AppHarvest (Nasdaq: APPH) expects all three of its new high-tech indoor farms will be producing crops by the end of the year.
The company announced Tuesday it has completed calibration of its “touchless growing system” for salad greens at its 15-acre Berea, Kentucky, indoor farm by having successfully grown more than 20 varieties of lettuce, according to a news release. Its 30-acre indoor farm in Somerset, Kentucky, is 80% complete with planting, and has the capacity to grow about one million strawberries.
As its flagship facility in Morehead, Kentucky, prepares for its third tomato harvest, AppHarvest is continuing construction on its 60-acre Richmond, Kentucky, farm, which will double the company’s capacity to grow tomatoes.
Combined with Morehead operations, the Richmond facility is expected to enable the company to grow about 1.5 million tomato plants per season that continuously produce for more than 10 months of the year. The AppHarvest Richmond farm is expected to start producing before the end of 2022.
“With a laser-like focus on core operations, the AppHarvest team across the board is delivering on its commitment to complete the largest controlled environment agriculture build-out in U.S. history this year,” said AppHarvest Chief Operating Officer Julie Nelson in the release. “We literally expect to reap the fruits of our labor starting in the fourth quarter.”
The AppHarvest Berea Farm is expected to be the world’s largest high-tech farm for autonomously harvested salad greens with the latest “touchless growing system” by Green Automation. The hands-off system helps to improve both food safety and efficiency. To calibrate the touchless growing system, the company has successfully grown more than 20 types of salad greens, which go from seed to maturity in about three to four weeks depending on variety. AppHarvest expects commercial shipments from the Berea facility to start in the fourth quarter.
The AppHarvest Berea farm's growing environment leverages sunshine and rainwater and is automated for lighting, humidity and temperature. The farm uses a closed-loop irrigation system, which enables expected water savings of up to 90% compared to open-field farming and allows for precision dosing of nutrients, resulting in far less use of fertilizer compared to open-field farming while avoiding pollution from agricultural runoff, the release continued. As I reported last month, AppHarvest recently got $50 million in capital via two loans for the completion of the Somerset facility.
AppHarvests net sales in the second quarter were $4.4 million on 6 million pounds of tomatoes sold with a net sales price of 72 cents per pound versus net sales of $3.1 million on 8.6 million pounds of tomatoes sold with a net sales price of 36 cents per pound in the second quarter of 2021, representing a nearly 40% increase in quarterly net sales year over year.
AppHarvest currently sells to the top 25 national grocery store outlets as well as to select restaurants and food service providers through its distribution partner, Mastronardi Produce. It is also working with Mastronardi to establish a FarmCo joint venture under which AppHarvest could benefit from a broader national footprint and additional network scale.
The companies are in exclusive discussions with an institutional investor who has expressed interest in becoming a partner in FarmCo, according to a second quarter earnings release. While considerate due diligence and negotiation of terms is still outstanding, if a FarmCo transaction can be completed, it could have the benefit of securing additional capital for adding farm acreage, the release states.
As of 1 p.m., AppHarvest shares were trading at about $2.12, up more than 6% from the start of trading Tuesday.
