Hydroponic Farming Cost and Profit Analysis

Hydroponic Farming Cost and Profit Analysis:

INTRODUCTION TO HYDROPONIC FARMING COST AND PROFIT:

The soilless farming technique which is gaining popularity these days is called hydroponic farming. This technique makes use of a water-soluble nutrient mixture for growing fruit, vegetable, or flowering plants. Generally in conventional farming technology, the soil soaks and stores the nutrients that are supplied and the plants in turn take the nutrients from the soil. But in the hydroponic method of farming plant roots get in direct contact with the water-soluble nutrient content and this helps in faster absorption and growth. The idea of hydroponic farming is believed to serve two purposes, one is it can be practiced by people to grow fresh fruits and vegetables where the soil condition is not suitable for conventional farming, second it is a solution for satisfying sustainable food requirements in urban areas where the land for conventional farming is not easily available due to other commercial business ventures. Hydroponic farming is being considered a revolution in the farming or agriculture industry because of its capability to produce surplus food. This farming technique is environment friendly as there is no much use of chemicals in the form of pesticides and insecticides. Growing plants hydroponically need an environment that can be controlled as per the requirement. This kind of controlled setup for the cultivation of crops eliminates the danger of critical warm climatic conditions in agriculture. Experts believe that greenhouse hydroponic farming is a perfect one-stop solution to all farming and food-related problems. Most of the people are showing interest to set up hydroponic systems at their homes. Even one can have commercial hydroponic farming systems for good profits. The following information describes the Hydroponic Farming Cost and Profit.

HYDROPONIC FARMING COST AND PROFIT – ADVANTAGES OF HYDROPONIC FARMING SYSTEMS

There are several advantages of hydroponic farming over other traditional methods:

  • A properly well-planned design of a hydroponic system reduces the risk of water and nutrients. It is estimated that the use of land in hydroponic farming is reduced by 50% and the use of water is reduced by 90%. Therefore it is highly beneficial in areas where water is scarce and land is limited.
  • The diseases caused by the soil structure in traditional agricultural techniques is absent in hydroponic farming. Also, the other aspects like tilling the soil, weeding, and maintaining sanitation are greatly reduced in hydroponic farming.
  • The space required for hydroponic farming is comparatively low. The spacing between plants is also less which ensures that large production can be done in a small area. Concepts like crop rotation and other soil conservation methods can be ignored.
  • The efficiency of the hydroponic system depends on the fact that plants are provided with materials that are needed for their growth. The investment is a little higher but the yield is expected to be four times higher than the conventional methods. The produce from the conventional farms is seasonal but from a hydroponic farm, it is unseasonal.
  • The crops don’t need much time for harvesting. The process is much quicker when compared to other techniques.

HYDROPONIC FARMING COST AND PROFIT- PROS AND CONS OF HYDROPONIC FARMING:

Pros and Cons of Hydroponic Farming System.
Pros and Cons of Hydroponic Farming System.

Pros:

  • High productivity.
  • More eco-friendly.
  • Suitable or flexible in areas with less water and space.
  • Fewer transportation facilities required.
  • Monoculture is not considered a problem.

Cons:

  • High setup costs.
  • High maintenance costs.
  • The system is vulnerable to power failures, nutrient and pH imbalances, etc.
  • Regular monitoring is highly essential.
  • The technique needs expertise due to the involvement of complicated methods such as creating a balanced nutrient mixture etc.

To overcome the high setup and maintenance costs of the hydroponic system there has been a system developed called the ‘simplified hydroponics’. This system was launched by Ms. Peggy Bradley in the United States and was brought to India under the name of the ‘Pet Bharo’ program. The main aim of the Institute of Simplified Hydroponics was to relieve people from poverty and hunger. As it was launched in India the core purpose of the project was to empower the disadvantaged class of people by training, educating, motivating, and micro-financing them to have a sustainable means of livelihood. This method of simplified hydroponics can be initiated in a small area and gets adapted to the conditions of urban areas. This method favors the people in the following ways.

  • Isolation from the soil and cultivation at a convenient level.
  • Water along with low-cost substrates such as sand, rice husk and pumice, etc are used.
  • Balconies, kitchen gardens, rooftops are the places that can be used for simplified hydroponics
  • Recycling of water is done so that the environment doesn’t get polluted.
  • Any disease or pest is controlled by natural herbal treatments. No chemicals used.
  • Higher yield in less time and multiple harvests results in greater output.
  • Easy-to-understand methods and less technological involvements.
  • Use of recycled materials.
  • Source of income to the family.
  • Safe food for consumption with high biological and dietary value.
  • Household food needs are achieved by fresh and nutritious food.
  • Shade net (shade to sun ratio) and polythene sheet can be used to protect the plants from sun and rain respectively.
  • The use of neem or garlic sprays, grease anointed plywood insect traps, etc keeps the pests, weeds, and other pathogens away.
  • It is estimated that 20 square meters of land can produce 2 kg of vegetables which can cost around 110- 120 USD.

HYDROPONIC FARMING COST AND PROFIT – EQUIPMENT REQUIRED FOR HYDROPONIC FARMING:

There are various techniques or types of deploying a hydroponic farm: the wick system, water culture, ebb, and flow system, drip system, nutrient film technique, and the aeroponic technique. A basic system of hydroponics may require the following equipment which may change depending on the size of the farm and the technique being used.

Types Of Hydroponic Farming System.
Types Of Hydroponic Farming System.
  • Plastic trays for the medium, nutrient solution, and the plants
  • A table or elevated stand to hold the trays.
  • A container to hold the nutrient mixture.
  • A pumping cable or pipe can pump 500 liters per hour.
  • Small pots with holes to hold the plants.
  • Growing medium if necessary.
  • Drainage tube.
  • Timer, thermometer, and other sensors.
  • Seeds or plant cuts
  • Nutrient solutions.
  • pH meter.
  • Induction lights.
  • LED grow lights.
  • Beneficial insects
  • Sprayers.

HYDROPONIC FARMING COST AND PROFIT – MATERIALS REQUIRED FOR HYDROPONIC FARMING:

The most important requirement of this system of farming is the nutrient solution and it is easily available at gardening centers. The nutrient solution should be a blend of important elements such as nitrogen, potassium, calcium, magnesium, etc. the nutrient solution to be used changes with the type of crop being cultivated.

Hydroponic farming can be done either with a medium or without the medium. Rock wool is the widely used medium because it is affordable and drains easily. Other mediums that can be used for farming are the clay, vermiculite, sand, gravel, and Perlite. Water circulation is not easy with sand gravel and clay as they are heavy but easily available. Perlite and vermiculite are effective.

Light is also an important factor for photosynthesis and the growth of plants. High-density discharge lights can sometimes be used during farming when adequate sunlight is not available. The use of light from various sources has different effects and is therefore used according to the plant type. Light from metal halides is used for young and green leafy plants. For fruit and flowering plants light from high-pressure sodium, lights are used.

The monitoring of the pH levels in the nutrient solution is also equally important because it specifies the acidity or alkalinity of the environment. A pH test meter is used to check the levels of the solution.

HYDROPONIC FARMING COST AND PROFIT – LIST OF PLANTS CULTIVATED USING HYDROPONIC FARMING:

Hydroponic System (Pic Source Flickr).
Hydroponic System (Pic Source Flickr).

The list of plants mentioned here is the ones that can be easily grown in a hydroponic system. The root plants are difficult to be cultivated in a hydroponic system. The list is not limited to these vegetables.

Greens: Spinach, chard, cabbage, lettuce, celery, mint, etc.

Vining plants: Tomatoes, Cucumbers, peas, etc.

Root plants: Potatoes, carrots, radish, etc

Fruits: raspberries, strawberries, small papaya, peppers, blueberries etc

Herbs: basil, parsley, rosemary, chives, sweet marjoram, watercress, dill, etc

HYDROPONIC FARMING COST AND PROFIT – ESTIMATION OF COST IN HYDROPONIC FARMING:

An example estimate for farming tomatoes in a hydroponic greenhouse (3072 square feet) set up is given here. The cost of the equipment and facilities may vary depending on the location and dimensions of the site. The fixed costs include the investment for the greenhouse structure and the setting up of the environmental control equipment.

Read this:  Zero Budget Natural Farming.

ITEM TOTAL COST PER YEAR (in Dollars, $)
Material and labour for 10% floor and labour i.e. 307.2 sq ft @ $ 2/ sq ft 614.40
Ground cover @ $ 0.08/ sq ft 207.36
Site preparation, frames, doors, poly and ends plus the construction and installation cost approximately amount to @ 1 house 12,000
Total costs in $

 

 

20% maintenance of the total costs annually

12,821.76

 

 

2564.35

Generator for a single bay 4,000
Cooling equipment for a single setup

 

 

1,850
Horizontal air fans 1,000
Electrical panel setup 1,500
Environmental control equipment and other miscellaneous building needs 4,000
Heaters, Poly inflation kit, low voltage wiring package, and protective equipment 2,525
Total equipment cost annually

 

 

20% of the equipment cost amount to the maintenance of the equipment

14,875

 

 

2,975

Growing and delivery equipment  cost include sprayer @ $ 100/unit, carbon di- oxide generator @ $ 480/ unit, pump @ $ 30/unit, feeding system, cooler and transport 11,810
EC meter @ $ 160/unit, pH meter @ $ 50/unit, thermometer @ $ 25/unit, humidity sensor @ $ 120/unit, CO2 sensor @ $ 500/unit, measurement scales @ $ 100/unit 955
Total costs annually

 

 

20% of the total cost is spent on maintenance

12, 765

 

 

2,553

 

TOTAL ANNUAL FIXED COSTS IN $ 8192.35

The variable cost for hydroponic farming is calculated on production supplies, labour, packaging, utilities, and other marketing needs. Per unit value of the item may change depending on the demand and location of the market. A rough estimate of each unit is mentioned here to determine the overall cost of the production.

SUPPLIES FOR PRODUCTION ANNUAL COST in USD ($)
Beneficial insects include (lacewing, 6 packs @ $ 36/ pack; Encarsia Formosa, 3 packs @ $ 23/pack; aphidus colemani, 1 pack @ $ 48/pack; bees, 3 hives @ $ 75/hive) 558
Fertilizers ( blended mix 429 pounds @ $ 1 /pound; calcium nitrate 429 pounds @ $ 0.4/pound; additional mix 7 pounds @ $ 1/pound; pesticides 7 gallons @ $ 7/gallon; sanitizer 1 gallon @ $ 35/gallon; Rockwool cubes 1 case @ $ 159/case; Rockwool slabs 29 bags @ $ 62/bag) 2,673
Seeds I pack @ $ 107/pack 107
Seedling support mats, I mat @ $ 114/mat 114
10 trays @ $ 1 /tray , sticky traps 1 pack @ $ 30/pack 40
1 case of clips @ $ 83/case, 1 twine box @ $ 22/box, 800 hooks @ $ 0.15/hook 225
Total cost in $ 3,717.72

Labour cost for the production depends upon the working hours and the pay per hour of work which may range between 5 hrs/year to 590 hrs/year.

Average annual working hours 759.5 @ $ 8.4/ hour: $ 6425.82

Utilities such as fuel, electricity, water, etc may be charged according to the location of the hydroponic farm. Different countries and places have different rates for using 1 kilowatt of power per hour. Also, the fuel price may vary from place to place.

UTILITIES COST in USD ($)
Natural gas 545/1000 cubic feet @ $ 10/ 1000 cubic ft 5,450
Electricity for fan and lights 12500 kilowatt-hr @ $ 0.08/kwh 1,000
100000 gallons of water 170
Other charges like telephone etc 1,080
Total cost in $ 7,700

 

PACKAGING COST in USD ($)
17 label rolls @ $ 30/roll, 66 cases of foam trays @ $ 31/case and 1970 boxes @ $ 0.65/box 510+2046+1280.50
Total costs in $ 3836.50

Other Miscellaneous costs include advertising, office supplies, laboratory fees, internet service, marketing, training, software, etc and amount to,

Miscellaneous costs: $ 2870.00

Accountant and lawyer charges: $ 750 (approximately).

Land rent charges: $ 100/acre.

Total variable costs: $ 25300.05

From the above data it is derived that:

ANNUAL FIXED COSTS ARE: $ 8192.35

ANNUAL FIXED PLUS VARIABLE COSTS ARE: $ 33,492.40

NO OF PLANTS IN THE SYSTEM: 691

NUMBER OF FRUITS PER PLANT: 30 POUNDS (WITH 5% WASTAGE)

ANNUAL POUNDS FOR SALE PER YEAR:  $19,694

PRICE OF EACH POUND OF FRUIT: $ 1.80

TOTAL RETURNS ANNUALLY: $ 35,448.30

Therefore the profit on the investment is estimated by deducting the annual costs from the annual returns.

HYDROPONIC FARMING COST and PROFIT – TOTAL PROFITABLE RETURN ON THE INVESTMENT IN HYDROPONIC SYSTEM IS: $ 1955.90

This system describes the production of tomatoes but farming of different vegetables and fruits may deliver different outputs. The profit margins may also change depending upon the demand for the produce in the market and the hydroponic farming system’s production capability. The above-mentioned figures are just given to understand the structure of the investment and help beginners to draw up their business plans.

In case if you are interested in this: How To Grow Organic Lettuce.

33 COMMENTS

  1. I have 5000m2 space with 70 m x 70 m dimension and I would like to grow vegetables by using indoor hydroponic technique. In Oman, I do want to know what are the requirements and how much will it cost?.

  2. Hello, I apreciate this valuable article and I would like to update and adabt the paper to the local conditions of Morocco. pease send me the report if possible.

  3. Hi there, thank you for your effort. Are the costs in USD mentioned as per international cost rates or they are applicable similarly to the Indian cost rates. Do you have any sample to Indian (Rupees) cost sheet for the Hydroponic farming? I would really appreciate if you do. Thank you in advance.

    Kind regards,
    Sumedh

  4. Thanks a lot for providing detailed information about hydroponics farming. I have a land of 890 sq. Mtrs near Ahmedabad and much interested to do hydroponics farming. Please advise on the cost of investment and Return on investment and pay back. Much appreciated

  5. can you plz send the total set up cost for 60 sq mtr space?I’m planning to grow vegetables on my terrace through hydroonics farming in goa.

  6. Hello Mr. Jagdish,
    I am looking to set up a similar project. I have read your report and it has given some important insights into the concept of hydroponic farming.
    Thanks in advance.

  7. Hi Mr.Jagdish,
    Excellent article.If you could also incorporate financial report for Indian Market,it would have been complete nutshell.
    All the best

  8. Thank you for giving valuable information. i have 1500sft i want to set up the hydroponics. how to set up and all the things i need a help.

  9. hi Jagadish Reddy you have been a great source of information, can you help me with some contacts who can setup hydroponic farm in Karnataka

  10. Mr Jagdish,
    Your this article is good but you gavecost in USD and not in Rupees. Are you farming in INdia or USA? If in India, then cost will change drastically. Can you please suggfest the cost of starting this project in Rajasthan with 2000 Sq Ft Space as pilot project?

    Thanks
    Jitnedra

  11. Dear Mr Reddy
    Hope you are growing Horticultural crops by using this Hyderoponic system. Most of the people in India talk on Hydroponics based on their bookish knowledge. If you have personal experience, we would like to visit your farm to understand the real viability.
    Can you please share your E mail or Mob Number to get in touch with you.

    Dr S S ROY
    Pune
    20 Feb 2021

    • Hello Mr Reddy,

      I have about 1700 sq ft closed terrace area with walls.
      Is it feasible to start with Hyderoponic ffarming there…..
      Please send me your contact details and place where you have started so that I can visit to understand better.

  12. Costs reflected here can be significantly reduced if you build all yourself and make it efficient, rather than losing all your investment to unnecessary costs. For such an area of land, my calculated investment is no more than 3 thousand.

  13. Hello , I am planning to setup 2000 sqft on building Terrace in India -AndhraPradesh Could you Please share the cost and Profit analyses draft to plan accordingly …

  14. Hello Sir,
    I am plan to hydroponic for 44000 sqft on my farm in maharashtra state
    please details about hydroponic farming ”shade, cultivation and profit’ share about cost’

  15. I want full cost of strawberry (including green house , hydroponics system , seed, etc all agronomic practices )for one acre and also production, Cost and Profit Analysis. please tell me as you possible thanks in advance. ASAP

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