Why the future of agriculture is a hot topic in Virginia

“One very interesting thing that continues to grow and expand is the increased demand for locally grown foods,” Lohr says. “I think COVID played a big part in that, as people became concerned with how their food was produced and how it gets to them.”

There is also a growing need to produce more food over the next decade. What does that mean for the future of agriculture, be it in Virginia or elsewhere? It means, Lohr says, there’s an opportunity.

“We have to look at new ways to grow the food we need,” Lohr says. He adds that while there’s always going to be a need for traditional ag — specifically for crops like corn and soybeans, as well as livestock and dairy — there’s “an incredible opportunity before us” to feed people with lettuce, tomatoes and other crops grown indoors.

In 2023, Virginia passed House Bill 1563 and Senate Bill 1240 that expanded the “agricultural sales tax exemption to include items used to produce agricultural products for market in a CEA commercial facility.” Republican Gov. Glenn Youngkin, who Lohr repeatedly cited as a major proponent of CEA, called the tax exemption “vital.”

Lohr cited that bill signing as a way to highlight the history of agriculture in Virginia that also is looking toward the future. Indoor ag businesses, as well as the research at universities in the state, are a “catalyst for economic transformation.” The combination of economic development and research, Lohr says, helps “position the Commonwealth as the go-to state for CEA growth in this rapidly growing industry.”

Virginia has seen several CEA operations and projects committed to the state in the last year or so, including a vertical farming campus in Danville and Better Future Farms near Charlottesville.

There’s also an influx of new kinds of farmers entering agriculture, Lohr says, that Virginia can take advantage of. There are young people — people that are attracted by the technology used in CEA, as well as its mission. There are also older first-time farmers entering the industry. At a recent event aimed at helping new growers navigate financing, Lohr says a third of attendees were in their 60s.

“There are so many people now that have an interest in agriculture,” Lohr says, “and it’s so exciting to be in a position where we can help lead that way.”

The importance of location of Better Future Farms

According to John McMahon, the founder of Better Future Farms, location was key for the company for two major reasons.

For starters, the company’s location in Virginia is near highways, making it easy to ship product to retail partners. Secondly, the location was already near existing natural gas lines — thus lowering the cost to have the necessary lines run to the greenhouse. McMahon says that there was another site in mind for Better Future Farms, but it was ruled out because of how far away it was from existing natural gas infrastructure. The final location was also selected because the land was already relatively flat and required less dirt to be moved around.

Another key part of the greenhouse design, McMahon says, was building an in-house produce washing station. The process, he says, will be automated and built into the flow of the facility. The equipment will encompass an entire room in the greenhouse in between a growing area and an in-house packing area.

McMahon says the facility will be fully online in 2024, and the product grown will be sold under the Taylor Farms brand.

Industry talking points

In his keynote presentation at CEA Summit East, AeroFarms President and CFO Guy Blanchard compared the controlled environment agriculture industry to electric cars.

Blanchard began his presentation detailing the history of electric cars. He noted that, way back in the early 20th century, electric cars were tried out and made their play for their market. However, gas cars won out and electric cars wouldn’t come back until the 1990s, when General Motors led innovations with an electric car. Those innovations helped build the market that exists for consumers today, where Tesla is one of the leading car companies in the world.

“Everything that exists today is the result of what came before it,” Blanchard said.

What worked for electric cars, Blanchard said, could work for CEA. Today, with electric cars, the technology exists to give consumers products they want. Technology can also drive that for CEA, he said.

Blanchard struck an optimistic tone about AeroFarms. He noted the company has exited Chapter 11 Bankruptcy as of September 14 and called the bankruptcy a “reorganization.”

“We are out of Chapter 11 today because our partners and sales, our vendors, our employees were amazing,” he said. “No one ran from us. We had people stand by us, partner with us really across the industry. That support is what allowed us to regroup as a company very, very strong and be positioned for this profitable success in the future.”

Overall, the broader CEA industry going through a period of contraction was a big point of discussion. While the outlook for the industry was optimistic, general consensus was that there will continue to be some businesses that fail as the industry matures and a few will pull ahead of the rest.

One other key talking point was crop diversity. Leafy greens and tomatoes remain on top, but what other crops can be grown at scale and, eventually, for profit was a point of discussion. Some attendees looked at spinach as the next crop to watch, while others were more optimistic about the long-term potential of greenhouse-grown berries.

Ultimately, though, everyone agreed: which businesses and crops end up working long-term will come down to what the customers want and if the margins make sense to grow crops at scale.