Augusto Canales
EGADE Business School Tecnologico de Monterrey
Consuelo Garcia-de-la-torre
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As a general system, hydroponics is an agricultural technique which eliminates the use of soil and instead employs only water to grow crops. In particular, producing green grass forage for cattle by means of hydroponics is an effective, cost- and resource-saving alternative. It allows ranchers to provide better care for their livestock by generating a constant food supply, while using merely a small fraction of the water required by traditional agricultural methods.
Hydroponic techniques have been around for many centuries, but Hidroponia Monterrey brings the system to Mexico, develops new innovations and mechanisms, and applies them to the single-family and single-community agricultural structure prevalent in the Mexican countryside. They have innovated in adapting this ancient technique to grow green grass forage for cattle, a subset of the method essentially unknown and unused in Mexico, making the company a leader in its application.
Through this innovation, greenhouses yield 1 ton of forage per day in a 100 square meter setting – a space not much larger than the average living room. Water requirements are dramatically reduced to 5-10% of open-field standards. And the end cost for the user is roughly $1.20 MXN per kilo, compared to $5.50 MXN per kilo of grain fodder available on the market. Even considering cattle consume green grass forage on a 2 to 1 ratio to grain fodder, ranchers still see their costs cut in half. Small operating margins and adverse conditions such as droughts and frozen crops become much more bearable with the greenhouse support system.
Mr. Valdez vividly recalls how the idea for bringing hydroponics to Mexico was originated out of experience and need. His father, Mr. Ramón Valdez an Agricultural Engineer by profession, began inquiring about this method in an attempt to develop a business. He studied novel applications developed in numerous regions in Europe and drew inspiration from the highly-specific purpose hydroponics was frequently given in the US: provide nourishment to purebred racehorses. He also employed his vast knowledge to develop the first projects and targeting them to single-family “ejidos”. His activities quickly evolved into establishing standard procedures, a concrete business model, and offering training courses. Hidroponia Monterrey was well under way to expand as an idea and a business.
Then in 2013 a major drought hit vast regions in Mexico and great need rose among “ejidatarios” or ranch owners. The effects of minimal rain were striking the livelihoods of thousands of families especially hard. Cattle, the main source of food and trade for many of them, was suffering from scant amounts of water and barren grazing lands. Feeding stock was in many cases expensive beyond the means of the average family. A large number of cows, sheep and goats were quickly dying.
Ranchers found Hidroponia Monterrey as they desperately began looking for alternative, more affordable sources of food for their cattle. Greenhouses were built at breakneck speeds across different areas of Nuevo León, Chihuahua and Sinaloa, among other states. Green grass forage was hurriedly produced and immediately fed to the cattle, which showed stark health improvements. A dire situation was forestalled, and the seed of hope was settled in the minds of ranchers and Hidroponia Monterrey.
Great challenges such as these, added to great innovations made by the team at Hidroponia Monterrey have left a deep and indelible mark in the lives of individual families, in the livelihoods of entire communities, and in the prospects of agricultural progress in Mexico. As Mr. Valdez puts it: “we don´t see it as selling a system to someone, but as saving livestock”. In doing so, they are accomplishing much more.
Once the initial hesitancy to implement hydroponic techniques is overcome, farmers have time and again secured major benefits. Food for cattle is locally produced at half the cost they would find elsewhere. Animals receive constant rations of nourishment as grass is produced by system and not by chance. This nourishment is also of the cleaner, higher-quality kind, providing benefit for the animal and for the consumer.
As hydroponic-system greenhouses are spread across several communities, a real state of stability begins to take hold of a significant sector of the local economy. No longer is the source of food scarce and unpredictable. Ranchers can efficiently use the limited resources available to them -water, land, labor- to establish continuity to their economic endeavors and provide greater robustness to their families and their communities.
Technology directly permeates the agricultural sector, predominantly run by small farmers and ranchers, by bringing facilities and assets to areas where they were previously unheard-of. Ranchers, greenhouse supervisors, and laborers all increase their human capital by receiving periodic training in the techniques of hydroponics. Skills required to run the system are acquired by all involved. And the success stories of resources saved, properties kept alive, and livelihoods improved reach many more communities and start shaping the future of agriculture in Mexico.
Hidroponia Monterrey is constantly providing their set of services to ranches and families. They bring their materials to site, build the greenhouse from the ground up, and set the hydroponic system entirely. They then provide the raw materials required to begin production and train operators in the foundational techniques. A profitable business is now run on these activities.
It was different 10 years ago. When Mr. Valdez and his father began installing these systems, low demand, resistance to adaptation of the technology, and insufficient knowledge placed the company in tight financial circumstances. Training and coaching services filled the gap early on at times when greenhouse construction was slow and brought in vital funds for continuity. As it would turn out later, these knowledge transfer sessions were instrumental in expanding the network of suppliers, clients, investors and social outlets.
By the year 2014, as a result of fine-tuned innovations in green grass forage hydroponic techniques, commercial efforts by Mr. Valdez, word-of-mouth recommendations by ranchers, and even the challenging circumstances of the 2013 drought, Hidroponia Monterrey became a solid, profitable company which now employs 40 members of the Vistahermosa ranch, has installed more than 200 greenhouse systems, and expanded into producing a handful of niche-market crops such as lettuce and habanero peppers. The company's leadership now eagerly looks ahead to the next 5-10 years as they draft plans to grow their home base, bring their technology to new communities and expand into new specific, high-end vegetables. They are working so these new, diverse business undertakings paired with their specific know-how, give the company an edge over the competition in years to come.
Their infrastructure sourcing and crafting system, the production means employed, the technology transferred to communities, along with their current and forthcoming commercial projects shape a remarkable value-chain ecosystem. Hidroponia Monterrey does not build greenhouses and leave the ranchers to their own devices: they train them. The company knows assets are required to run the setting efficiently: they provide them. They've identified niche-market opportunities for specific vegetables: they grow and supply the crops. The value generated along the chain – from source to end-user – is integrated coherently in a distinct structure.
Developing one of these hydroponic-type greenhouses in an “ejido” has deep, meaningful and lasting social effects. The most dramatic of these are of the kind revealed in the 2013 drought. Ranchers were at wits end in saving their cattle´s life – and their families´ livelihood. Losing their animals meant immediate economic losses and diminished prospects for the future. Yet, by installing a greenhouse system and learning the skills necessary to run it, they effectively acquire a solid foundation for economic stability, without running most of the risks associated with new capital investments. In the words of Mr. Valdez, Hidroponic Monterrey has “already risked, tried, and failed so the rancher doesn't have to.”
Around 40 of the 200 inhabitants of the Vistahermosa work for Hidroponia Monterrey. They have a steady source of income, an employer which provides otherwise unavailable basic, law-established health coverage, and one more reason to protect their communities.
But perhaps the deepest, yet intangible benefits hydroponics have brought to these communities are both the technical skills needed to successfully run and care for a greenhouse, and the new mindset it instills in the newer generations. As workers continually learn and practice, they acquire valuable skillsets, both technical and competency-oriented. Old paradigms on many other areas of work are replaced by new, more appropriate practices.
Company and community care for environment and resources as they use hydroponics to progress economically. This method of crop production uses a fraction of the water and land vis-à-vis traditional agriculture. In a hydroponic setting, soil is disregarded, and water becomes the only medium by which plant growth is generated. And even when water is used intensively, a mere 10%-15% of this valuable resource is required in niche-market crops as compared to amounts used in regular agricultural practices. In green grass forage production, the use of water drops to less than 5% versus standard methods. All of it is then reincorporated into the process and only trace amounts are lost.
Benefits of better water use could be a game changer in Mexico if the agriculture sector adopts hydroponic systems and techniques more extensively. Recommendations and strategies for saving water are usually targeted at urban, household, commercial, and even industrial stakeholders, yet they account only for 10% of the total consumption. The other 90% is used in agriculture. Yet, by some estimations, only 5% of the entire sector employs water-saving methods. Potential for profound change is readily attainable.
Land also becomes more productive. This technique requires barely a small room to work at full capacity, whereas traditional practices require immense land extensions to produce the same results. Ranchers have large sets of land, but not big enough to compensate for the small margins obtained in farming and livestock-raising activities. Mr. Valdez affirms they are able to use the very little land and water ranchers have to generate great results.
Fertilizers and pesticides are applied according to best practices and certification standards. Natural versions are given priority over the chemical ones, but in any case, they are placed in the system strictly adhering to safety and quality standards and to the manufacturer's user guide. The closed-structure nature of hydroponics allows for a much more controlled use of these aids and reduce the risk of external contamination.
Renewable energy sources are extensively used in greenhouse installations, in many cases, out of necessity. Electrical grids on frequent occasions are not available where the greenhouse is needed, so solar panel grids are installed to generate the power required to run the system, increasing its self-sustainability. Back in 2013 at least 70 of the 200 systems put in place required the use of solar panels.
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Hidroponia Monterrey is a company operating in the Vistahermosa “ejido” or ranch, close to the town of Linares in the Mexican state of Nuevo León. Its core business practice is the production of green grass forage for livestock by means of hydroponic-system greenhouses, either at their headquarters or by building and setting them up on site and training local operators. Mr. Luis Valdez, its CEO, oversees the company´s overall wellbeing as it brings meaningful benefit to ranchers and their families, promotes the sustainable use of available resources, and encourages the adoption of more productive practices across the country.
