Deep Winter Food Production in the North Central Region

Production trials

1. Select crop cultivars

Lettuces such as ‘Florence’ and ‘Salanova’ and Asian greens/brassicas such as ‘Gemstone Blend’ and ‘Vitamin Green’ are generally performing well (Figure 1). The spinach cultivars ‘Regiment’ and ‘Shelby’, in addition to the ‘Red Veined’ sorrel would not be recommended for DWG production at this point. It should be noted, however, that growers are typically mixing multiple crops for a salad mix. So depending on the preferred look and taste of the mix, a grower might only need a little of something different to make the mix “pop,” in the words of Carol Ford, and the bulk could be lettuce or Asian greens.

Figure 1. Total fresh weight (g/gutter) for leafy green crops grown in three Deep Winter Greenhouses in Milan, Madelia, and Finland, MN during the winter and early spring months of 2018.
Error bars indicate standard deviations for each cultivar averaged across locations and harvests.

The results for days to maturity of each cultivar showed an inverse relationship to yield, whereby the cultivars that matured quicker also typically yielded higher than those that matured more slowly, e.g. ‘Red Veined’ sorrel and the spinach cultivars had the longest days to maturity on average (Figure 2). We would recommend that growers plant cultivars with shorter DTM to maximize production in terms of time and apparent yield. Further, all cultivars obtained highest yields in the first harvest, compared to the 2nd or 3rd. Growers should consider this fact along with the expected DTM for each harvest in their production regime.
When we compared locations, DTM across cultivars was almost twice as long at Milan compared to the DWG 2.0s (Figure 2). This could be related to the temperature difference between the sites where the 2.0s were ~10°F warmer over the season than the 1.0 in Milan. This shows an important improvement in the design of the new prototypes that is translating to better plant growth.

Figure 2. Days to maturity (DTM) by cultivar averaged across locations and harvests for leafy green crops grown in three Deep Winter Greenhouses in Milan, Madelia, and Finland, MN during the winter and early spring months of 2018. Error bars indicate standard deviations for each cultivar averaged across locations and harvests. Also shown is DTM averaged across cultivars by location.

This year, the 2018-19 season, we have updated the cultivars with grower input. We are trialing 6 cultivars in each sub-season (Diminishment, Solstice, Expansion) for a total of 18 cultivars. Half of these cultivars are standard grower cultivars that have done well in the past and half are new cultivars, so that we can compare performance. While typically growers have focused on certain crops in certain sub-seasons, we’re actually identifying cultivars that perform well throughout the winter which makes planning and growing these crops easier in the end.

    2. Understand optimal seeding densities

We were able to get two harvests from the lettuce and Tokyo Bekana, but only one from the arugula before it bolted, so yields appear low for arugula in Figure 3. When averaged across crops, seeding rate does not significantly affect yield. Therefore, adjusting seeding densities may be crop dependent. Our research shows no additional yield gain from increasing seeding rate in arugula, so growers could seed just the recommended rate. Tokyo Bekana and the DMR Lettuce Mix did respond to increased seeding rates; yields were highest at the Grower rate for lettuce, and similarly high for the Grower and Middle rates compared to the Recommended rate for Tokyo Bekana. As noted in Figure 3, however, the 2nd harvest of the lettuce yielded the highest at the Recommended rate. Again, taking into account the whole production scheme will be important for growers to make these decisions.

Figure 3. Days to maturity (DTM) by cultivar averaged across locations and harvests for leafy green crops grown in three Deep Winter Greenhouses in Milan, Madelia, and Finland, MN during the winter and early spring months of 2018. Error bars indicate standard deviations for each cultivar averaged across locations and harvests. Also shown is DTM averaged across cultivars by location.

    3. Understand optimal soil-less substrate

All crops trialed responded similarly to the substrate treatments, where plants yielded the highest in the Grower Mix (custom soil-less substrate mix consisting of peat, vermiculite, Purple Cow compost (0.7-0.3-0.3), lime, blood meal, greensand, and rock phosphate), as evident in Figure 4 with arugula. Plants in the Super Soil treatment yielded next highest, but the soil seemed to retain too much moisture and not enough nutrients for continued plant growth. Plants did not respond well to the JavaCycle + Purple Cow mix, showing poor germination (Figure 4) and potential salt toxicity. Soil and plant analyses data are pending.

Figure 4. Arugula crop grown in different soil-less substrate treatments at Madelia, MN.

In year two we updated the substrates that we trialed given the poor performance of JavaCycle and the fact that Super Soil, as we later found out, is merely topsoil and deemed unsustainable. We tested alterations to the Grower Mix, included different composts and eliminating bloodmeal, as well as an ‘off the shelf’ product. The year two substrate mixes included: the standard Grower Mix containing Mississippi Topsoils compost; Grower Mix without the bloodmeal; Grower Mix with Purple Cow compost instead of Mississippi Topsoils; and Mississippi Topsoils’ Potting Soil. 

Across both year one and year two seasons, all cultivars grew best in the standard Grower Mix with Mississippi Topsoils compost, though the Grower Mix with the Puprle Cow compost was close behind. An almost 100 g yield loss was observed when removing the bloodmeal from the substrate mix, indicating the plants are responding to this addition. Yields were low in the Potting Soil and showed signs of nutrient deficiency.

Enterprise Analysis

The deep winter greenhouse operators who participated in this study varied significantly in their annual operating costs and returns, as well as start-up costs. 

About Deep Winter Greenhouse Structures and Operations

The operators that participated in this study built a range of deep winter greenhouse structures.  Although based on the same original design outlined in The Northlands Winter Greenhouse Manual (http://www.gardengoddessenterprises.com/), sizes ranged from 288 square feet (12 x 24 feet) to  3,264 square feet (34 x 96 feet) and included the following design features:

• One greenhouse incorporated thermal solar panels and in-ground floor heat, in addition to a rock heat sink.
• Three greenhouses used heat generated by wood boilers.
• Four greenhouses were free-standing structures while the other four were attached to pre-existing buildings.
• One greenhouse was built from a greenhouse kit with a double-layer of plastic, although still had a heat sink and heavy insulation elements like other deep winter greenhouses. All others were used stick construction and polycarbonate panels.

All of these design features affect construction cost, and potentially, the performance of the structures themselves (there is no specific data, however, to discern how individual design features have influenced heating costs or production, especially as each greenhouse faces distinct climatological conditions). 

All deep winter greenhouse operations in this study were relatively new. The oldest facility was built in 1998 and the newest built in December 2017. Each greenhouse had a single person who handled nearly all of the daily chores of planting, watering, and harvesting with assistance from a spouse or other family member. All greenhouses were commercial in nature.

In terms of production, all greenhouse operators raised winter greens such as arugula, lettuces, and Asian greens and select roots crops like turnips and radishes. For greens production, operators took multiple cuttings of each planting. No study participants used chemical herbicides or pesticides, and all generally used only organic inputs for soil mix, such as blood and bone meal (although a few sourced exclusively organic seed).

One challenge in this study is finding an apples-to-apples comparison between the greenhouses because the sales related to the greenhouse are diverse. All greenhouse operators used their structures for ancillary revenue-generating activities such as growing transplants, food for home use, value-added products, and tours. The revenue sources were also mixed with products grown outside the greenhouse. For example, attributing the total revenue from a winter CSA that combined winter greens with storage crops would overestimate the value of production from the greenhouse operations. On the other hand, a winter CSA would not have been possible were it not for the greens grown in the winter greenhouse. To best represent these complexities, this analysis only used the value of the products grown within the greenhouses during a consistent winter season, generally November through February.

Start-up costs

An investment in a deep winter greenhouse is significant. The average start-up cost among participants was $18,583. Two of the eight cost less than $6,000, whereas four cost more than $20,000.

Start-up costs include building the greenhouse and preparing it for its first season. Individual expenses include lumber, polycarbonate sheets, and hardware, as well as excavation and foundation work. Additional costs include ground inputs for a heat sink (e.g., rock and sand); heating improvements (including a backup heat source or upgrades to heating systems); construction labor; and initial growing supplies (for example, seeding equipment, trays, and lumber to build raised beds). For those greenhouse operators who built their greenhouses themselves, the value of their labor was not included. Construction labor only included cash expenses.

A helpful way to consider start-up costs is on a square foot basis. For this study, the total square footage of each greenhouse and growing space (total amount of space in hangers plus area planted on the ground) was collected.

The average cost per square foot of greenhouse space was $61, ranging from $20 per square foot to $133 per square foot. As a point of comparison, a 14 x 24 foot twin-wall polycarbonate greenhouse kit (not installed and without the passive solar heat sink) from Farmtek costs $14,705, or $44 per square foot. 

Table 1: Start-up costs per greenhouse and per square foot of space and growing space

Looking solely at growing space, there was an average cost of $33 per square foot of greenhouse to build the structures (which includes the growing area and all ancillary packing space as part of the greenhouse) and $70 per square foot of growing space. The difference between these two measurements gives a sense of space utilization where those with a small difference are using their space quite intensively and those with large differences are not. Growing space returned nearly an average of $3 per square foot of operating revenue annually, calculated as gross sales minus variable expense (see Table 3).

Product marketing

All deep winter greenhouses grew and marketed similar products, primarily winter greens and lettuces that do well in a cool environment, although one greenhouse grew only herbs. Most also grew cole crops, Swiss chard, and root crops, such as radishes and turnips.

Gross revenue, or sales, for the greenhouses ranged from $207 to $8,786. Removing variable costs necessary to grow a crop (seed, soil mix, and fuel), it was found that all greenhouses had positive operating revenue (gross revenue minus variable costs), but quite a variation due to greenhouse size and intensity of production. Converting revenue per greenhouse to operating revenue per square foot of space, participants took in an average of nearly $3 per square foot, ranging from $0.24 to $6.94 (see Table 3). 

A common way of presenting operating revenue is through a measure of gross margin. Calculated as operating revenue divided by gross revenue, gross margin is a percentage of gross sales an operator retains after taking out direct expenses to produce a crop. For example, one greenhouse kept 76 cents of every dollar it sold and therefore had a gross margin of 76%. Study participants ranged from a gross margin of 54% to 83% with average gross margins of 69 percent (see Table 3).  

Table 2: Gross Revenue and Operating Revenue*

Operating Costs and Returns

All greenhouse operated experienced positive operating revenue (defined as gross revenue minus variable expenses, such as fuel, soil mix, and seeds). Setting aside the capital costs associated with building a greenhouse, these operations have realized an average gross margin of 69%, meaning operators kept 69 cents of profit for each dollar of revenue. Gross margins ranged from 54% to 83% this variation is explained primarily through the difference in revenue, as variable costs were fairly consistent for most of the greenhouses (approximately $1,000) with an average annual variable cost of $892. Those operating winter CSAs had three of the four highest gross margins, ranging between 54% and 81% (see Table 3). This difference in how product is marketed also translated to significant differences in profitability (see Financial Performance section).

Table 3: Operating expenses*

*Average for all the winter seasons in operation

The largest variable expense is other (mainly due to greenhouse 7 with a high supply expense), followed by soil mix, propane, utilities, and seed costs. Marketing costs – costs incurred once a crop is raised – involves delivery expenses and packaging costs as some growers elect to present products in containers such as clamshells and use waxed boxes for packing finished products. Another marketing cost is mileage for operators who deliver their product to buyers. Considering the greenhouses generally operate October through March, fuel costs were relatively low; the average fuel cost was $199 annually. Three operations reported no propane costs during the 2017-18 season, using heat exclusively from wood boilers, electric, or home heat.   

Financial Performance

The primary measure of financial performance for any enterprise is net revenue, calculated as gross revenue minus both capital and operating (variable) expenses. In this instance, the annual depreciation expense (capital costs) and annual operating expenses were subtracted, such as seed and propane (operating costs) from gross (see Table 5). Extension calculated depreciation using straight line depreciation over twenty years minus a salvage value of $1,500. Greenhouse five does not have a depreciation cost since it is 20 years old.

Greenhouse seven had the highest net revenue by far. This is explained by the size of the greenhouse which is fully utilized to garner almost $9,000 in gross sales. Its capital costs and operating costs are the highest, but at over 3,000 square feet, even modest sales per square foot would provide significant sales.

Table 4: Net Revenue, capital costs (depreciation expense), and operating costs (variable expenses)

Payback and Return on Investment

One of the most common questions of prospective winter greenhouse operators is the return on investment or payback time. 

Calculated as net revenue divided by start-up costs, return on investment (ROI) ranges from 30.8% down to -3.7% with an overall ROI for all eight greenhouses of 7.3% (see Table 6). Instead of an average, an overall ROI was calculated by dividing total net revenue by total start-up costs for all greenhouses.  

In comparison, payback time does not account for capital costs or depreciation, but instead is calculated as start-up costs divided by operating revenue. Calculated this way, payback time ranges from as few as three years to as many as 110 years, with an overall payback time 8.6 years (calculated as total start-up costs divided by total revenue minus total variable costs for all greenhouses).

Table 6: Return on Investment and Payback Time

Labor inputs and returns

Each greenhouse operator was asked how much time they spent planting, watering, harvesting, and marketing crops for the foods they sold throughout the winter. Each study participant estimated their time for each month of the year and tracked one month with a daily chore log to inform their estimates.   

All of the study participants operated the greenhouse on a part-time basis with assistance, at times, from a spouse or other family member. The greenhouse operator who spent the most time invested a total of 394 hours during the winter season. On average, growers spent 139 hours to produce, market, and deliver their winter crops, which breaks down to five hours per week on average or less than an hour a day. Hours spent on growing summer transplants in the greenhouse or other ancillary revenue-generators were not included. Presented as an hourly wage, operators made between $4.61 to $54.08 when calculated as operating revenue divided by total time spent working in the greenhouse (see Table 7).

Table 6: Labor invested for winter production and time expressed as hourly wage (operating revenue/total hours worked)

Other Benefits of Deep Winter Greenhouse Production

All survey participants experienced other benefits—some economic, some not—that are difficult to incorporate into a standard financial analysis such as this study, but they are no less important to many of the participants. 

The ability to grow crops for family consumption emerged as a primary motivator for many greenhouse operators. One participant estimated his family consumed the equivalent of four to five bags of salad mix per week, or a value of $400 throughout five winter months ($20/week for 20 weeks). Other participants shared similar estimates and stories. 

Likewise, all study participants shared how they used their winter greenhouse to start summer transplants or for value-added products like dried herbs or sun-dried tomatoes. One participant estimated saving nearly $600 in annual heating costs, because he no longer needed to use his old hoop-style greenhouse, which had been in operation more than a decade. 

Space Utilization affects profitability

Previous research on the profitability of deep winter greenhouses (DWGs) found that the most profitable also maximized the use of space. Considering DWGs are relatively expensive, judicious use of space is an important recommendation to operate profitability. The Northlands Winter Greenhouse Manual written by Carol Ford and Chuck Waibel suggested a configuration of hanging planters in equally-spaced rows for ease of harvest. Early adopters used the original ‘equal spacing’ set-up. In time, however, growers compressed spacing between rows and planters to maximize space. Extension shared about these configurations at workshops targeting existing and prospective DWG operators. 

Bank Configuration

Some growers created ‘banks’ where three to six rows of hanging planters were placed together with little space between the rows. Growers left between one and three inches between the rows to allow for greens to spill over the planters to some degree. In between the banks was an alleyway that allowed operators to water planters from either side:

Tiered Configuration

Taking the idea of a bank further, Extension documented that some growers have adopted a tiered system which abandoned the hanging set-up altogether for a one where planters sat on racks. Like in the bank configuration, planters had minimal space between one another (1 to 3 inches). Instead of being spaced equally horizontally, however, the planters were arranged in tiers where the lowest row sat nearest the south-facing glazing wall and the highest row sat furthest away with the tiers overlapping one another, but not completely.

The tiered configuration allowed for more growing space in the same greenhouse area and growers did not report significant loss in quality or yield due to the tight spacing. One grower who moved from the original hanging planters system to a tiered system more than doubled the number of planters using the same space from 68 to 138 trays.