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Mushroom Farming: 3 Farms Navigating The Future of Fungi

Mushroom Growers


A few weeks back, I stumbled on a podcast called @barntalk on YouTube Shorts, and I couldn’t help but binge-watch all 316 videos posted. One of those videos, in particular, stood out to me, where they talked about small farm start-ups requiring low inputs and investment to run a proof of concept and test market. It was mushroom farming, and after a bit more research, I discovered the demand for specialty mushrooms in the United States was head and shoulders above what we are producing today. Mainly, Shiitake, Lion’s Mane, and Oyster mushrooms are in the highest demand category and growing by leaps and bounds, with a Compound Annual Growth Rate (CAGR) of 8.0%. Twenty countries grow over 93 billion pounds of mushrooms yearly, and the United States produces just over 813 million pounds, in 3rd place. China leads market production with over 88 billion pounds, and second place goes to Japan with 1 billion pounds annually.

The fungi industry is seeking entrepreneurs willing to take a chance on propelling a new generation of specialty mushroom growers by infusing grants and microloans from the United States Department of Agriculture (USDA) and organizations like Sustainable Agriculture Research and Education (SARE) based out of The College of Agriculture and Natural Resources at The University of Maryland. Cornell University’s Steve Gabriel is a solid resource for training and extension education at Cornell University. If you are a resourceful farmer with a small amount of start-up coin, here’s what you need to know when starting a new farming business. Here’s who you contact for that information when setting up food production processes.

Mushroom farm

Speciality Mushroom Growing Varieties In Demand

Knowing what to grow is part of planning a new enterprise. Growing mushrooms begins with understanding the many varieties and their flavor profiles. Start with The Mushroom Council and grab some literature on the varieties used by restaurants and in the retail market.

Shiitake mushrooms are highest in demand and are described as being earthen, with a smokey and buttery flavor profile. They are dense and meaty and go well in stir fry and soups. Oyster mushrooms are delicate and are grown in various colors: grey, blue, pink, and yellow. They grow in clusters and have a steak-like texture when compressed during the cooking process. They tend to be briny and have a seafood flavor. Maitake mushrooms are known as the “Hen of the Woods,” resembling a fantail or plume of feathers. When cooked, they crisp up like chips, and their succulent flavor and texture offer an unbelievable umami. The most regal and beautiful mushroom in high demand is the Lion's Mane, leaving us all intimated in the produce section, unsure of what to do with these fury beauties exactly. They glisten in that cardboard box with the cellophane window on the shelf. Lion’s Mane is a mild and sweet mushroom typically used in vegetarian cooking, with a texture likened to scallops, crab, or lobster. To learn more about growing varieties that make sense, look for resources through The North American Mycological Association site.

Cooking with mushrooms

The Lifecycle Of A Mushroom

Mushrooms begin as spores, then spawn, progressing into fruiting bodies, and they can grow on many different mediums. It is essential to learn how each variety of mushrooms likes to spawn and produce. It is essential to have each varietal mushroom growing on its best-suited substrate or medium. For example, the Oyster mushroom grows well in straw, the best medium to produce the most product. Meaning substrates matter when selecting the environment's ambient temperature, airflow, and humidity concentration. Some grow best on grain spawn, sterilized sawdust fruiting blocks, soy or cotton hulls, straw soaked in mason’s lime, or even coffee grounds. The trick is the higher the Nitrogen level, the higher the yield, and the higher profitability for the grower when yielding in the hundreds of pounds each week. Check with Cornell Agriculture Extension to determine the best pathway for specialty mushrooms.

Mushroom Substrates and Incubation Preparation

Preparing for spawn production begins with the spawn and embedding it into the substrate for inoculation and then to the fruiting room to grow the mushrooms. The mycelium is a single cell wall strand that looks like roots, produced by a lab and meant for mushroom cultivation. The mycelium will grow and feed on the substrate over 3-4 weeks in a humid, well-aerated, and sanitized work area. The Stink Straw method, for example, can be placed in 55-gallon drums, set over a propane burner, and cooked to 140-160 degrees Fahrenheit - to complete sterilization. Using hydrated mason’s lime, consisting of < 10% magnesium content, gives oyster mushrooms a leg up when growing. It is important to use pH test strips to get the solution to at least 10 Alkaline.

Mushroom varieties

Then, set-up the sterilized 5-gallon buckets and drill half-inch holes in a diamond-shaped pattern, 7 inches apart all along the bucket. As a rule of thumb, 40lbs of wet straw will inoculate up to 6, 5- 5-gallon buckets, taking 30 minutes per straw bale to produce once the straw has been soaked and sterilized in the mason’s lime bath. If done right, the buckets will yield an average of 8 pounds of mushrooms, averaging $12-$15 per pound.

Selling Mushrooms By Market and Channel

Start-up mushroom farmers need a place to sell their fruited stock, and it usually begins with farmers markets, small restaurants, and online sales of dried products and maybe even compost because the leftover substrate makes for a beautiful composting solution for gardeners and small greenhouses. Outside of selling fresh mushrooms, farmers have the latitude to sell dried products, ground mushrooms, and teas to add to their product platform. Today, small or family farmers sell through 5-8 market channels, producing roughly 20-100+ pounds of mushrooms weekly.

Mushroom Farmers Sales By Market

Estimated Start-Up Costs & Revenue Opportunities

Setting up a mushroom business begins with sorting out start-up costs and market viability, whether through test markets, friends and family, or selling products at farmers' markets to get a sense of demand through surveys and social media - entrepreneurs begin where they get the most traction and sales opportunities.

Find a place to produce and grow your product, and try to keep overhead low. Consider borrowing space in a basement or adding a 10’x12’ addition to your shed or barn. Or, look online for used farm equipment for a high tunnel, where you can begin building out your business without too much interruption. Some growers have found older or defunct 73’ tractor trailers and set them up side by side to build a lab, incubator, and fruiting rooms—most start-up costs range from less than $1000 to $8900 for larger equipment and infrastructure. Just 500 square feet of space will allow you to produce up to 6 tons or 12,000 pounds of growability each year. Fungi Ally has learning tools and tips for building your business and doing it right.

Mushroom Profitability

Grants And Loans For Farmers

Many organizations are supporting new farmers and their ventures; some require you to have existing revenue, and others do not. Read the contracts and applications to avoid wasting time when building your business. Funding research tools are everywhere, and the USDA has locations throughout the U.S. Do not hesitate to call their offices for assistance. USDA, SARE, FACT, USDA Rural Development, and Penn State University sometimes offer grants much like what you need to scale in the future. Other sources like SEEDRs, GoFundMe, or SeedInvest can help sort out the details once you are off the ground and moving toward revenue. You could run a family and friends round and pay back the loans at a reasonable rate, established in a term sheet.

Municipal Building

3 Farmers Producing and Teaching The Craft

There are many case studies to choose from, but one that stands out the most, based on research and teaching tools, is Fungi Ally, based out of Hadley, Massachusetts. Their start-up details are shared online, and the founder, teacher, and grower, Willie Crosby, is a master producer of commercial mushroom growing. Make sure to download their start-up and operations materials in the Mushroom Academy section of their website. Sharondale Mushroom Farm, located in Keswick, Virginia, has a robust online business and workshops. They actively sell mushroom spawn to growers and home gardeners. Smallhold, a bi-coastal producer of mushrooms, venture capital funded, and organically certified, believes in creating community connections and building brand value through sharing ideas on best practices. They pride themselves on managing optimal growth by implementing sound electrical controllers and technology systems on-site, which helps with HACCP and other requirements when farming produce, organic or conventional.

Farmers Market


Consumers always seek off-the-beaten-path products to grow or cook with at home, and that demand continues to grow. Social media, chefs, and James Beard award winners seek new and different ways to integrate into their repertoire and seek out farmers who think “Beyond The Box.” Large farmers love to invest strategically in profitable programs, and new farmers with knowledge and staying power provide that edge; do not be afraid to partner. Because building and creating new markets help established farmers diversify into new territory.

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