Indoor Mushroom Grower Scenario Research

 

In 2020, we collaborated with Fungi Ally on a grant with funding from NE-SARE and engaged potential growers in a number of educational efforts. Growers that were ready to jump into a commercial enterprise applied for consulting support and assistance in exchange for collecting and sharing data on their production figures, sales, and labor and material costs. These are new operations that are starting up production in their first or second year.

 

We are grateful for the fourteen growers who initially signed up and the five farms who were able to produce data sets we could analyze. Of course, 2020 was a challenging year given the COVID-19 pandemic, so some reasons growers may not have been able to complete a data set included being too busy, deciding to stop or delay production, or some other range of life circumstances that arose.

 

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

 

Of these seven examples, three sites purchased in blocks and three sites made their own blocks on the farm. Some farms utilized 10 pound blocks and others 5 pound blocks, so for the purposes of comparison, we converted all the farms to utilize 5 pound block equivalents in our calculations.

 

The unique circumstances of each farm mean that there is a wide range in some of the elements that limit the value of comparison. We have a large range among farms as to the timeframe data was collected, from 16 to 69 weeks. There are also several variables and inevitably imperfect data for each farm. Thus, we ended up eliminating infrastructure costs (capital and fixed costs) in the analysis below, because the range here was too variable to compare farms. Instead, we focused on the operational costs (labor + materials) to give a snapshot of how average weekly production looked as a useful measure to assess the realities in production systems. 

 

The table below is ranked by the number of blocks initiated per week. 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. However, this does not mean that a smaller operation couldn’t find profitability, or that 60 blocks a week is sufficient. One factor in this is the residency of blocks in a grow room; for the Cornell research, blocks were left in the fruiting space for 8 full weeks, to capture the entire potential yield, reflected in the higher average pounds per block value. 

 

 

Yet, most farms cycle blocks faster, often removing them after the first major harvest to make room for more new blocks. Given all the variability and difference between these seven examples, it's important not to directly compare one farm to another or make any conclusions about the right scale of enterprise. The farmers who participated all indicated that the data they collected was not perfect, but the best they could achieve amidst being busy focused on production. 

 

The next section below uses a strategy of averaging values per block in order to create some reasonable projections for others to use. Perhaps the most important takeaway from the Table 1 summary is the wide variability of operations and their potential to be efficient in labor and material costs, production, and ultimately profit or loss. 

 

One might be tempted to infer that based on dividing sales by pounds you could determine the price received per pound. We specifically did not include a $/lb figure because that can be misleading. Several of these farms have value-added products, spawn kits, supplies, workshops, other sales etc as part of the total. It was too hard to break all that out accurately, so note that sales in the overall enterprises is not just a direct result of pounds of mushrooms.

 

Individual Farm Summaries

 

Farm A is producing in West Virginia and initiated an average of 16 blocks per week, produced on site. This yielded an average of 15.03 pounds of mushrooms and generated $112.45 in income each week. Labor costs represented 80% of overall costs and were notably higher than the other operations, with 34% of time spent harvesting, 22% inoculating, 28% in delivery and sales, and 14% in packing and processing. At this pace and scale, the farm is operating at a loss. Increasing the number of blocks produced weekly and reducing labor costs would most improve profit and loss. 

 

Farm B is producing in Massachusetts using ready to fruit blocks. Notable is that blocks were not added weekly but one or two times per month, which resulted in weeks of no labor/yield and then weeks where there was much higher activity, with some weeks with 50 - 90 pounds produced. An average of 24 blocks initiated each week produced 28 pounds which generated $138.98 in sales. Labor costs were 52% of overall costs, with 82% of the material cost being purchasing the ready-to-fruit blocks. Labor was 60% in harvesting, 0% inoculation, 21% sales, 17% packing and processing, and 2% other. At this pace the farm is operating at a loss. Increasing the scale of production would most improve profit and loss.

 

Farm C is producing an average of 90 blocks per week, made on site in Vermont. This yielded 59.39 pounds per week generating $791.10 in sales. Labor represented 67% of the operating costs and was spent 12% harvesting, 29% inoculation, 30% delivery and sales, 14% packing and processing, 6% cleaning, and 7% other.  At this scale the farm is operating at a profit of $166.60 per week. Improvements in inoculation and delivery/sales efficiency would likely most improve the profit and loss for this enterprise.

 

Farm D is producing on blocks the farm made on site, in Eastern New York. The average blocks initiated per week was 117.4 and this yielded 88.5 pounds and generated $969.40 revenue per week. Labor represented 68% of the operating costs and was spent 9.9% harvesting, 34% inoculation, 46% delivery and sales, and 9.8% packing and processing. Notable about this operation are the wide range of value added products that enhanced weekly sales including mushroom kits, tinctures, workshops, and spawn for purchase. At this scale the farm was generating a profit of $517.89 per week. Improvements to this enterprise would most effectively focus on increasing the pounds yielded per block, which was the lowest of all the farms.

 

Farm E is initiating an average of 313 ready-to-fruit blocks a week in New York. This yielded 284 pounds for $3389.37 sales per week. The material costs represent 67% of the overall costs and are almost entirely ready-to-fruit block purchases which cost $1,402.50 per week. Labor breakdown is 20% on harvesting, 0% inoculating, 33% delivery and sales, 22% packing processing, 6% cleaning, 17% other. At this pace and scale, the enterprise is making a profit.