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Archi-ponics: Commercial Crop Selection

Written by Colin & Karen Archipley
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The key to a successful hydroponics business is knowing what crops to grow based on how much value they have in the marketplace.

Are you considering starting a hydroponic farm to grow food for local or wholesale markets? If your operation is well set up, from the hydroponic systems to the marketing of the product, hydroponic farms are not only great income producers, but are far more sustainable than virtually all other forms of crop production. Yes, there are considerable challenges to meet; the first is covering the start up costs of all the equipment. Another task is figuring the operating costs - the expenses involved with running pumps and lights. But, one of the most important questions to ask yourself, that very well may determine the long-term viability of your business is, “What kind of crops do I plan on producing?” You have to choose the crop that is right for your area.

We have seen many hydroponic farm products being sold at the local San Diego markets lately, primarily because in the area where we live, water and land are very expensive. Hydroponic growers also have an edge against their competitors because San Diego is very dedicated to the local farming community. However, most of the hydroponic crops that are offered tend to be “low-value” crops like lettuce and cut herbs. Two main reasons these crops don’t hold their value is that there are many large-scale field farmers who produce large amounts of these crops. The greater the supply, the less valuable the crop. Reason two is that these crops are relatively easy to grow and any crop that is easy to grow tends to have a lower value. It seems inevitable that the hydroponic farmers who are growing these low-value crops for the local markets will struggle to make it and very few will actually grow as a business.

The grower must evaluate the market and determine when certain crops have great value.

Your key to choosing the right crop is market research. The grower must evaluate the market and determine when certain crops have great value. Most crop values will fluctuate based on the time of the year. Bell peppers, for example, are less expensive in the summer when peppers are in season, then greatly increase in price in winter, when much of the U.S. supply comes from Holland or Israel. Obviously, the advantage of hydroponic farming is the ability for the grower (depending on his hydroponic systems and equipment) to produce crops out of season, targeting the higher market prices. However, keep in mind that although the grower can get more for his crop out-of-season, his expenses to grow the crop will increase since he may need to provide heat and light. That said, due to the efficiency of hydroponic systems, in most cases it is still more profitable to grow crops out-of-season than to compete with the large scale, in-season growers. Your answer will be in the math. A last word of advice: be realistic with your sales prices. Keep in mind that no matter how great you believe your crops are, consumers are only willing to spend so much on food items. So your pricing, even for out-of-season produce, needs to be competitive to ensure sales.