life, this market could emerge further.
A final application is to make this cultivation method an integral part of the entire cultivation process in greenhouse horticulture. Greenhouse growers want the certainty of year-round uniform, high-quality starting material. Therefore, it is possible to consider vertical farming with propagation of starting material, extended cultivation and other applications.
Click here for the full report in Dutch.