Growing the Specialty Mushroom Industry in the Northeast

We initially accepted 15 farmers into the research aspect of this study. With all that happened during 2020, 5 of those farmers were able to complete 30 weeks of data collection. 

Table 1 summarizes the datasets we received from five farms as well as from the Cornell block studies also conducted in 2020, which to some degree can be thought of as a “control” comparison to the more dynamic nature of actual on-farm production. 

Of these seven examples, three sites purchased ready-to-fruit (RTF) blocks and three sites made their own blocks on the farm. Some farms utilized 10 lb blocks and others 5 lb blocks, so for the purposes of comparison, we converted all the farms to utilize 5 lb block equivalents in our calculations. We ended up eliminating infrastructure costs (capital and fixed costs) in the analysis below because the range was too variable to compare farms. Instead, we focused on the operational costs (labor + materials) to give a snapshot of average weekly costs, to assess the realities in production systems. Interestingly, the Cornell trials fell to the middle of the group and appears to be an indicator of a potential “break even” point, suggesting that farms doing 60 blocks a week should be able to realize profit.

TABLE 1: Average Weekly Values for seven mushroom production scenarios.

It is important to consider the average pounds harvested per block, which across all 5 participating farms was .88 lbs. The costs per block value is also important, which accounts for both the material and labor inputs combined. The labor per block values give a sense of how much labor factors into the overall cost. We left out Cornell blocks from Table 2 because of the long duration in the fruiting room. In the Cornell setting blocks were left for an entire 8 weeks to study yield over time. Most farms do not have sufficient space to do this, or they operate under the thought that growing a new block, and rotating every 2-4 weeks, is more efficient than leaving them for 8 weeks. Another concern some growers have with leaving blocks in for a long duration is insect and disease pressure. With these considerations it could be interesting to further study if leaving blocks in a fruiting room is more viable than initiating a new one.

TABLE 2: Per block values for each farm

Averaging the top four producing farms (one with a loss, three with a profit) yielded a good set of values to consider as the “low” end of a continuum. Averaging the three profitable ventures offered a good set of “high” values for scenario models. Averaging farms across a spectrum of profit/loss does dilute some of the details, but provides a more realistic picture for growers as they begin production. Table 3 shows the averaged values for these various groupings.

TABLE 3: Averaged per block values for various groupings of farms

The operating costs were broken into labor and material costs. All of the farms except one were owner-operated. The labor cost was calculated by the amount of hours worked times $15 per hour. In the four owner operated farms these would be added into overall farm profit. The table below shows the breakdown of operating costs into labor and material costs.

TABLE 4: Breakdown of weekly costs

Based on the values in these tables, we can project the potential values for operating a mushroom operation on a wide range of scales. Farms tend to produce seasonally or year round, so one could consider multiplying these by the number of weeks they might consider growing to consider what a whole operation could yield.

For these scenarios, we kept the yield per block at the global average across all the farms (.88 lbs/block). Note that the values for labor, sales, and costs on a per block basis only vary to a small degree, yet result in values that almost double profitability. Table 5 shows the “low” production scenario and Table 6 shows the “high” production scenario, with modest changes in sales and costs reflecting a substantial increase in profitability.

TABLE 5: “Low” Scenario for Production based on Blocks Initiated

TABLE 6: “High” Scenario for Production based on Blocks Initiated

Keep in mind these projections are based on the original averages, so there is no accounting for the potential efficiencies of various scales. That said, we can see in the "low scenario" that at around 160 blocks a week the enterprise becomes a full time job for one person, while generating a surplus profit of $318.40 to cover other indirect and investment costs. In the "high scenario" 180 blocks a week becomes a full time job for on person, while generating a surplus profit of $711.

Table 7 offers the breakdown of various tasks within operations and the rough percentage of the overall labor cost it represents. Some farms expressed that due to the challenges of labor tracking, their total hours were likely greater. Some farms accounted for time cleaning while for others it was wrapped into other categories. In retrospect, it would have been best to define cleaning as a separate category, since growers report this is a substantial portion of their time.

Labor accounts for 67% of operating costs, and materials 32%—an average for all of the farms. When we look at farms making blocks on site (orange) vs buying in blocks (blue), the breakdown is quite different. Farms making blocks on site arrive at 20% materials and 80% labor while ready-to-fruit block farms have a higher material cost of 58% and labor at 42%. 

TABLE 7: Breakdown of labor allocation