Economic analysis of oyster mushroom production in an unused poultry house

Final Report for FNE13-786

Project Type: Farmer
Funds awarded in 2013: $8,849.00
Projected End Date: 12/31/2013
Region: Northeast
State: Delaware
Project Leader:
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Project Information


Mr. Sagram has owned an empty house over the years after huge losses in poultry business, and he picked mushroom as the best option fitting in empty poultry house to grow as an alternative agriculture enterprise to earn income. But he was not sure if growing mushrooms in such an empty house is good or not. Therefore, Sagram wanted to have economic study with the support of SARE farmers’ grants by growing oyster mushrooms in a section of his poultry house. Once his application was approved, Sagram bought oyster mushroom kits to be grown from Kennet Square at Pennsylvania and he suspended those 18 pounds weight kit bags over the poultry house ceiling and he maintained temperature around 70oF and relative humidity 90 percent respectively by misting water over the bags and moistening straw floor. He picked first flush 15 days after introduction of those kits and second flush he picked 30 days and third flush he picked 45 days and last flush he picked in 60 days of Introduction of mushroom kits. Total he picked 1208 pounds mushroom worth of $6000.00.


Ram Rattan Sagram is currently living in the Seaford, Delaware with his wife. He owned five acres of land where he has grown Asian origin vegetables, raised swine and small flocks of chickens but has kept an empty poultry house-18,450 sq ft- over the years after huge losses in poultry business. During 2012/2013, he picked mushroom to grow in such empty house as an alternative agriculture enterprise to earn some income after long deliberation with extension professionals in the Cooperative Extension at Delaware State University. Later on, he was able to receive farmers grant from SARE to learn in production and marketing during 2012/13 with the help of his Technical Advisor, Lekha N. Paudel, Farm Management Specialist at Delaware State University. His interest has always been to learn in growing such enterprise and build own marketing network for sustainability. Now, he has learnt some production and marketing issues so that he will be a good entrepreneur in the future. This project has become an instrumental to know consumers preferences and other requirements that could go along with mushroom business. For instance, he grew only oyster mushroom and tried to reach whole food markets, local Asian grocery stores and some restaurants. All those places wanted other varieties of mushroom for which he has to learn further because shiitake, portabella, and button mushroom all have different production requirements and different market opportunity. In future, he will try to grow all these varieties to meet the market needs to hook customers. He wants to advise readers two issues if someone is planning to start such business: one need to have some sorts of market study to gain idea about customers’ preferences and possible market opportunity; one need to build a walk in cooler to protect such a delicate products otherwise it will be deteriorated very fast in a couple of days due to heat. He said others- once you find your market start production all major verities in small quantity so that you will not have great loss in adversary too.

Project Objectives:

His objectives were: (1) to know cost and return from oyster-mushroom production in unused poultry house; (2) to build own market for sustainability.


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  • Dr. lekha paudel


Materials and methods:

Mr. Sagram bought 225 readymade oyster mushroom substrate bags or kits (each of 18 pounds weight), 125 bags on May 15 and 100 bags on last of July, 2013, from Mushroom Specialty House, Kennet Square, PA and brought to his house. Mushroom substrate bags were suspended over the poultry house ceiling as shown in the figure. Sagram carried out day-to-day operations. Two weeks after hanging the substrates, fruiting were ready to pick. Sagram and his wife picked the mushrooms. They kept them in crates and store the products in the walk in cooler at 35-400F. He delivered harvested mushrooms to local restaurants, farmers markets and Asian vegetable market and whole food stores. In the beginning, he used available cost information in pricing to sell his product. He tried to differentiate his product as locally grown by labeling. He passed out flyers and brochures about his product to be marketed before production begins. His technical advisor helped him in pricing. He was inspired to enhance direct marketing skills so that he could reduce transaction costs and his advisor helped him to visit local business like restaurants, groceries stores, and different ethnic stores like Asian stores, Indian, Chinese, and Japanese. Sagram picked mushrooms for 3-4 days to finish the first flush, two weeks after suspended of kits. He picked the second flush two weeks after the first flush and same way in third and fourth flush. Almost he picked 50% mushroom in first flush, 25% in second, 15% in third and 10% in last flush. He picked total 1208 pounds of mushroom. At the end, he dumped all substrate bags in composting. He maintained the temperature around 70oF and relative humidity around 90 percent by moistening straw floor and misting over the mushroom bags during production. He maintained sanitation throughout the process in the poultry house and walk in cooler. Out of 1200 pounds mushrooms he distributed 200 pounds free sample as marketing promotion in order to enter into market. And he sold almost 600 pounds @ of $5 and he dried 400 pounds mushroom to sell as dried products @ of $25-30.

Research results and discussion:

Sagram has become a good mushroom grower. He is known as mushroom guy in his neighborhood. He gained knowledge and developed skills to produce and find market as well as others also gained knowledge and skills. This success story is expected to be adopted in Delaware and beyond. Seagram entrepreusurship has great impact in supplying locally grown foods in local consumers. Now Sagram is enthusiastic to expand his operation to address the demand of diverse customers. Thus, it can be expected that there will be more mushroom products will be available. Other visitors were happy getting locally grown mushroom in their neighborhood. It has provided him avenue to use his poultry house in mushroom operation. It could be the best means of his living in the future.He learnt to keep the records well for production, marketing, and sales and other also learnt from him the way he carried operations.

Research conclusions:

Sagram has expected that some farmers will adopt to grow mushrooms. He is willing to offer his experiences to others without any reservations. His way of farming can strengthen local economy and health.

Participation Summary

Education & Outreach Activities and Participation Summary

Participation Summary:

Education/outreach description:

Sagram organized a field days to share his experiences. Participants showed deep interest in mushroom production and marketing. He assured them that he will help them what he has learnt from this operation. He reached with customers through flyers and brochures.



Project Outcomes

Assessment of Project Approach and Areas of Further Study:

Potential Contributions

Other farmers can adopt mushroom production in their property as Sagram did. Sagram is helpful and he will be more than happy to share his experience if someone is interested.

Future Recommendations

Sagram said “Make sure if you have empty unused house in your property, try small quantity in major varieties like oyster, portabella, buttons, and shitake mushrooms to address demand from different customers. He said to build a walk in cooler tailoring with coolbot technology to protect quality by lowering temperature due to heat before being made any delivery to customers. Also, Sagram advise to study about marketing opportunity before growing mushroom because Chinese restaurants usually demands buttons and American restaurants usually demands oyster, portabella and shitake mushroom. If you have time and labor, you can make your own kits to be independent producer. If you need my advice I will provide you without any reservation.”

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.