What is FarmBot’s Return on Investment?

Many people think that having an expensive piece of farming equipment like FarmBot at your home will never pay for itself – that we would all be better off financially by simply buying fresh veggies at the grocery store. In this post we’ll look at the financial costs associated with purchasing veggies at the grocery store vs owning and operating a FarmBot at your home. First we’ll run the numbers with FarmBot Express (1.2 x 3m) and then look at how the return on investment calculations apply to Express XL and Express MAX.

There are many assumptions we’ll be making in this analysis. Most assumptions are linked to a source at the bottom of this page for where we found the information while others are just realistic guesses. Guesses are marked with an asterisk. For your specific use case, you may want to adjust some of these assumptions and run the numbers yourself to gain a more accurate understanding of the economics of FarmBot and you.

Analyzing Direct Costs

From our analysis of how much food FarmBot can grow, we’re going to work with a yield of 1 cup of veggies per day per square meter [1], or 30 cups/month/m². Because Express covers 3.6 m², that means it could yield 108 cups/month. The table below shows the monthly direct costs of producing this much food with FarmBot vs buying an equal amount at the grocery store.

Using the data above, one would save approximately $45/month, or $540/year in direct costs by growing their own veggies with FarmBot Express vs buying them at the store. If FarmBot Express costs approximately $2,000 (kit + shipping + taxes + supporting infrastructure + soil, etc) then this would indicate a return on investment period of under four years. However, this is not a complete picture because it does not take into account indirect costs such as fuel consumption when traveling to the store, the time required to shop for veggies vs harvest them from FarmBot, or the social cost of CO2 emissions. So let’s look at what the cost savings and ROI of FarmBot Express are when taking into account indirect costs as well.

Considering Indirect Costs

Many of the indirect costs in this calculation are based on valuing a person’s time. We’re going to use an hourly rate from an average middle class person making $50,000/year, or $25/hour. We’re also going to go out on a limb and suggest (based on conversations with FarmBot customers) that most people will be using FarmBot to grow vegetables with organic practices. Thus, the $0.50/cup cost of veggies we used in the table above needs to be adjusted to level the playing field. Because organic food sales account for less than 5% of all food sales in the US [6], we can assume that the $0.50/cup price is largely reflective of conventionally grown produce. So let’s tack on a premium of 30%, or $0.15/cup to account for going organic. A few other notable assumptions include using a 25 MPG vehicle for travelling to and from the store, and using a social cost of CO2 emissions of $220 per metric ton [9].

With these numbers, one would save approximately $105/month, or $1,250/year by growing their own veggies with FarmBot Express vs buying an equal amount at the store. If FarmBot Express costs approximately $2,000 (kit + shipping + taxes + supporting infrastructure + soil, etc) + another $100 for installation time including building the raised bed (4 hours at $25/hour) then we’re looking at a total investment of $2,100. Thus, FarmBot Express could have a return on investment period that is less than two years.

Scaling up Reduces the ROI Period

Now that we have calculated a rough return on investment period for FarmBot Express (1.2 x 3m), let’s take our model and apply it to FarmBot Express XL (2.4m x 6m). FarmBot Express XL can tend to 4x the growing area of FarmBot Express, so let’s assume that all of the ongoing costs (seeds, water, electricity) as well as the yield will be quadrupled. Meanwhile we’ll project the setup time, embodied energy, and initial cost to be 50% more than the smaller sized device. We'll double the time we dedicate to harvesting, but we’ll keep the theoretical time spent at the grocery store to be the same. And here are the numbers for FarmBot Express XL:

Scaling to the MAX

Now let's see how things change when we take FarmBot to the limit and go with an Express MAX device. Express MAX covers three times the area of Express XL, so we'll scale the same factors by three more this time. We'll keep the seeds factor constant though, because at this point you're probably buying bulk seeds and the cost will be pretty low.

References

1. farm.bot/pages/yield

2. USDA Economic Information Bulletin 71

3. pvwc.org

4. npr.org

5. farm.bot/pages/footprint

6. ers.usda.gov

7. ers.usda.gov

8. newsroom.aaa.com

9. eenews.net