Evaluating the profitability of high-value end products produced from spent mushroom substrate

Final Report for FNE12-763

Project Type: Farmer
Funds awarded in 2012: $4,730.00
Projected End Date: 12/31/2014
Region: Northeast
State: New York
Project Leader:
Joseph Rizzo, Jr.
Blue Oyster Cultivation
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Project Information


Indoor mushroom farms produce large amounts of a waste product known as spent mushroom substrate (SMS). The purpose of our project is to explore profitable uses for this spent mushroom substrate. We set out to determine spent mushroom substrate can be used to profitably produce compost worm castings and mushrooms of other species. We produced 299lbs. of finished compost from 1200lbs of SMS with a gross value of $448.50. The profit from this compost using a labor rate of $12/hour was $.53/lb. We also produced 1032lbs of worm castings from 1200lbs of a 75% SMS/25% cow manure mixture with a gross value of $2,580. The profit from the worm castings at a labor rate of $12/lb was $1.80/lb. Profit from the worm castings was more than 3x the profit of the compost.


Blue Oyster Cultivation is a 75-acre farm with 2 locations in Ithaca, NY. Our primary crop is cultivated oyster and shiitake mushrooms. We grow most of our mushrooms indoors using the bulk substrates of straw and wood sawdust. We also grow mushrooms outdoors on fresh logs. The farm also produces maple syrup and some vegetables. We predominantly sell our crops at farmers markets in Ithaca and New York City.

Our proposal is based on the desire to develop profitable uses for spent mushroom substrate. We feel the large amount of this “waste product” produced from mushroom farms can be used for further profit and can increase a small farm’s sustainability. Our project adviser is Monica Roth of the Cornell Cooperative Extension. Other collaborators include compost educator Adam Michaelides and cow manure was provided by Lakeview Farms.

Project Objectives:

The object of our project was to explore different uses for a major waste product of indoor mushroom production called “spent mushroom substrate (SMS).” We proposed that profitable products such as worm castings, live worms and fresh mushrooms of other species can be produced from spent mushroom substrate.


Click linked name(s) to expand/collapse or show everyone's info
  • Wendy Rizzo
  • Monika Roth


Materials and methods:

The following methods were used to produce compost from SMS:

We produced 2 batches of compost a year. This change from the originally planned 4 batches a year was an effort to minimize labor cost and increase batch size. Compost batches A and B were created in May 2012 using 2 bins filled with 300lbs of SMS each. Each batch was turned by hand every 3 weeks for 30 minutes. In November the compost was weighed and bagged and sold at our farmers markets for $1.50/lb. Batch A weighed 78lbs and Batch B weighed 72lbs. Each finished batch required 6 hours labor each to produce.

The following methods were used to produce the worms and castings from SMS:

In September 2012 10lbs of redworms (Eisenia fetida) were added to 400lbs of a 75% SMS/25% manure blend. At the same time 6lbs of European nightcrawlers (Eisenia hortensis) were added to 200lbs of a 75% SMS/25% manure blend. These 2 mixes were placed in our 4’x40’x1.5’ outdoor worm bed constructed using 2”x8”x12’ lumber. Ten lbs. of additional compostable material (mushrooms, greens, food scraps) was added every 3 weeks to the top of the mixture for supplemental nutrition. In October 2012 the material was collected and placed in plastic bins and brought indoors. In February 2013 the castings were separated and weighed. Four hundred ninety six lbs. of castings were collected. The castings were removed from the worms by shining a bright light on the surface of the material. This caused the worms to retreat lower within the material. Then a layer of worm free layer of castings was scooped from the top. This was repeated until the majority of castings were collected. The lowest strata of worm/casting mix were used to start the next batch of SMS/manure mix. In February 2013 the worms were added to a new batch of a 75% SMS/25% manure mixture in plastic bins. Ten lbs. of additional compost material (mushrooms, greens, food scraps) was added every 3 weeks. The mixture was kept in plastic bins until September 2013 when the castings were removed. Five hundred thirty six lbs. of castings were collected in September 2013. The castings were packaged and sold at farmers markets for $2.50/lb.

The fresh mushroom component of the project was unable to get off the ground. The 2 vendors I relied on for the initial cultures both discontinued the selected species.

Research results and discussion:

In calculating the results I thought it would be helpful to use 2 pay rates to calculate the labor costs. I used the $22/hour rate to calculate the project cost and a lower $12/hour hypothetical rate.   Over the course of the project we produced a total of 299lbs of finished compost from 1200lbs of SMS. The gross value of the compost at $1.50/lb. was $448.50. Twenty four hours of labor were used costing $528 @ $22/hour or $288 @ $12/hour. The net value of the finished compost was -$79.50 when labor costs were $22/hour and $160.50 when labor costs were $12/hour. In other words, when labor costs were $22/hour it cost the farm $79.50 to produce 299lbs of finished compost. When labor costs were $12/hour the farm made a profit of $160.50 on 299lbs of finished compost. In conclusion, at a labor rate of $12/hour the profit from finished compost produced from SMS was $0.53/lb. and a labor rate of $22/hour was -$.026/lb.

We produced a total of 1032 of worm castings using 60 hours of labor. The gross value of the castings at $2.50/lb. was $2,580. Sixty hours of labor were used costing $1,320 at $22/hour or $720 at $12/hour. The net value of the castings was $1,260 when labor costs were $22/hour and $1,860 when labor costs, were $12/hour. Profit from worm castings at $12/hour was $1.80/lb. and at $22/hour was $1.22/lb. In conclusion, we found that the worms responded well and thrived in bedding comprised of 75% SMS and 25% cow manure. Worm sales were sluggish, however, and we chose to reintroduce our worms to fresh bedding rather than removing and selling them. The casting production proved over 3X more profitable than simply composting SMS. Profit per pound of castings was $1.80 versus $.53 for compost. We conclude that producing worm castings from spent mushroom substrate can be a profitable alternative to composting.

Research conclusions:


Participation Summary

Education & Outreach Activities and Participation Summary

Participation Summary:

Education/outreach description:

One of the biggest source of outreach for our project turned out to be our farmers market display. With 5 markets a week, including 2 a week in New York City, our display reached more than 10,000 people a week. Our table staff regularly discussed our project with interested patrons.

Another component of our outreach was onsite tours, demonstrations and workshops. On September 12, 2012 Blue Oyster Cultivation hosted and taught a workshop called “Intro to Mushroom Cultivation.” The workshop was sponsored by the Center for Transformative Action and was attended by 30 participants. At this workshop our SARE project was described and used as an example of a potentially profitable use for spent mushroom substrate. In addition, we provided more than 10 small onsite tours to the public. This included a festival in August 2013 with over 30 attendees.

Additionally we shared project content on the Blue Oyster Cultivation Facebook page and the Twitter page @bocultivation. We also created the separate Twitter account @_i_got_worms_. The social media aspect reached over 1,000 followers.

Project Outcomes

Assessment of Project Approach and Areas of Further Study:

Potential Contributions

We conclude that producing worm castings is a worthwhile endeavor for mushroom farms. It can be a profitable addition that will help diversify a mushroom farm’s product line. In addition, it is a sustainable, organic approach to recycling mushroom farm waste products.

Future Recommendations

We feel that we partially answered the question we set out to study. We are disappointed that we were not able to secure our selected mushroom strains to grow on spent mushroom substrate. We are still curious as to whether SMS will support further mushroom growth using different species and we intend to further explore this idea as the strains become available.

We do feel that we answered the question of whether producing worm castings can be more profitable than simply composting SMS. We intend to continue the practice of producing both. The compost we produce will be used on the farm to expand our vegetable production. We will continue to sell our premium worm castings at farmers markets. We will also work to devise marketing strategies that better market our live worms. Perhaps partnerships with community groups, extension agencies or groups such as the Center For Transformative Action can be formed to host indoor worm composting workshops. These workshops can be settings to market the live worms.

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.