Last week, the markets responded favorably to the end of the pre-election frenzy – or at the very least, to the result of an uncontested presidential election. However, as of yesterday, stocks dipped slightly from the record highs set last week, with Reuters citing investor concerns around policy changes that may impact immigration, tax cuts, and inflation.
While there are (and will always be) challenges for investors and farmers to navigate, the headline for the CEA industry should be this:
People need to eat, and consumers will continue to seek out the efficiency and environmental sustainability that CEA-grown produce offers. This industry continues to grow, and the results of this election were never going to change that.
That said, here’s a few ways in which CEA may be affected by the results of the 2024 presidential election:
Overall investor confidence in markets may open funding opportunities for farmers.
Despite the aforementioned concerns, the overriding fear of uncertainty at the uppermost levels of our country’s leadership has been avoided. Investors, entrepreneurs, and workers alike will be eager to plot a course forward from the chaos of a challenging election cycle.
CEA advantage: Tariff policies will lead to rising costs, but will advantage US companies and consumers purchasing American-made products.
The exact effects of these proposed policies beyond general inflation may be unpredictable, one thing that is clear is that they are designed to benefit companies that manufacture and grow in the US. For example, AmHydro manufactures all of our equipment in the US. Farmers that grow clean food for their communities will be less affected than food companies that rely on imports, especially from China and Mexico.
Subsidies for green tech can’t be counted on. For CEA, they don’t need to be.
The role of federal subsidy will be an interesting economic storyline in the coming years, especially as pertains to planet-friendly investment. While projected policies raise concerns for investors in green energy, CEA growers are mostly funded privately. It would be fantastic to get a helping hand, but the industry so far has proven its viability without high levels of federal support.
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From 2020-2022, CEA was rocked by the news of high profile farm closures. These were over-leveraged, primarily indoor vertical projects that put mistaken confidence in the particularities of momentary economic conditions, and paid a heavy price.
Despite these misadventures, CEA, AmHydro and greenhouse hydroponic technology has continued to be viable and profitable for thousands of CEA farmers who pursued economically sustainable models and employed sound growing practices.
The point is that CEA and hydroponic farming has proven over and over to be economically sustainable in even adverse economic conditions.
We’ve learned from these lessons. We know we have a hungry planet to feed. We know that our communities both desire and deserve clean produce grown close to home. And while we’re certainly not advocating a head-in-the-sand approach to politics and the economy, we are confident that 2024 is still an ideal time to get into CEA.
As always, reach out with any questions and let our sales team know how we can serve your business at any scale as we look ahead to the coming year.
