Glase Provides Analysis of CEA Market Growth To Industry Members

Glase Provides Analysis of CEA Market Growth To Industry Members

During GLASE’s Industry Talks series presentation, executive director Erico Mattos discussed changes to the CEA market based on USDA Census of Agriculture data.

By David Kuack

One of the benefits offered by the Greenhouse Lighting and Systems Engineering (GLASE) consortium to its industry members is its Industry Talks series. This series of informal conversations are presented by academics and field experts who focus on topics suggested by the consortium’s industry members.

During the consortium’s Industry Talks presentation in August, GLASE executive director Erico Mattos reviewed controlled environment production market growth based on the results of the USDA’s Census of Agriculture. Using the results of the USDA’s 2007, 2012 and 2017 censuses, Mattos discussed the national market growth of food crops produced under protection with detailed analyses of the top producing states. The full video can be accessed by GLASE members at the GLASE.org

Increasing value of protected food crops
Total market value for all protected food crops, including tomatoes, vegetables, berries, and fresh herbs, increased 17.9 percent from 2012 to 2017. Market growth for sales of all protected food crops increased 20 percent from $634 million in 2012 to $748 million in 2017. Greenhouse tomato sales increased 4.7 percent from $400 million in 2012 to $419 million in 2017. Other greenhouse vegetable sales increased 40.6 percent from $234 million in 2012 to $329 million in 2017. Fruit and berries sales decreased 13.5 percent from $29 million to $25.1 million even though production area for these crops rose from 7.9 million square feet to 11.7 million square feet.

Greenhouse tomato production area expanded from 55.1 million square feet in 2012 to 63.9 million square feet in 2017, a 16 percent increase. For other greenhouse vegetables, production area rose from 42.8 million square feet in 2012 to 48.6 million square feet in 2017, a 13.6 percent increase.
Only other greenhouse vegetables and fresh-cut herbs saw an increase in market share from 2012 to 2017, rising from 35 percent to 43 percent. Both greenhouse tomatoes and fruit and berries saw a decline in market share between 2012 and 2017. Tomatoes fell 6 percent from 60 percent in 2012 to 54 percent in 2017. The decrease for fruit and berries was only a 1 percent drop from 4 percent in 2012 to 3 percent in 2017.

Increase in protected food crop operations, production area
The number of protected growing operations increased for all crop categories between 2012 and 2017. The number of farms producing greenhouse tomatoes rose 26 percent, up from 6,323 operations in 2012 to 7,974 operations in 2017.

The number of farms producing other greenhouse vegetables rose 36.6 percent between 2102 with 5,268 operations to 7,198 operations in 2017.

Farms producing greenhouse fruit and berries also saw a double digit increase (25.7 percent), up from 673 operations in 2012 to 846 operations in 2017.

Number of small farms increasing
Mattos said the increase in the number of protected crop operations is driven by the establishment of smaller farms.

“There are a lot of smaller farms producing greenhouse vegetables, but they represent a very small part of the market share,’ he said. “In general, as the size of the farms increases the value of sales increases until the size of operations reaches 40,000 square feet or more where there is a dramatic jump in the value of sales.”

Small size farms from 1-999 square feet represent 31.6 percent of the number of farms in the United States. These small operations only cover 1.1 percent of the square foot production area for the total industry. These farms also only represent 1 percent of total sales. They are receiving a net rate of $5.74 per square foot for what they are selling.

Operations from 1,000 to 2,999 square feet account for 32.8 percent of U.S. farms. The net rate sales are the lowest for operations from 2,000 to 2,999 square feet at $4.42.

Those greenhouse vegetable operations with 20,000 to 39,999 square feet in size are earning the most money per square foot at $11.23 per square foot. Mattos said this size category might be a good mix of technology and greenhouse management and are definitely doing something right.

Mattos said there are fewer large farms producing greenhouse vegetables, but they dominate a big part of the market. The largest operations in the U.S. with 40,000 or more square feet represent 2.7 percent of the number of farms. However, they account for 67.6 percent of the square footage (76.1 million square feet) in the U.S. These large operations also have the highest value of sales per square foot at 67.8 percent. These farms are making $6.67 per square foot.

For greenhouse tomatoes, the largest operations are the most efficient, accounting for 74.5 percent of sales and having the largest return per square foot at $7.28.

Major protected-environment producing states
On a state-by-state basis for all greenhouse vegetable categories, the top state in regards to market share value was California with 46 percent, which had a market value increase of 26 percent from 2012 to 2017. Even though the number of farms decreased from 427 to 409, the amount of square footage grew 24 percent from 28.3 million to 35.2 million square feet.

Other leading states with market share included Texas (14 percent), Ohio (10 percent), New York (9 percent), Maine (8 percent), Virginia (7 percent) and Minnesota (6 percent). Ohio had the largest rise in sales, increasing from $10.5 million in 2012 to $43.8 million in 2017, accounting for an increase of 317 percent in just five years. Virginia also experienced a large sales increase (270 percent), going from $8.5 million in 2012 to $31.5 million in 2017.

While California still had the largest market share (33 percent) for greenhouse tomatoes, it wasn’t as dominant as it was for total greenhouse production. Other states which accounted for greenhouse tomato market share included Texas (21 percent), Ohio (13 percent), New York (12 percent), Minnesota (10 percent), Arizona (6 percent) and Illinois (4 percent).

States with the largest increase in tomato share included Ohio (908 percent increase), going from $3.2 million in 2012 to $32.1 million in 2017. Illinois also saw a major rise in greenhouse tomato sales going from $1.7 million in 2012 to $10.7 million in 2017, a 517 percent increase.

For other greenhouse vegetables and fresh-cut herbs, California dominates sales ($126. 2 million) with 60 percent of the market. Virginia followed with 11 percent of the market and Illinois had a 7 percent market share. These two states had the largest growth in this crop category with sales in Illinois rising 565.8 percent from $2.2 million in 2012 to $14.3 million in 2017. Virginia saw sales grow 245 percent from $6.7 million in 2012 to $23 million in 2017.

For more: Erico Mattos, Greenhouse Lighting and Systems Engineering (GLASE), (302) 290-1560; em796@cornell.edu; https://glase.org.

David Kuack is a freelance technical writer in Fort Worth, Texas; dkuack@gmail.com.

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