Delaware entrepreneurs start growing crops in water. Will hydroponic farms catch on?
Bill Jordan of Millsboro is an accidental farmer who's growing crops without soil.
“I was going to make alcohol from corn or peaches to supplement fuel when fuel prices got stupid,” Jordan recalled, but he quickly realized that was not profitable.
As part of his research, though, he saw that some hydroponic farms use what’s left of the corn or peaches from the alcohol-making process as a fertilizer.
“That’s what led me to it,” he said.
About 15 years ago when he lived in Maryland, he started taking courses on hydroponics and visiting hydroponic farms. He built his own greenhouse and supplemented his income by building greenhouses for others.
After moving to Delaware, he started Fresh Harvest Hydroponics in Millsboro, specializing in a variety of hydroponically-grown lettuces and herbs that are pesticide-free and herbicide-free.
The plants are raised in three climate-controlled greenhouses. The largest has the capacity to grow 50,000 heads of lettuce at one time.
Before the pandemic, he was selling to wholesalers like Sysco and Teddy Bear Fresh, along with Hocker’s grocery stores in Sussex County and restaurants like Fager’s Island in Ocean City, Maryland.
“COVID really hurt us,” Jordan said. “A lot of restaurants just are not buying. Right now, we’re just doing farmers markets and onsite sales, trying to keep our head above water.”
He and one employee are able to maintain the operation, but before the pandemic, the business had several other employees.
However, Jordan said hydroponics has been a profitable business.
“It’s done well for me. It cost me a certain amount to start, but I had it paid off in about a year,” he said. “If COVID ever lifts enough, if people aren’t scared to go back to restaurants, I’ll do pretty well.”
He’s convinced that the indoor crop is superior to field grown.
“Hydroponics can grow bigger, faster and healthier plants,” he said. “The taste is better. My basil is much stronger than field grown because it has the right nutrients every day. We test our water on a daily basis.”
Christel Folke is an applied agriculture instructor at the Owens Campus of Delaware Technical and Community College in Georgetown. She said while hydroponic start-up and maintenance costs are the main hurdles, the process has a long list of advantages.
“It’s a controlled environment. The grower has complete control of the lighting, heat, humidity, water and nutrients. A lot of diseases usually come from soil, but with hydroponics you eliminate most of that risk. You still have some pests and disease, but it is easier to control, and we use natural methods,” Folke said, speaking about the college’s hydroponic system.
Saving water is another plus because the water is targeted at the roots, with much less evaporation compared to overhead irrigation outdoors.
The plants have a longer shelf life, Jordan said. Some hydroponic growers like him sell plants with the roots.
“With the root system attached, lettuce can last two weeks or more,” he said. “The shelf life on hydroponics crushes anything else.”
Like with other greenhouse operations, farmers can grow year-round if they have heating and cooling systems.
Hydroponics is starting to attract more attention in Delaware.
‘Life-changing experience’ turns hobby to a business
In Dover, Doug Wood was a special education teacher in the Capital School District who started aquaponics as a hobby, raising fish to supply nutrient-rich water which is filtered and used to grow crops like lettuce.
“I was selling mainly to my fellow teachers. They really liked it and they said, ‘You should do this for real.’ Then I went through a life-changing event when I lost my mother to cancer, and I started thinking, ‘You only go around once,’ and decided to pursue it as a career,” Wood said.
He also wanted to help people eat a healthier diet in an effort to prevent cancer.
“I’ve always known we consume more chemicals, more man-made stuff, than we ever have," Wood said. "What really sparked me was trying to grow with no chemicals, no pesticides."
After attending a seminar at an aquaponics company, he decided to jump in, starting 302 Aquaponics with his wife, Katie.
With the help of another former teacher, Jomelle Bowen, who majored in plant science in college, they set up the two-part operation. One section is for fish tanks and water filtration systems, and the other is for dozens of shallow “table tanks” in which the lettuce floats in containers with the roots dangling in the water below.
No soil is used. A man-made, rock-like granular material is used to help anchor the roots.
After a little over a year in business, they now have almost 20,000 square feet in greenhouses. Together with 10 other employees, they harvest about 600 heads of lettuce a day, close to 220,000 per year, with the capacity to raise 350,000 heads per year, all in under a quarter acre.
“We are basically turning over nine crops per year,” Wood said.
They raise fish to supply the nutrients for the lettuce. The water the fish are in goes through several filtration steps and then is used to grow the plants. After the solids are filtered out, “good bacteria” are added to break down the fish waste that has dissolved in the water, creating a natural fertilizer in the water.
They raise tilapia, a tropical fish that grows well in the warmer temperatures inside the greenhouse.
Lettuce is the profitable crop. But those profits came after more of a challenge than he expected.
“When we first started production, it was three weeks before COVID struck. After that, our sales were a fourth of what they should’ve been,” he said. “We were giving a lot of [lettuce] away, to the Food Bank and shelters.”
So he went to farmers markets, locally-owned grocery stores and offered sales directly to customers for pickup at his farm or at a variety of locations throughout the state.
“I have a refrigerated delivery van. If I didn’t have that, I don’t know what I would have done,” he said. “A lot of people didn’t want to go in stores, but they would preorder and I’d deliver to them in my van.”
Business at restaurants started picking up as capacity restrictions eased, and schools reopened.
“Sales have done really well in the last four months,” Wood said.
He sells lettuce to restaurants, three school districts – Smyrna, Caesar Rodney and Colonial – and grocery stores like Janssen’s Market in Greenville and Hocker’s Supermarkets in Bethany Beach and Clarksville.
“My big market is at the beach with restaurants and independently-owned grocery stores,” he said.
So far, he hasn’t sold to wholesalers because the profits would be too small. But he thinks he’s on the ground floor of what could be a big business.
“Consumers are becoming much more aware of the product they’re buying, where it’s coming from, and they’re willing to pay a little more for a cleaner, more sustainable product,” he said.
Why isn’t it more widespread?
While the hydroponics business is starting to sprout in Delaware, there are some big operations in other states.
AppHarvest in Morehead, Kentucky began trading on the Nasdaq stock exchange Feb. 1. Already operating a 60-acre high-tech indoor facility, the company plans to use funds from the stock offering to build 12 more large-scale indoor farms. In February, the company broke its record by harvesting more than 120,000 pounds of tomatoes in a single day.
Another major operation is AeroFarms in Newark, New Jersey, with a 70,000 square-foot greenhouse in a former steel mill, a 30,000 square-foot growing space in a former paintball and laser tag arena and a 5,500 square-foot research and development farm in a former nightclub. The company reports it can grow more than 2 million pounds of produce a year.
AppHarvest and AeroFarms confirm the advantages of hydroponics: saving land, saving water, a year-round growing season and eliminating man-made pesticides and herbicides, opting for natural solutions.
However, the high start-up costs can be demonstrated in AppHarvest’s financial forecasts. It estimates 2021 net revenue of $21 million, but a loss of $41 million because of expenses which include building more indoor farming systems.
MORE AGRICULTURE NEWS:Rescued sheep and an FBI visit: All in a day's work at Delaware's WaterGirl farm
Another reason hydroponics hasn’t taken off: “Not every crop can be grown that way,” said Kellie Michaud, agriscience teacher at Smyrna High School. “It’s a niche.”
Some plants grow well when they’re constantly in water, but others don’t. Some are just too large to be practical in a greenhouse. Indoor farmers need crops that take up little space and reach maturity quickly.
Michaud said some of the best performers are lettuce, greens, herbs, tomatoes, peppers, celery and strawberries.
What could turn the tide?
Smyrna High agriscience teacher Keith Shane said scarcity of land could spur more hydroponic operations.
“If the state of Delaware continues at the rate of development we have seen, I could see hydroponics becoming a little bit more mainstream,” Shane said. “I don’t know if that future will be in our lifetime, but I honestly think it will be a niche – a pretty sustainable niche. I don’t see it going away.”
At Delaware Technical Community College in Georgetown, Dr. Daniele Kidd agrees.
“We’ve got to figure out how to feed the growing population,” said Kidd, the chair of the college’s applied agriculture department. “Other countries where land is scarce like Japan, they have skyscrapers that are basically indoor greenhouses.”
In Delaware, even with farm preservation programs, many farms have been sold to developers.
“It would be very difficult to start a farm in our area, to buy 50 acres,” Kidd said. “It would be expensive and might not make financial sense, but with hydroponics, you can make a living on three to four acres.”
Jordan, at Fresh Harvest Hydroponics, believes this system of farming will become much more widespread.
“There are tons of advantages to hydroponics, and they’re not making any more land,” he said.
Ben Mace covers real estate and business news. He can be reached at email@example.com.