Key Takeaways

Why Crop Selection Is the Highest-Stakes Decision in Indoor Farming

Crop profitability is the foundation that every other indoor farming decision rests on. Facility design, lighting configuration, labor planning, market strategy, and capital requirements all flow from one question: what are you growing, and can you sell it for more than it costs to produce? Yet many operators make crop selection decisions based on incomplete data—manufacturer yield claims, anecdotal pricing from other markets, or simple enthusiasm for a particular crop—rather than rigorous profitability modeling.

The indoor farming crop profitability calculator framework below provides the benchmarks and methodology operators need to make this decision with confidence. It covers revenue per square foot by crop category, cost per pound analysis, crop mix strategy, seasonal pricing dynamics, channel profitability, and a sample model for a hypothetical 10,000 square foot facility. How to Calculate ROI for an Indoor Farm: A Step-by-Step Framework

Revenue per Square Foot: The Starting Point

Revenue per square foot of growing space is the metric most operators start with when evaluating crops, and for good reason—it quantifies the earning potential of the facility’s most constrained resource. Annual estimates by crop category paint a clear picture of where the revenue potential lies.

Microgreens lead the field at $25 to $50 per square foot annually. The economics are driven by fast growing cycles (7 to 14 days from seed to harvest), premium pricing ($15 to $50 per pound depending on variety and market), and dense planting that maximizes production per square foot. The tradeoff is labor intensity—microgreens require significant handling during seeding, harvesting, and packaging—and shelf life is shorter than most other indoor crops. Microgreens: The $50/lb Crop That’s Saving Vertical Farming

Herbs, particularly basil, generate $25 or more per square foot annually. Basil benefits from continuous harvest capability, strong year-round demand from both retail and foodservice channels, and relatively straightforward growing requirements. Other herbs—cilantro, mint, chives—can supplement the mix, though demand volumes and pricing vary more than basil.

Specialty lettuce varieties generate $15 to $25 per square foot. The economics depend on achieving consistent quality and steady throughput—lettuce is the volume anchor for many indoor farms, providing reliable demand and consistent cash flow even if per-unit margins are lower than microgreens or herbs. Commodity greens (standard romaine, iceberg alternatives) occupy the lower end at $10 to $15 per square foot—a volume play with thin margins that only works at significant scale with highly efficient operations.

Strawberries represent a special case: premium pricing ($5 to $12 per pound for indoor-grown) but higher input costs, longer growing cycles, and more complex environmental requirements. Revenue per square foot is highly variable and depends on achieving the yield consistency that companies like Oishii have demonstrated is possible but that many operators find difficult to replicate. 5 High-Value Crops That Actually Make Money in Vertical Farming

Cost per Pound: Where Profitability Lives

Revenue per square foot is meaningless without corresponding cost per pound data. A crop that generates $40 per square foot but costs $38 per square foot to produce is less profitable than one generating $20 per square foot at a cost of $12. The margin between revenue and cost—not the top-line number—determines profitability.

Cost per pound varies dramatically by crop, driven by five primary factors. Energy costs differ based on light requirements—crops with higher DLI targets consume more electricity per pound produced, and the difference between a low-light crop like lettuce and a high-light crop like strawberries can be substantial. Labor costs vary with harvest intensity—microgreens and herbs require more handling per pound than lettuce. Consumable costs (seeds, growing media, nutrients, packaging) differ by crop and can represent a meaningful share of total cost for premium varieties. Growing cycle length affects throughput—faster cycles mean more harvests per year from the same square footage. And post-harvest handling requirements (washing, sorting, packaging, cold chain) add costs that vary significantly by crop type and market channel.

The Crop Mix Decision: Diversification as Strategy

The most profitable indoor farms do not grow a single crop. They grow a carefully selected mix that balances high-margin specialty products with reliable-volume staples. This is not just a revenue optimization strategy—it is a risk management discipline.

A facility that grows only microgreens is vulnerable to a single market disruption—a new competitor entering the local market, a shift in restaurant demand, or a pricing correction in a category that has seen significant supply growth. A facility that balances microgreens with basil and specialty lettuce has three revenue streams, three customer bases, and three demand cycles that do not move in perfect correlation. When microgreen pricing softens, lettuce volume holds steady. When a restaurant account reduces herb orders, retail lettuce demand fills the gap.

The optimal mix depends on three facility-specific variables: local market demand (what buyers in your area actually want and will pay for), facility configuration (some growing systems are better suited to certain crops), and operator expertise (growing high-quality microgreens requires different skills than growing consistent lettuce). The best approach is to start with demonstrated demand—secured or near-secured buyer commitments—and build the crop mix around confirmed revenue rather than theoretical market opportunity.

Seasonal Pricing: Timing Production for Maximum Value

Indoor farming’s core advantage—year-round production regardless of weather—creates an inherent pricing opportunity that many operators underexploit. Outdoor produce supply drops during winter months in northern markets, and indoor-grown premiums peak when field-grown alternatives are scarce, being shipped from distant regions, or unavailable entirely.

Smart operators align their highest-value crop production with these peak pricing windows. This might mean increasing microgreen and herb production during November through March when premiums are highest, while shifting more capacity to lettuce during summer months when outdoor competition suppresses specialty pricing. The revenue impact of seasonal alignment can be 10 to 20 percent on an annualized basis—a meaningful improvement that requires no capital investment, only production planning discipline.

Channel Profitability: Where You Sell Matters as Much as What You Grow

The same crop sold through different channels produces very different profitability. Direct-to-retail relationships typically offer the highest margins—retailers value supply consistency and local sourcing, and the pricing reflects that value. Foodservice (restaurants, corporate dining, institutions) provides volume and predictable demand but generally at lower per-unit prices. Direct-to-consumer channels—farmers markets, CSA boxes, online sales—can command the highest prices but carry significant distribution costs and time investment that reduce effective margins.

The most resilient revenue models combine channels: a retail anchor providing steady volume, foodservice accounts providing predictable demand, and selective direct-to-consumer sales capturing premium pricing on specialty items. Channel diversification, like crop diversification, is a risk management strategy as much as a revenue optimization tactic.

Sample Model: A 10,000 Square Foot Facility

Consider a hypothetical 10,000 square foot indoor farm allocating 30 percent of growing space to microgreens, 30 percent to basil, and 40 percent to specialty lettuce. Using conservative mid-range revenue estimates: 3,000 square feet of microgreens at $30 per square foot generates $90,000 annually. 3,000 square feet of basil at $25 per square foot generates $75,000. 4,000 square feet of specialty lettuce at $18 per square foot generates $72,000. Total projected revenue: approximately $237,000 per year.

Against this revenue, a realistic operating cost structure might include energy at $55,000 to $70,000 (depending on location and efficiency), labor at $65,000 to $80,000, consumables at $25,000 to $35,000, and overhead (rent, insurance, maintenance, distribution) at $30,000 to $40,000—total operating costs of $175,000 to $225,000. The resulting operating margin of $12,000 to $62,000 illustrates why precision in both revenue and cost assumptions matters enormously—and why conservative modeling is essential.

This sample model uses simplified assumptions. Real-world profitability depends on dozens of variables that interact in complex ways—which is why modeling tools that allow operators to adjust inputs and see downstream effects are invaluable for pre-build planning. AgEye’s free Crop Profitability Tool at ageye.tech lets you model these variables for your specific facility and market conditions.

What This Means for Growers

Crop profitability is not a number to be calculated once and filed away. It is a dynamic variable that changes with energy prices, market conditions, seasonal demand, operational efficiency, and a dozen other factors. The operators who succeed are the ones who model their economics rigorously before planting, track actual performance against projections continuously, and adjust their crop mix and channel strategy based on real data rather than assumptions.

The single most important discipline is knowing your numbers before you plant—not after. Every crop in your mix should have a documented cost per pound, a validated selling price by channel, and a clear margin that justifies the space it occupies. Crops that cannot demonstrate positive contribution margin should be replaced by ones that can. That discipline, more than any single technology or strategy, is what separates profitable indoor farms from those that produce beautiful food at a loss.