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A joint venture agreement between Scenic Valley Farms and members of the local food industry that merges high tunnel agriculture with clean energy in order to produce locally grown, organically certified fruits and vegetables.
SHARE-d High Tunnels: A Joint Venture betweenScenic Valley Farms and the Local Food Industry
Sustainable Agriculture. Clean Energy. • Joint venture high tunnel greenhouses • Environmentally and financially sustainable • Provides reliable supply of locally grown, organic produce • Excess produce sold on the open market • Harvest fruits and vegetables at optimum ripeness and flavor • Increases yields and extends the growing season • Merges the technologies to earn a rapid return on investment
Sustainable High Tunnel Agriculture + Renewable Energy (SHARE-d) High Tunnels
Proposed Location of the SHARE-d High Tunnels • East of the Minnesota River Valley, West of the Mississippi River, North of Rochester, South of Farmington • Uncultivated in previous three years (necessary for organic certification) • 10-12 parcels of land have already been identified
Scenic Valley Farms• Designs and manages high tunnels, climate control systems, and solar thermal heating technology• Five high tunnels in Minnesota and Wisconsin• Produces organically certified tomatoes, peppers, blackberries, raspberries, herbs, and leafy green produce• Decades of agriculture and engineering experience
High Tunnel Agriculture• Hybrid of open field and greenhouse production• Less expensive than greenhouses• Crops planted in ground to ensure superior taste• Create 12 month growing season• Constructed with steel hoops, covered with heat retaining, light dispersing, anti-drip plastic• Plastic efficiently rolled up and down to manage air flow• Exhaust and circulation fans control air temperatures• Drip irrigation optimizes water and natural fertilizer inputs.• Manufactured locally by Poly- Tex• Incentives available at Federal and State levels
Environmental Management System (EMS)• Inexpensive climate control system for high tunnels• User monitors and controls the climate from touch screen PLC, laptop, or Smartphone• Ventilation, irrigation, and heating are monitored and controlled on-site or remotely • SVF awarded $100,000 USDA Small Business Innovation Research Grant • Testing at SVF high tunnels in both Minnesota and Wisconsin • Expected operational date: March 2011 • Potential SBIR Phase II Commercialization Grant in 2013
Solar Thermal Heating • Qualifies for 30 percent Federal Investment Tax Credit • Reduces active income tax liability• Solar panels collect heated air• Fans circulate heated air below ground• Warms soil and air temperatures• Extends growing season to allow for additional crops and harvests• Reduces propane fuel usage and greenhouse gas emissions
Online Produce Market• Web based e-commerce (operational on SVF website)• Provides up to date information on fresh produce for sale• Orders processed by credit card, check, or money order• Buyers communicate order notes to producer• Joint venture members given priority access to produce• Designed for wholesale buyers, restaurants, grocer co-ops• Open to registered users who complete a profile
SHARE-d Economic Benefits• Boost fruit and vegetable yields up to 400% compared to field grown produce• Steady, reliable supply of organic produce• Purchase produce at wholesale distributor rates• Harvest and deliver fruits and vegetables at optimum ripeness and flavor• Create a year round growing environment• Meet consumer demand on either end of the production curve when competition is lower and prices are higher• Harvest ≈ 95 percent grade A fruit and vegetables• Meet the increasing demand for locally grown produce• Grow healthier, safer produce with less risk of contamination• Cost effectively expand the scale of organic farming• Shorten shipping distances = lower freight costs• Create new regional produce
SHARE-d Environmental Benefits• Shorter distance to market cuts fuel usage• Solar power reduces carbon emissions• Drip irrigation conserves water• Natural compost replenishes the soil• Organic mulching reduces erosion• Synthetic pesticides and fertilizers eliminated• Crops protected from climate and weather extremes• Disease, pest, and insect control inputs reduced• Respond to water shortages in other regions of the country
Boosting Produce Yields SVF Weekly Determinate Tomato Harvest (2011) • Yields 4 typically 200- 300% higher 3.5 in high 3 tunnelsAverage marketable lbs per plant SVF High Tunnels • Our organic 2.5 determinate 2 tomato Total = 19.5 lbs per yields in 1.5 plant 2011 = 20 lbs 1 per plant • Established 0.5 goal of 25 0 lbs/plant in 7/15/2011 8/15/2011 9/15/2011 10/15/2011 2012 SVF high tunnels equaled yields at University of Minnesota Southwest Research and Outreach Center (SWROC)
Boosting Produce Yields• University of Minnesota conducting organic high tunnel study• Compares outdoor to high tunnel grown varieties• High tunnels in study SWROC 2009 Bell Pepper Harvest: High Tunnel vs. Outdoor did not utilize 6 Average marketable yield (lbs/plant) supplemental heat. 5 4 3 High Tunnel 2 Outdoor 1 0 Ace (green) Ace (red) Bell Pepper
Creating a Year Round SeasonSpinach Harvested on December 15th Ripe Gold Medal Heirlooms on November 4th Fall Bearing Blackberries on November 14th
Improves Produce Quality Tomatoes in SVF high tunnel High Tunnel Grown Outdoor Grown Tomatoes planted at same time in springHeirloom bell peppers in SVF high tunnel Summer blackberries in SVF high tunnel
A Menu of Produce Options• Agreement defines fruit and vegetable varieties and production periods• Joint Venture members select from a menu of warm and cool season crops• Members approximate purchasing needs prior to planting• Members given priority access to produce• Excess produce sold on the open market and income returned to joint venture• Certain types of produce (i.e., hybrid tomatoes and red bell peppers) highly profitable
Basic Structure of SHARE-d High Tunnels Scenic Valley Farms PartnersBusiness Entity Joint Venture Provides long-term, no-cost land, water and storage Funds construction of solar thermal or shed lease conventional high tunnel(s) Obtains organic certification Funds initial operating expenses Prepares site and plants crop Selects desired produce from a menu of options Constructs solar thermal or conventional high tunnel(s) Communicates approximate purchasing needs Installs climate control and irrigation systems Places weekly or bi-weekly produce ordersContributions Manages daily farming operations Manages marketing and distribution of produce to both partners and open market Manages accounting and payroll Prepares and distributes quarterly financial reports and Schedule K-1 tax documents N/A Investment Tax Credit (30%) on solar thermalTax Incentives Bonus Depreciation (50-100%) Negotiated wholesale ratesProduce Pricing Highest available on open market 25 percent of net income 75 percent of net incomeFinancial Rights Estimated 10-15% annual return on investment Remaining initial operating expenses disbursed SVF retains 1st option to purchase high tunnel(s) at 75 percent of original cost after 7-8 years of operationsDissolution before high tunnel(s) sold on open market (negotiable)