As Medicine Hat faces a reprieve from extreme cold temperatures, greenhouse owners and operators reflect on how increasing operation expenses – such as gas and electricity – affect their businesses.
“The rising costs of gas and electricity and the addition of the carbon tax … has made it extremely costly to operate greenhouses in the fall/winter and a real struggle for any product grown in greenhouses during this time frame,” a representative from Suntaira Growers Inc. told the News.
Another local greenhouse owner who wished to remain anonymous told the News “it’s pretty stressful.”
Representatives of Big Marble Farms – one of Medicine Hat’s largest year-round greenhouse operations – agree greenhouses have been hit by the rising costs of energy and gas.
“I think, in general, rates for electricity and natural gas went up noticeably the last number of years (and have become) a big factor for us concerning how we modify our operations to match those costs,” David Hoekstra, general manager of Big Marble Farms, said. “There’s no doubt about it, (cost increases) have affected us and especially a lot of smaller (greenhouse operations) in town, or conventional greenhouses. They’ve been very, very much affected by these rates,” said Hoekstra.
To try to offset the increases, Big Marble Farms has invested in sustainable technology and on-site energy generation, such as co-generators and energy screens, but cold weather has an inescapable effect on prices.
“Ultimately, there’s just no way around it, winter-months production costs a lot more than the summers,” said Jonathan Schow, Big Marble Farms’ vice president of sales and marketing. “When you think about some of the inputs that go into production and getting product to the grocery store; freight is generally more expensive in the winter, labour is more expensive in the winter.
“(In terms of operation), we have lights we turn on generally only in the winter to supplement that extra light that’s lost from the summer months. And then of course with cold weather. Whenever you have cold snaps like we’ve seen the past couple of weeks and it gets down to -40 degrees, sometimes -45 degrees, those plants don’t respond well to those sort of shocks, so we’ve got to crank the heat.”
“Also, production is lower in those winter months,” he said. “You can see a potential of 60 to 70 per cent yield off of the same crop in the winter as you would in the summer.”
Increased prices and reduced yield usually results in higher prices for consumers.
“Anything that’s grown inside a controlled environment in the winter in Canada is going to cost a lot more to produce and therefore they’re going to see the effects of that increased cost in the winter on their grocery bill,” said Schow. “It’s not because the grower is trying to gouge the consumer, they’re just trying to keep local produce on the shelves and the only way we can do that is by increasing retail price because the cost of production is increasing during those months.”
Schow and Hoekstra understand these increased prices can be stressful for consumers who are dealing with widespread commodity inflation.
“You’re always going to see competing produce coming from foreign countries,” said Schow. “We have to be cognizant of those options and respectful to the consumer if they decide to go for those options because we don’t know what their budgetary constraints are.”
Nonetheless, Big Marble Farms has seen an uptake in local product purchasing.
“Surprisingly enough the volume that we’ve seen come through here in the winter and summer months throughout the 2020/21 years are unprecedented,” said Schow. “We’re seeing double-digit percentage increases in the amount of produce we’re actually moving locally. So that really speaks to the consumer being aware … We just want to make sure we’re doing what we can do give people that local option.”
KENDALL KING, Local Journalism Initiative Reporter, Medicine Hat News