Controlled Environment Agriculture: Farming for the Future?

May 2018

Key Points

  • Controlled environment agriculture (CEA) has expanded rapidly since the late 1990s as growers use strategically located grow houses to extend production seasons and achieve transportation efficiencies.
  • A few big growers control a large share of the CEA market in the U.S. Consolidation in the retail food industry will further enhance their market influence.
  • High costs of capital, labor, and knowledge are barriers to entry for new, or small, CEA operations. Many growers fail by not anticipating capital needs and not aligning scale to match sales.
  • CEA growers using hydroponic technology are realizing lucrative price premiums, and are benefiting from significantly higher crop yields and an extended growing season, compared to field-grown produce.
  • While risks are high for small producers, opportunities exist for those who capture price premiums in niche markets.

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