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Market potential and investment opportunities of high-tech greenhouse vegetable production in the USA

An exploratory study was conducted into the market potential of high-tech greenhouses in the Midwest and East Coast regions and the state of California in the United States (USA) and the investment opportunities for Dutch horticultural supply companies. Insight is given into the production, import and consumption of (fresh) fruit vegetable products in the US. It is estimated how large the high-tech greenhouse horticulture in the USA (in terms of acreage and investments) can theoretically have if the imports from Mexico and Canada are replaced by their own production. It is then indicated indicatively which investment opportunities this can provide to Dutch suppliers.

Primary outcomes
There is a clear potential for high-tech greenhouse vegetable production in the USA, provided that market requirements can be met. The most important aspect is entering into contracts with retailers. Preferred is a construction in which deliveries are made at fixed prices with defined product quality criteria. It is the combination of competitive prices and to be delivered services (designing, building and maintenance) which determines whether the Dutch greenhouse industry can benefit from the demand for greenhouse horticultural development in the USA.

The advantages of protected cultivation compared to outdoor production of vegetables are the mostly better product quality and higher input efficiencies of water, nutrients and crop protection agents (physical consumption related to level of yield). Moreover, protected cultivation is less dependent on the climate factor and ensures the delivery of products in time. Disadvantage of protected cultivation is the use of energy and related emission of CO2. This environmental impact can be reduced largely in different ways, but cannot be neglected.

The potential greenhouse area to substitute imports of fresh vegetables into the USA is calculated at 7,000-8,000 ha. This area corresponds with a total investment sum of USD 9,575-10,915m. A rough estimation is that Dutch greenhouse constructors could reach a share of 5-10% of this potential investment sum. This is 10-20 times higher than the current export of greenhouse materials to the USA.

Other outcomes
The benefits of greenhouse production of vegetables in the USA also offer opportunities for export from the Netherlands of other horticulture input suppliers like seeds, fertilisers and crop protection agents (including biological control).

The estimated area of greenhouse horticulture establishments will provide 56.5-58.5m hours of employment, of which more than 90% for cultivation labour. The question is whether the required (unskilled and skilled) labour can be provided locally, regionally or nationally or whether labour migrants from other countries might be needed.

The opportunities for establishing high-tech greenhouses in the Midwest and East Coast region and the state of California depend on local and regional biophysical conditions such as climate, infrastructure (roads and resources) and distance to the markets. This might be worked out in more detail in a follow-up of this study, in which the feasibility can be determined more concrete.

No firm conclusions can be drawn, because the study is an exploration of the potential and opportunities. There are many (biophysical and social) factors that determine how the opportunities can be capitalized.

Method
The study is commissioned and financed by the Netherlands embassy in Washington, D.C. and the Netherlands Consulate in Chicago, the Netherlands Enterprise Agency and NL Works. An exploratory study has been conducted by Wageningen Economic Research on the perspectives of high-tech greenhouse horticulture in the USA and the opportunities for the Dutch horticultural industry. Recent data have been gathered from Dutch and American statistical sources and information has been collected from various reports and magazines.

Download the full study at www.agroberichtenbuitenland.nl


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