An old leaf disrupts the greenhouse industry

Smuccies strawberries are packaged ready to ship to local consumers. Photo by Mucci Farms.
Mucci Farms is employing state-of-the-art technology in terms of automation and lighting to grow strawberries and lettuce, in addition to traditional crops of tomatoes and peppers.

A greenhouse with troughs of cascading strawberries is no pipedream. At Mucci Farms, Kingsville, Ontario, every powder-white surface is designed to direct sunshine into a flavourful berry.


 “Inclement weather is very hard on field berries,” says Danny Mucci, president, Mucci Farms.  “We noticed that strawberry prices go through the roof when weather is bad in California and Florida. Europe has been growing indoor berries for 20 years. So we saw an opportunity in the northeast to grow strawberries under glass where it’s a perfect environment and the berries are as clean as possible.”


Sweet on strawberries


Since commercial operations began in 2016, Mucci Farms have grown strawberries rooted in pots. The growing pots are notched so that the strawberry plant can produce the optimum number of trusses to bear berries that will droop down. This plant architecture, at shoulder level, is one of the aspects of indoor production that produces a perfect-looking berry. Each pot is serviced by a dripper that contains the precise amount of nutrients in water.


Proprietary sources of genetics are one of the initial inputs to competing on flavour with field-grown strawberries. The Europeans have proven that flower mapping, a predictor of yield, is an important criteria of quality nursery stock. This risk-reducing technique is employed in the plants propagated for Mucci Farms.


Unlike field berries nestled in straw or plastic, this pristine product is meeting retailer expectations for appearance, taste and shelf-life of 12 to 14 days from harvest. The  strawberries – cleverly trademarked as Smuccies -- are packed in clamshells that are now available in eastern Canadian grocery stores as well as the U.S. Sales have gone well enough to warrant an acreage expansion from 24 to 36 acres in the fall of 2018.


“We expect to double our 36 acres to meet consumer demand,” says Mucci. “It might not be in 2019 or 2020, but we definitely see that coming. With lit culture – high-pressure-sodium lamps – we can produce year-round.”  


If there’s any challenge, Mucci says that summer temperatures in southwestern Ontario are actually too hot. While diffused glass reduces stress on plants, further measures such as high-pressure fogging systems, are used to cool the greenhouses in summer.


Like greenhouse vegetables, intensive management of strawberries is required from genetics right through to harvesting and packaging. The infrastructure requires considerable investment of $1 million per acre. These costs are not unfamiliar to those turning to an alternative crop.


Pivot to pot


“The greenhouse industry is in a state of flux right now for a number of reasons, but cannabis is the big disruptor,” says Joe Sbrocchi, general manager, Ontario Greenhouse Vegetable Growers, based in Leamington. “Our original expectation for traditional greenhouse vegetable acreage growth for 2018 was approximately 9.2 per cent. Now we have adjusted our forecast to a little more than 1.5 per cent. Most of that acreage bleed is to alternative crops, primarily cannabis.”


That downgrade is an eyebrow-arching figure. Consider that the Ontario industry has witnessed an average of six per cent growth each year in the last decade, now totalling 2,941 acres under glass. That number comprises 852 acres cucumbers, 1007 of peppers and 1082 of tomatoes.


“On the rainbow side, new greenhouses will be built over the next four to five years, and every indication is that the acreage growth will be in the same range of 300 acres per year, but growers may go back and forth between different crops,” says Sbrocchi. “There are two options in the cannabis market:  recreational and medicinal. When cannabis is legalized, we really don’t know how much volume will be needed because there are many ways that cannabis can be used besides smoking it. Other uses such as edible forms, gel capsules, lotions and salves are available or being developed. A lot of tonnage is required for medicinal pain relief.”


As Sbrocchi recalls, “It used to be that you could predict the volumes of tobacco leaf needed for cigarette smokers. But the same calculus doesn’t work for cannabis. That’s because no one knows how big the pain-relief market for cannabis will be. Other new medicinal uses are being developed almost weekly it seems.”    


When Canada’s largest bell pepper grower, Peter Quiring of NatureFresh Farms, announced in February 2018 that he’s in a joint venture with Cannabis Wheaton Income, that’s another sign that a major shift is underway. As recently as 2015, Quiring built a vegetable greenhouse in Delta, Ohio, but he’s put the brakes on expansion there due to lack of labour and dug in at Leamington, Ontario. His South Essex Fabricating company will construct a state-of-the-art, purpose-built greenhouse for medical-grade cannabis.


A fresh start may be the least expensive route. Estimates for retrofitting a greenhouse – even a fairly new one as is the case with the recent 32-acre Double Diamond Farms-Aphria venture -- are $1 to $1.25 million per acre. This is on top of the original $1million/acre build.

British Columbia is feeling the same disruptive effects. Of the 800 acres in vegetable greenhouses, 100 acres are being converted to cannabis culture according to Marcus Janzen, a long-time pepper grower in Abbotsford. Canada’s biggest licensed cannabis producer is in Langley, BC where Canopy Growth Corporation is developing up to three million square feet of capacity.

Unintended consequences may be in store, Janzen says, if too much production goes out of peppers and destabilizes the consistent vegetable supply that retailers have come to expect.


“There’s too much money chasing cannabis,” he says. “I predict that in seven years, many of these cannabis operations will go bust and the pharmaceutical companies will pick them up for cents on the dollar.”


Questions about costs


While cannabis is giving a lift to investors, growers are still shouldering escalating costs.

Whether the crop is cannabis or cucumbers, two major inputs remain constant: energy and labour.


“Carbon pricing is a big one and the minimum wage hikes are a killer,” says Sbrocchi. “By the end of the 2018 calendar year, we are expecting a 32.5 per cent increase in costs from a little more than a year previous. Do you know many businesses that can withstand these types of cost increases?” 


He’s referring to Ontario’s minimum wage which went to $14 per hour on January 1, 2018 and is forecast to go to $15 per hour in a year.


With about 70 per cent of Ontario’s greenhouse vegetables exported to the U.S., the drums are beating for a positive outcome to the NAFTA renegotiations tentatively scheduled for April 8, 2018 in Washington.


“When it comes to NAFTA modernization, an unfavourable result would be a slowing of capital investment,” Sbrocchi observes. “If the U.S. market is cut off or diminishes due to tariffs, then it could become much more expensive to enter that market. We could be in for a lot of pain.”


If that’s the case, medicinal marijuana will be close at hand.


Click here for a "Behind the Scenes" podcast with Danny Mucci, president of Mucci Farms.

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Publish date: 
Thursday, March 29, 2018

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