Cultivating Resilience: Sustainable Outdoor Reishi Mushroom Production for Small Farms

Project Overview

FNC25-1453
Project Type: Farmer/Rancher
Funds awarded in 2025: $14,965.00
Projected End Date: 01/15/2027
Grant Recipient: Third Great Farm
Region: North Central
State: Illinois
Project Coordinator:
Eric Hanson
Third Great Farm

Commodities

No commodities identified

Practices

No practices identified

Proposal summary:

Degraded, rocky soils pose significant challenges for sustainable agricultural production, often limiting options for soil restoration and crop viability. Conventional methods rely heavily on tillage and synthetic inputs, which can exacerbate erosion and nutrient loss over time. Small-scale farmers need low-cost, accessible solutions to regenerate soil health while diversifying farm income.

The mushroom cultivation industry, while economically promising, relies predominantly on resource-intensive indoor systems and single-use polypropylene plastics, contributing to significant waste and environmental impact. Outdoor cultivation offers a sustainable alternative but lacks widely adopted, scalable models that integrate fungi into regenerative farming practices.

Additionally, rural communities often lack access to medicinal mushrooms, despite their well-documented health benefits and growing demand. As a result, farmers and ranchers in these communities miss opportunities to incorporate high-value, health-promoting crops into their operations while improving degraded land.

This project addresses these challenges by integrating fungi as decomposers and soil builders into a low-tech, outdoor system. By leveraging waste streams, such as wood pulp and discarded nursery pots, the project minimizes ecological impact while producing a marketable farm product. This solution supports sustainable agriculture by addressing soil degradation, reducing waste, and educating farmers on waste-reducing, no-till mushroom cultivation techniques.

Project objectives from proposal:

Solution

This project establishes a low-tech, sustainable outdoor system for cultivating Ganoderma lucidum (Reishi) mushrooms while improving soil health on degraded, rocky land in USDA Zone 5b. By utilizing fungi as decomposers and soil builders, the project demonstrates how small-scale farmers can address soil degradation, reduce waste, and diversify income through sustainable agricultural practices.

Reishi mushrooms will be cultivated in nursery pots, sourced from waste streams created by commercial nurseries, and filled with wood pulp substrate derived from tree service byproducts. These pots provide a controlled environment for the substrate while reducing reliance on single-use polypropylene plastics, a common industry practice. Nursery pots are arranged under a high tunnel with shade cloth to regulate light, temperature, and humidity for optimal mushroom growth.

At the end of the growing season, spent mushroom substrate will be combined with other organic waste materials, such as straw, manure, and wood chips, to create nutrient-rich compost. This compost will be applied as a top-dressing on the grow site, building organic matter, enhancing microbial activity, and improving soil fertility without tillage. By using fungi-driven decomposition, the project promotes a regenerative cycle of nutrient replenishment that restores degraded soils over time.

Following the first harvest, chickens will be introduced to one side of the high tunnel. They will graze and naturally fertilize the soil with nitrogen-rich manure, while their scratching behavior will aid in substrate breakdown and aeration. The other side of the high tunnel will serve as a control site to assess the chickens’ impact on soil health.

The project also minimizes ecological impact by repurposing agricultural waste streams, such as discarded nursery pots and wood pulp, to reduce landfill contributions and reliance on non-renewable inputs. This approach aligns with regenerative agriculture principles, addressing soil degradation while promoting sustainability and economic viability for small-scale farmers.

Education and outreach are integral to the project. Workshops and field days will be held to demonstrate every stage of the process, from substrate preparation and mushroom cultivation to composting and poultry integration. Instructional guides, videos, and detailed data summaries on yields, soil health, and economic performance will be shared online and at community events to maximize the project’s reach and replicability.

This system exemplifies how fungi can be harnessed to regenerate soil, create value from waste, and provide access to high-value medicinal mushrooms for rural communities. By integrating no-till composting, poultry systems, and waste stream utilization, the project offers a replicable, low-cost model for improving soil health and sustainability while promoting income diversification and health benefits.


Objectives

  1. Develop a sustainable outdoor Ganoderma lucidum cultivation system using nursery pots and wood pulp substrate.
  2. Build soil health and organic matter on degraded land through fungi-driven composting and no-till practices.
  3. Utilize waste streams, such as nursery pots and wood pulp, to minimize waste and reduce inputs.
  4. Integrate chickens to enhance nutrient cycling and decomposition.
  5. Produce a marketable medicinal mushroom to support farm income.
  6. Educate 100 farmers and community members through workshops, field days, and online materials.
  7. Promote awareness and access to medicinal mushrooms, supporting health and wellness in rural communities.
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and should not be construed to represent any official USDA or U.S. Government determination or policy.