Insights Into the Economic Viability of a New CEA System Producing Hydroponic Lettuce
Ilaslan, Gunes; White, Gerald B.; Langhans, Robert W.
A new CEA (Controlled Environment Agriculture) system growing Boston lettuce, Lactuca Sativa cv. ‘Vivaldi’, achieves the same quality and quantity of production every day of the year. The year-round constant quantity and quality production indicate potential for success. However, our research showed that out of nine selected U.S. locations with different climatic and economic conditions, the Northeast had 25.7 percent higher production costs for the same yield. The analysis indicated that given current prices and costs, CEA hydroponic lettuce production in northern climates such as Ithaca in upstate New York and Chicago is marginal to negative in terms of economic viability. As a result, the question arises about the future viability of CEA in areas such as upstate New York and New England where electricity costs are high and the climate is relatively cold. Many such areas are struggling with the future viability of agriculture. Thus, this study provides alternative ways to increase the economic viability of this new technology in the Northeast. The importance of local production, state level promotion programs and other potential incentives, and metro farm alternatives are examined. The analysis is applicable to other agricultural products produced in the Northeast at higher cost than in other locations in the southern and western United States.
Charles H. Dyson School of Applied Economics and Management, Cornell University