Indoor cultivation of mushrooms to diversify farm and test local markets

Final Report for FNC08-727

Project Type: Farmer/Rancher
Funds awarded in 2008: $3,699.10
Projected End Date: 12/31/2011
Region: North Central
State: Minnesota
Project Coordinator:
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Project Information


My parents own and operate Springside Farm, a 230-acre seasonal grazing cow-dairy farm in southeast MN, in partnership with my brother. They are currently milking around 100 cows, with the goal of increasing the herd to 150-200 milking cows. We also have the goal of diversifying operations. In keeping with that diversification effort, I have a separate business, Farm Girl at Large, where I raise meat and mushrooms on the same land base. I have hogs, chickens and beef raised for direct marketing. The hogs are purchased, raised for slaughter, fed on waste milk, feed and some pasture. I raise 50-100 chickens yearly for insect control around the barnyard, meat and eggs. The beef animals run with the dairy herd, as appropriate, or the youngstock, the dry cows, or occasionally by themselves. The management aspect of various enterprises and working on the same land but separate businesses has been entertaining. The mushroom operation is on the same land as well. I’m able to utilize the machinery and tools from Springside Farm, use areas and buildings unsuited for use for the dairy, and create a sustainable business that works in synergy with, but separately from the dairy.

We moved to the farm in 1993, when I was 12 years old, and I worked and lived there until I went to college in 2000, and worked on the farm summers thru 2002. Before my brother and I came home after college to work on/run the farm, my mother operated the dairy. Springside Farm has been a rotational grazing dairy since 1993. I’ve continued that tradition during my 2 years operating the farm, and Olaf (my brother now in partnership with my parents) is keeping the farm in grass and maintaining the sustainable practices we were raised with.


I want to grow shiitake, oyster and portabella mushrooms to diversify the farm, take advantage of by-products, and supply my local market with quality food. I want to diversify the sustainable agriculture enterprises on our farm in a way that brings whole farm planning into play and complements the farm’s specific resources and the farmers’ interests and abilities.

First, I wanted to see if I was able to do the work needed to grow mushrooms. Sometimes something that looks fine on paper doesn’t work in real life. I started out small, creating a small lab space and a two-shelf growing area. The initial cycle, from taking a sample of mushroom to grow out thru harvesting the first fruit went fine. The largest things I learned was that no matter how precise the directions, no matter how specific the pictures, nothing compares to having a mentor standing next to you helping you understand what is appropriate for mushrooms. Maybe a video with different samples would have been helpful, but part of the sense of what is growing well is actually smell. The appropriate smell of the mushrooms, with no mold, or undesirable bacteria is something that is difficult to convey with words or pictures. A hands-on class, with the mushrooms in all the stages of growth would be adequate for the smell and tactile learning. But having someone, in person, teach you is invaluable.

I won’t go thru my lab technique in excessive detail, because Stamet’s Growing Gourmet and Medicinal Mushrooms covers that completely, and is considered the “bible” for growing mushrooms. It’s really very good, although it’s certainly scaled for larger operations. Common sense scaling down worked well for the growing of the mushrooms, but the cost-effectiveness can be a problem if you scale too small. Too small is going to depend on the producer, but it is a caution.

It’s important to have a lab area free of critters, mold, and generally, anything you wouldn’t want in your kitchen as you are cooking. Much of the equipment for the first trial was stolen from the kitchen, because I wanted to see if it worked for me, and if I wanted to do it before investing in equipment solely for the lab space. I did decide to move forward with creating a lab area, to grow my spawn out from samples taken from mushrooms. I didn’t like that end of things; it fit poorly into my work load and personal preference. Time wise and resource wise, it may have been wise to persevere and keep creating my own spawn for inoculating substrate, but I ended up choosing to purchase spawn, and focus on the growing and marketing of the mushrooms.

There is room in the mushroom market for folk to grow and supply both spawn, inoculated blocks, and mushrooms; the market for the final product is huge. I personally chose to not enter the market with spawn cultivation, or inoculated blocks for people to grow their own mushroom gardens at home. I focused on fruiting mushrooms, and marketing them.

To grow mushrooms, you need a substrate for them to grown in. Anything with lignin will work for oyster mushrooms, but hardwood is best, and sometimes additives will increase your flushes. Flushes, or fruiting, refer to the body of the mushroom that you can pick and eat. The specifics of growing the mushroom are available in Stamets work; what I wanted to focus on with this grant was the feasibility of integration of this enterprise with the other enterprises on the farm and testing the markets in my very rural area.

In order to comment on the integration of my mushroom enterprise into Farm Girl at Large and Springside Farm, I do need to give some basic information about indoor mushroom cultivation. Outdoor cultivation works only in temperatures above freezing. Initially, I chose to work with indoor cultivation to give myself a project and potential income thru the winter months. Also, fresh food in winter months commands a premium; I wouldn’t be competing with the bounties of the regular growing season.

The test runs worked well; the flavor and form of the mushrooms were great. The markets I approached in Decorah, IA a food co-op and a restaurant; Minneapolis, MN, a restaurant; and in Lanesboro, MN, a farmers market; were all ready to buy all I could produce. In fact, I couldn’t keep up with production. Twenty to forty pounds of mushrooms a week was way beyond what I could reliably produce by myself, even with help. I couldn’t get near what they wanted, so I thanked the food co-op and the Minneapolis restaurant, but told them I couldn’t produce what they needed and backed out of that market to try to have regular sales to the restaurant in Decorah, and occasional sales at the farmers market when I had a large flush.

Transportation of the mushrooms doesn’t require much for extra handling. Coolers to keep them from freezing, and excessive (over 65 degrees) heat are important for peak freshness. However, they could easily ride in a refrigerated truck, or even in the frozen section in a pinch. The best way to store and sell them is in a plain brown paper bag, to maintain best quality, though it is more difficult to market something folk can’t see.

Integration into the current systems at Farm Girl and Springside have been mediocre on most fronts. However, I fully blame that on me, and my poor management. Working with family in a farming operation can be interesting and entertaining. When there are two very different styles of management, such as my brother and myself, the time and energy it takes to keep the farm running eat into the time to do anything else. The more established operations got more of my time, and the fledgling operation that needed all sorts of new equipment for an upgrade in production got sidelined. But there is still great potential for integration of by-products and “waste” from the different operations.

The two types of substrates I have used are straw and sawdust. Both have applications as bedding for animals, and spent straw substrate has some potential as a very small addition to pigs and chickens as a feed source. Coming from the other direction, and using different types of mushrooms that need manure to grow, you can bed down with straw in your chicken house, and then use the manured chicken bedding with horse manure to grow different types of mushrooms, and after growing the mushrooms, the substrate is very useful as compost/fertilizer for integration with the soil for growing vegetable matter.

My pa made me a wood fired stove instead of a propane burner to sterilize the substrate. It was a good choice, to be able to use local wood from the same source I can get the sawdust and chips from, and there are synergies that are helpful. It costs less than paying for propane, but the cost of getting the wood, and cutting and storing it were factors I didn’t anticipate accurately.

Growing to production size was something I didn’t do well. Due to a host of events in my personal life, I didn’t attend to things quickly enough to plan for winter fast enough. I had electrical issues, and my heaters were off for a night, and my entire production froze solid. The good news is I can start them again as soon as I warm things up, but I elected to wait for spring to start production again.

You can plan for flushes at certain times of the year, and then shut things down with only minimal care to be able to start producing again at your leisure. If you order all your spawn in, you wouldn’t have to do anything in your down time. If you have a lab, it would be to check on things once a week or so, until you want to start production again, and then go back to your regular schedule of lab and production work.

• Fred Finch, mushroom mentor
• GROWN Locally, marketing, distributing, co-op
• Lanesboro Local, year around market, sells for commission
• Vance Haugen, fabrication of machinery
• Ty Allchin, spawn producer

Quoted from the initial proposal “The results of my grant project will be measured in economic and social terms. The goal is to grow mushrooms in a retrofitted building, measured by completion of the retrofit, and the harvest of a mushroom crop. For the economic term, I will keep records to have accurate information on profitability. I will have current data from my local vendors on needed volume. After review of my blog, I will have weekly data to look at before and after mushrooms, in terms of job satisfaction, personal growth, contribution to the farm as a whole, and the local food scene. Within my blog, I will address how the operation fits into the workflow of the farm at large, and my specific duties as young stock manager. I will have the results of the field day, with a number of participants that attended. With successful mushroom production, I will increase the strength and diversity of my local food system and my farm, while working with local consumers to understand sustainable agriculture in general, and my methods in particular.”

I learned that I need to be a better businesswoman. I can farm, I can care for critters, I can grow mushrooms, I can market them, but the follow thru of daily coordination is very difficult. I’ve identified other issues with my style of work that caused problems. By wanting to re-use and repurpose buildings, materials and tools; or by sharing resources with the other operations, I put the mushroom enterprise at a disadvantage. Sometimes I should have just moved forward and bought specific tools more quickly instead of making do. The other struggle I had was deciding the scale I wanted to work on. To meet the demand I found, I would have to work on mushrooms exclusively. I don’t enjoy doing it that much. There has to be a balance between what you like and what you have to do pay the bills, but I didn’t find a good balance for the mushrooms. I didn’t have the support I anticipated for some aspects, and as such, failed to move forward as fast as I should have to make things happen for myself. That aspect has nothing to do with the mushrooms failing, and everything to do with accurate lines of communication and expectations and solid follow through. I liked working on a small scale with the mushrooms, but I tried to scale up, and in that scaling up, I took on too much for myself, beyond my technical knowledge. I attempted to retrofit a building, and got different pieces of advice from my mushroom mentor, my father and my brother, all engineers with different backgrounds. I wasn’t able to plot a solid way forward to my scaling up to production levels and fell flat on my face.

However, scaling up to production levels was outside the initial scope of this grant. I was able to grow test crops, enter the market, and see how this could integrate into a current farming operation.

The integration of indoor mushroom cultivation has tremendous potential. I feel it can be a solid enterprise in different farming operations. I tried to do as much as I could by hand, to minimize investment in machinery, or dependence on shared equipment. Operations accustomed to working by hand, like production vegetable farmers, might find it a better fit. The growth cycle is quite different than “green parts up” but the care and conditions needed are more similar, and could provide a better fit than large scale operations, where there are fewer hands and more large machines. However, I feel that animal operations that work by hand could very much benefit from the opportunity to get a crop from manured bedding, and be able to utilize it after the fact for fertilizer.

One way this enterprise would be of interest to other farmers in my area is that I cannot meet the demand. I enjoy working with livestock, and am not willing to exclusively grow mushrooms and give up my other work. The market is large enough to allow coordination with other farmers to grow the needed amounts for the potential market, or to let them grow on their own terms, and work with an aggregator, like GROWN Locally.

The problems I identified in my proposal at the outset are the same things I ran into throughout the project. I went to school for English, not business, not growing mushrooms. The mushroom cycle with regard to production and needs of the buyers is a perennial question of management, Mother Nature and circumstance. I was able to find raw materials that fit in well with the other needs of the farm, particularly heating with wood. I’d like to make that a tighter link in the future, since modern wood burners could provide more heat than I need, and I would like to share that cost, upkeep and expense with other operations. As a dairy, there is need of hot water every time we milk to clean the system, and that is generally twice a day. Keeping one wood burner stoked instead of two or three is a nicer proposition. It’s also much less expensive than electricity or propane. This is exactly the kind of thing I am pleased to have found by this project. Places where synergies between operations can be really helpful and profitable because of cost-sharing.

The profitability of the venture was, frankly, a loss, currently. Businesses can take three to five years to show in the black, or fold in the interim. I haven’t managed the various enterprises well enough to give the mushrooms a fair chance to pay their way. Personal issues, management issues all play a part in my problems. Stepping down as manager of the dairy allowed me to work with the mushrooms more, but the hand off wasn’t conducive to working tightly together on an emerging area.

A concern I have with recommending this type of enterprise for other farmers/producers is that each enterprise has challenges of its own, and figuring out a “sweet spot” to situate such a project is highly individual. I do think that smaller, already diversified farms might be best suited, but there is a concern of over work. Mushrooms can be left to their own devices, so planning only one season a year, during other down times could be appropriate. Year-long production might not be appropriate. Selling fresh produce isn’t a problem, but as soon as you try to preserve the crop (like drying it) you run into additional restrictions, which absolutely must be addressed.

I gave 5 or 6 separate individual tours of my facilities and operations, with one to 5 people in each group . The people contacted me via personal contacts, where I was just chatting about what I do, and from my customers. GROWN Locally was one group that toured initially, whom I invited, and am currently working with.

My field day was advertised in a three county area around the farm, in the local newspapers. It was attended by 50 some people. There was a reporter who attended the event, but she didn’t choose to run a story. I connected with an individual who is beginning his own production line; I will be his mentor, he came to my field day. A second individual I met through other work is also beginning mushroom exploration; I will also be his mentor.

Intermediate data that isn’t really gathered into a useful form, but displays some of the everyday challenges are available on my website, in my blog area, under Mushrooms: The Boring Bits or MBB. Final project data will also be displayed at, along with some pictures taken during the project.

Text from a press release:


Fresh and local are the current buzz words when buying food. In cooler climates many people think it is only in the summer months that we can buy foods grown by our neighbors, but that isn’t the case. Mushrooms are a great local food source. Inga Haugen, a local oyster mushroom grower near Canton, Minn., wants people to see the type of produce they can buy. She is hosting an Open House from 1 p.m. to 5 p.m., Saturday, Oct. 29th at her farm at 12620 Deer Road, Canton.

People will see the indoor production area Inga uses to produce oyster mushrooms year-round, as well as equipment in use as she will demonstrate the whole process during the event. From steaming sawdust to harvesting the product, if you’ve ever been curious about fungus, come and see!

The mushrooms are currently sold thru Lanesboro Local, GROWN Locally, and directly to the consumer. The restaurant; Optimo Farm Market, Restaurant and Cafe of Viroqua, WI; has used the oyster mushrooms Inga grows.

“Farm Girl at Large oyster mushrooms are among the tastiest that I’ve ever tried. As a mushroom guy, I appreciated that they were very fresh mushrooms, tasty and flavorful! It’s nice to be able to buy and eat more of them anytime.” John Grabko of Historic Forestville and Historic Adventure Travel and Tours, based out of Spring Valley. Loni Kemp, of Kemp Consulting, Canton, MN says, “These locally cultivated mushrooms are wonderful. Just a few bring an ordinary omelet to a whole new level. And they taste divine. They are packaged just the right way for best storage in the fridge-- a brown paper bag. Outlasts the plastic wrapped trays of commercial mushrooms by many many days.”

For more information please contact Inga Haugen at 507-246-6848, [email protected], or visit

To reach the Open House, get to the intersection of 52 and 44, (which is between Canton and Mabel) and go North on the gravel road Dove for .6 of a mile. Turn right onto Deer Road. Go 1.5 miles on Deer; as you drive it, you will take a curve to the north, stop at a stop sign, cross a small bridge, and at the top of the hill, turn right into the driveway. There will be signs as well.


Participation Summary
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.