Final Report for ONE14-214
Project Information
Forest-grown shiitakes have high value for growers but require years of intensive management to reach full production and access to reliable markets. Buyers, particularly restaurants and food co-ops, have indicated that they need a larger, more reliable supply which single growers have not yet been able to produce or guarantee. Fifty-seven forest grown shiitake producers from across the Northeast responded to our market assessment. Fifty-one (89.5%) of these farms are currently marketing shiitakes, with a projected harvest from 17,968 inoculated bolts in 2014. With two harvests per season, past research showed that with well managed laying yards, growers can expect to harvest an average of up to one pound per bolt per season. At an average of retail value of $16/pound, sales from these growers represented an income of $287,488 or an average of $5,637 per involved grower.
Together, with the remaining 6 responding farms moving into commercial marketing, these 57 growers projected that they would harvest forest grown shiitakes from 59,575 bolts by 2018. If these growers can manage to maintain an average retail price of $16 per pound, the shiitakes harvested could represent as much as $953,200 in total income for these growers in 2018. Even at wholesale prices, the assessment showed that growers expect to receive around $11 per pound as a wholesale price. With an anticipated average wholesale value of $11/pound, this represents potential farm income totaling up to $655,325 by 2018 from those participating in this NESARE Marketing Assessment.
Forty-seven growers (82%) indicated that they were very or quite interested in developing a NE Forest Grown Mushroom Network. In past NESARE research (LNE10-298), 89% of participating growers indicated that demand consistently exceeds supply in their region. Growers expressed a need to connect with other growers and hope to aggregate supplies of available shiitakes, and requested this market assessment to determine the appropriate mix of marketing, aggregation and distribution channels that will best advance their financial success.
Shiitakes can provide a profitable method of diversifying farm income by utilizing low-value forestry by-products while creating opportunities for timber stand improvement. Once the freshly cut hardwood logs are inoculated, shiitake logs continue to fruit biannually for 4-5 years. Log-grown shiitakes enjoy strong demand and are higher in quality and value than mass-produced indoor-grown shiitakes.
After completing the market assessment the Core team held four regional workshops/focus groups to identify a proposed communication structures, explore marketing plans, and targeted aggregation sites for their consideration. Involved farmers indicated that they would be excited to participate in collectively marketing their mushrooms through regional agro-forestry aggregation and distribution networks.
Introduction:
This Partnership project completed a Market Assessment to gather input from experienced forest grown shiitake growers to assess: (1) their current and planned levels of production; (2) the volume of their current and projected sales and demand; (3) the feasibility of potential sites for local hubs to aggregate and distribute mushrooms to markets; (4) the growers level of interest in purchasing of common inputs to reduce overall costs; and (5) their interest in collectively aggregating and distributing forest grown shiitakes to support their emerging agro-forestry mushroom ventures.
The market assessment survey was distributed to approximately 200 persons who are members of an on-line list serve developed over the past five years as an open source of information on shiitake growers. 57 growers who are selling their shiitakes commercially responded to the assessment. Data collected from these assessments was shared in a series of regional shiitake workshops, organized conducted by our farmer advisers in various locations in the Northeast. Farmer advisers included Steve Sierigk of Hawk Meadow Farm in Trumansburg, NY; Nick Laskovski of Dana Forest Farm in Waitsfield, VT; Paul Lagreze of NE Wild Edibles in Greenfield, MA; and Mike Walker of Mt Philo Woodland Farm in Charlotte, VT.
According to recent reports, through SARE and USA Today, the NESARE project, “Cultivation of Shiitake Mushroom as an Agroforestry Crop” has successfully demonstrated that shitake mushrooms are feasible for Northeast farmers to grow commercially. This project conducted a market assessment that provides growers with information about available supplies of forest grown mushrooms and identified targeted markets with high demand for their products in the Northeast.
The focus for the market assessment combined research to identify levels of supply and inventory of forest grown shiitakes coupled with pinpointing sales opportunities in the NE regional marketplaces.
Objectives of the market assesment with current shiiatke growers in the Northeast were to identify:
(1) their current and planned levels of production;
(2) the volume of their current and projected sales and demand;
(3) potential sites for local hubs to aggregate and distribute mushrooms to markets;
(4) the growers level of interest in purchasing of common inputs to reduce overall costs; and (5) their interest in collectively aggregating and distributing forest grown shiitakes to support their emerging agro-forestry mushroom ventures.
Cooperators
Research
Preliminary research completed by the market assessment has found a high demand for forest-grown shiitakes, with a majority of the retail purchases to restaurants, farms market and food co-ops for at a price of up to $16 per pound in small quantities, $12 to $14 per pound in larger quantities, throughout the Northeast. Prices growers received were often less in isolated rural areas than they were able to receive in urban markets.
This market assessment first targeted shiitake growers across the Northeast through Qualtrics, an on-line market assessment. Over the past few years we've developed a list-serve of approximatly 200 persons interessted in forest-grown shiitakes. Initital emails were sent to the entire list two weeks prior to distibutiong the on-line assessment. Once distibuted, listserve members were given a two week deadline for responses. Once that deadline was reached, those who responded were thanked and non-responers were given an additonal week for their. Eventually, our Assessment received feedback from 57 shiitake growers who were self- identified as ecperienced growers.
More experienced growers insisted that they could easily increase their number of accounts if marketing relationships and a steady supply of shiitakes could be assured. They emphasized that demand could be much higher in nearby population centers such as Ithaca, NY; the Hudson Valley; the Greater Boston area; throughout Vermont’s VT Fresh Network of restaurants and chefs; as well as in the Penn’s Corner area of Southwestern Pennsylvania.
The extent of this additional demand was measured by responses from 27 customers identified by the 57 shiitake growers who had responded. The assessment was emailed to these identified customers. Customers were individually encouarged by their farmer participants to respond to the assessment In addition, our farmer advisors conducted individual email and phone surveys with targeted current and potential shiitake buyers to test their hypothesis that:
1.) Demand for fresh shiitakes outstrips current supply, and
2.) Increased demand can be identified within particular geographic locations, and/or according to particular buyer preferences.
The customer assessment helped to gauge how much product, where, and when it could be sold through if dependable supplies could be aggregated and distributed through local “pods”. Data was collected on customer preferences concerning volume, price and quality parameters.
The market assessment was led by the Director of Sustainable Agriculture at the Falk School of Sustainability at Chatham University and conducted with the assistance of a graduate student in the Masters of Food Studies program. The assessment received responses from 23 of the 27 buyers identified by farmer participants. 81% of these customer responses were quite or very interested in purchasing forest grown shiitakes from an alliance of producers in the Northeast if such a group were available.
Regional Shiitake workshops: The project workshops utilized information from the Qualtrex Market Assessment and a publication “Best Management Practices for Forest Grown Mushrooms” developed by the NESARE project, “Cultivation of Shiitake Mushroom as an Agroforestry Crop” which is available online. Four regional workshops held in various locations in the Northeast, discussed “scaling up” to become established in the marketplace. Practical aspects of advanced production methods emphasized key practices to consider in the transition to 500-log or larger operations. Participants examined possible ways to collaboratively market, aggregate and distribute forest grown shiitakes and related agro-forestry products.
The project leader had the opportunity to host a tour and demonstration of a shiitake laying yard at Chatham University’s Eden Hall Farm for the Annual National Extension Educators Conference in the fall of 2013. As a result of that interest, we then scheduled a workshop coordinated with Penn State Extension in southeast Pennsylvania in mid-April 2014. This was used as a “trial” workshop led by the project leader to present findings from Best Management Practices for Forest Grown Manual and to test the market assessment and participant survey that would be used by our farmer advisers in their own regional workshops. Farmer advisers worked with the Project PI and graduate assistant to tabulate and review results from the trial market assessment survey to finalize the Market Assessment to be distributed to commercial forest grown shiitake growers.
The completion of these workshops and market assessment from this project provide a strong base-line of data and information for shiitake growers in the Northeast, maintain momentum of their interest in collaborating to possibly pursue further exploration of establishing a more formalized marketing network for lowering input costs, increasing skills, securing additional markets and/or increasing income and profitability for involved farmers.
Timeline
March 1, 2014 Farm advisers contacted and reconfirmed their involvement and interest.
March 15, 2014 Conference call completed with farm advisers to discuss implementation plans for NESARE Partnership grant & complete plans to host SE PA initial Shiitake workshop
April 15, 2014 Initial shiitake inoculation workshop held in SE PA in conjunction with Penn State Co-op Extension. Trial market assessments was developed with input from 25 participants
May 9, 2014 ONE14-214 contract approved and signed by Chatham University administration.
May 30, 2014 Conference call: Draft Market assessment results reviewed with farmer advisers
June 15, 2014 Signed contract received by Chatham University from NESARE, and expenditure of funds approved
July 30, 2014 Market assessment final draft edited with input from Farm Advisers
Aug 31, 2014 Graduate Assistant research work plan and updated timeline developed
Sept 15, 2014 Farm advisors completed market assessment, results incorporated into final version
Sept 30, 2014 Members of NE mushroom list serve receive advance notice of assessment. Conference call with farm advisers: Market assessment finalized for distribution
Oct 30, 2014 57 Mushroom Shiitake growers responded to market assessment and identify their current and 5 year production targets through 2018. 82% of these growers indicated interest in developing Network
Nov 1, 2014 Core team conference call with Farm Advisers: to discuss data collected and summarize results of Market Assessment. Developed plan for Customer Assessment
Nov 30, 2014 First draft of Consumer/ Customer assessment developed
Dec 30, 2014 Final version of Customer assessment completed for distribution. Annual Partnership Grant report submitted to NESARE
Feb 28, 2015 Results of Customer Assessment completed
March-April, 2015 NE Regional Workshops coordinated by Frm Advisers, PI and Graduate Asssistant to share result of assessment held at various locations
May, 2015 Feedback from workshops discussed with core team with input included in the final report
June, 2015 End of project, final results of Market Assessment compiled
Current and projected levels of production:
Fifty-seven forest-grown shiitake producers in the Northeast completed the Market Assessment. 51 were currently producing shiitake mushrooms for sale at the time of the assessment and 6 farms inoculated bolts in 2014 and planned to begin harvesting in 2015. Total number of bolts (shiitake logs) inoculated and ready for harvest by these growers in 2014 was 17,968 bolts. These same growers projected that that would have 59,575 bolts inoculated in 2018.
Summary of sales and futures inventory:
Most farmers indicated that they sell a combination of both fresh and dried mushrooms through a combination of both retail and wholesale markets. The total retail value at $16 a pound of 2014 shiitake harvest from 17,968 bolts was projected to be $287,488. If all those shiitakes were sold at wholesale value of $11 per pound, the potential income would be reduced to $197,648.
Growers projected that in 2018, at a retail value at $16 a pound, the total shiitake harvest from 59,575 bolts could be $953,216. Even if all those shiitakes were sold instead at wholesale value of $11 per pound, the potential income would be reduced to $655,336, which is still more than 240% of the projected retail value produced in 2014.
Customer Demand Summary:
Twenty-seven (27) shiitake customers identified by growers attempted the assessment and 23 completed the full assessment. (Three of the respondents who completed the survey do not currently purchase northeast forest grown shiitake mushrooms but would like to in the future). Together, these customers estimated annual pounds of shiitake that they needed to purchase annually to fulfill customer demand in the northeast was 7,075 pounds, or about 307 pounds per buyer. In 2014, these buyers indicated that only 2,060 pounds (29% of demand) of locally produced forest grown shiitakes were available for them to buy. 70% of these customers expect demand for forest grown shiitakes to increase over next 5 years. Customer’s primary reasons for purchasing locally grown shiitakes ranged from supporting local growers, to improved taste, to improved quality, to customer satisfaction. Price was the least mentioned reason for purchasing local, forest grown shiitakes.
Currently, the average retail price customers were paying for these shiitakes was $16 per pound, and average wholesale price was $11. When asked what prices they would be willing to pay in 5 years, retail prices ranges from $10 a pound to $19 a pound with a majority (38%) willing to pay $16 to $17 a pound.. In 5 years, their expected wholesale price ranged from $9 to $14 a pound, with 46% indicating a price of $11 to $12 a pound, which basically mirrors 2014 price estimates. It is interesting to note that 78% of these customers (18) are somewhat likely, likely, or very likely to purchase dried shiitake mushrooms if the flavor is as good as or better than fresh shiitake mushrooms. 81% of the customer respondents indicated that they would be interested in purchasing forest grown shiitakes for an alliance of producers in the Northeast.
Overall, this market assessment found a high demand for forest-grown shiitakes, sold at $16-$18/lb. through retail/direct sale markets, and $10-$12/lb. in wholesale quantities, throughout the Northeast. The full extent of this additional demand was not well known, and would be an excellent focus for further market research.
Potential sites for local hubs to aggregate and distribute mushrooms to markets
Workshops, held in 2014-15 in four locations in the Northeast, reached 98 participants who explored the level of interest in “scaling up” to establish regional marketing hubs. These workshops emphasized key practices necessary to consider in the transition to 500-log or larger operations, discussed strategies to increase production, sales and quality of products, as well as possible ways to collaboratively market, aggregate and distribute forest grown shiitakes and related agro-forestry products. Results of Grower and Customer Market Assesments were shared and discussed in detail.
Looking at the concentrations of growers in the NE region, it was eventually recommended that potential sites for “hubs” that would be most beneficial for collaborative markets could in central NY near the Finger Lakes Region; in the Greater Boston, MA area; in the central and/or northern Vermont; and in the Southwestern Region of PA. In addition, because of the concentration of food hub activities and access to NYC the Hudson Valley Region was also identified as an area of strong possibility for an aggregation/ distribution hub.
In order for any of these areas to actually take a next step towards establishing a local marketing network it would be necessary for local growers to identify (1) a regional community “partner” for planning their organizational structure, (2) a specific regional site for aggregation; (3) a detailed plan for identifying availability and distribution for local inventory; and (4) a core group of growers willing to take the leadership of moving forward in establishing the operational guidelines for such a local agro-forestry network.
Interest in purchasing of supplies and collective aggregation and distribution:
82% of the 57 respondents were very or quite interested in developing a Northeast Forest Grown Shiitake Marketing Network for collective purchasing of supplies and materials to share and reduce costs. It was quite interesting to find that 30% (17) of the responding growers were very or quite interest in buying extra shiitakes from other growers to sell in their already existing markets. This matched well with the finding that 77% (44) of the responding growers were very or quite interested in selling their shiitakes, either dried or fresh, through a marketing network in the Northeast.
Data gathered from 57 forest grown shiitake growers/farmers from across Northeast USA shows wide ranging interest in forest grown shiitakes. Results indicated that direct retail sales occurred primarily through farmers markets, regional coops, and restaurants. Retail prices ranged quite broadly because of the diversity of markets. Those in extremely rural markets sometimes were only able to charge $6 to $8 per pound. Others, with more established urban markets, are often able to charge as much as $18 to $20 per pound.
Assessments from growers show that they projected growth from 17,968 bolts ready for harvest in 2014 to an estimated 59,575 bolts inoculated to produce forest grown shiitakes by 2018. With nearly 300% potential increase in production, it will become increasing important to sustain the income form retail and wholesale prices being receive by growers. By working together in developing regional aggregation and distribution “pods”, it seems necessary to develop a structure that maintains the income values for grower, and reduces expense through collective purchasing.
82% of the cooperating growers were very or quite interested in developing a NE Forest Grown Shiitake Mushroom Network. 44 (77%) of the growers indicated that they would be interested in selling their extra shiitake products (fresh and dried) through such a Network. 14 (30%) of growers were interested in buying extra shiitakes for their existing markets. Obviously, no conclusion can be drawn until additional information on current and future customer demand is gathered, so growers can anticipate matching supplies and demand.
Education & Outreach Activities and Participation Summary
Participation Summary:
A wide variety of approaches for outreach and education were used, from the regional workshops conducted in 2015, to an on-going list-serve that is expected to actively involve even more commercial growers over the next few years. Our outreach and dissemination approach combines direct interaction through the workshops, with website interaction through list serve, as well as through sharing the results electronically with ATTRA.
As an next step to our planned outreach approach, we have been invited to present a preconference workshop at the annual “It Takes a Region” Conference on Food Hubs in Sarasota Springs, NY in November, 2015. In addition, each of our farm advisers will be encouraged to share the results of the market assessment and our final report at their own shiitake production workshops in the spring of 2016. Results of the project will be posted on the current mushroom-list serve and on Cornell’s Northeast Forest Grown Mushroom blog site in an effort to identify persons in the local areas where aggregation and distribution hubs may be recommended.
Project Outcomes
The market assessment demonstrated that 57 growers are expecting to increase annual income from retail sales forest grown shiitakes over the next 5 years. At retail prices of $16 per pound, total income was projected at $287,488 or an average of $5,637 per grower. At that same retail price of $16 per pound, growers projected an increase to $953,200 or $16,722 by 2018. A serious question raised was how could it be possible to maintain such a rapid increase in the number of shiitakes being grown without growers driving down the retail price as they compete with one another for customers?
Farmer Adoption
It is expected that with leadership from our farm advisers, growers who have attended our regional workshops might self-select to use this information on marketing, demand, sales, aggregation and distribution to actually take the next steps for localized collaborations on sales and distribution of forest grown shiitakes and other related farm and forest products.
We expect to be able to track any progress in that direction through our open mushroom list-serve. And complete a fllow-up on-line survey in the next year to identify any collaborative efforts for purchasing and/or sales havebeen implementd.
Areas needing additional study
It would be extremely useful to conduct a study of past SARE projects over that past 20 years that attempted to support the development of farmer networks, cooperatives, or other types of collective business ventures. Which were successful? Which failed? What made the differences between successes and failures?
A follow-up SARE project to implement the findings of this market assessment and develop a network of several regional marketing “hubs” for aggregation and distribution to established markets around the Northeast was requested by farmers and customers participating in this assessment.
Locating experienced commercial growers of forest grown shiitakes by their actual “Zipcode” would be useful in more specifiacally identifying and establishing target locations of regional marketing.
Growers also suggested a more complete study to see learn the extent of commercial growing of Red Wine Cap, Oyster mushrooms and related value-added agro-forestry products would be helpful in diversifying sales to future customers.