1

P eople have harvested mushrooms from thewild for thousands of years for food andmedicines. Of the estimated 1.5 million

species of fungi, about 10,000 produce the fruitingbodies we call mushrooms. While commercialharvesting of wild mushrooms continues today,most of the world’s supply comes from commer-cial mushroom growers. The Chinese first culti-vated shiitake (Lentinula edodes) mushroomsaround 1100 AD, with domestication effortsbeginning centuries earlier. White button mush-rooms (Agaricus spp.), most familiar to Ameri-cans and Europeans, were first domesticated inFrance in 1650. Commercial production began inthe United States in the 1880s. Agaricus is theleading mushroom crop worldwide and accountedfor 99 percent of the 1997 United States’ mush-room production. Oyster mushrooms (Pleurotusspp.) were more recently domesticated, and nowrank second in world production. Shiitake mush-rooms, which are very popular in Asian cultures,rank third. Many other edible mushrooms, such asstraw and wood ear mushrooms, are gaining inpopularity.

Roughly 300 mushroom species are edible,but only 30 have been domesticated and 10 aregrown commercially. Button, oyster, and shiitakemushrooms make up about 70 percent of theworld’s production (table 1). During the past 30years, mushroom production worldwide increased

twenty-fold, with much of that increase occurringin the 1980s and 1990s. Increased demand forspecialty mushrooms (everything besides Agari-cus) has been particularly strong. Asian countriescontinue to dominate world production andconsumption, however, consumption in theUnited States has increased sharply in recentyears, providing potential opportunities formushroom growers.

Mushroom production in the United Stateshas traditionally centered in Pennsylvania, whichproduces nearly half the nation’s button mush-rooms. California and Florida are the second andthird leading producers, with limited productionin 27 other states. Large-scale growers withestablished, year-round markets dominate com-mercial mushroom production. In 1997, 7 percentof United States mushroom farms supplied 20million pounds or more each, or 38 percentpercent of total U.S. production. In contrast, 36percent of mushroom farms produced less thanone million pounds per year.

Even established growers are challengedwith recent imports of canned Agaricus fromChina, Chile, India, and Indonesia. In the face ofthis competition, the prospects for new Agaricusgrowers are poor. The number of button mush-room growers in the United States has decreasedsteadily, from 357 in 1987 to 153 in 1997.

Growing MushroomsCommercially —Risks and Opportunities

Danny L. Barney

CIS 1077

2

SpeciesFresh weight and percentage of total production

Percentincrease

1986 1994

Agaricus bisporus(button)

(X 1,000 tons)

1,215

(%)

55.8

(X 1,000 tons)

1,846

(%)

37.6

(%)

51.9

Lentinula edodes(shiitake) 320 14.7 826 16.8 158.1

Pleurotus species(oyster) 169 7.8 797 16.3 371.6

Auricularia species(wood ear) 119 5.5 420 8.5 301.0

Volvariella volvacea(straw) 178 8.2 299 6.1 68.0

Flammulina velutipes(enokitake) 100 4.6 230 4.7 130.0

Tremella fuciformis(jelly fungus) 40 1.8 156 3.2 290.0

Hypsizygus marmoreus(bunashimeji) --- --- 55 1.1 ---

Pholiota nameko 25 1.1 27 0.6 8.0

Grifola frondosa (maitaki) --- --- 14 0.3 ---

Others 10 0.5 239 4.8 2,290.0

Table 1. World production of cultivated edible mushrooms in 1986 and 1994.

Table 1 adapted from S.T. Chang, 1996. Mushroom research and development - equality and mutual benefit. Mush. Biol.Mush. Prod. Vol. 2:1-10.

Specialty mushroom production is moreevenly distributed throughout the United Statesthan is button mushroom production. The num-ber of commercial specialty mushroom growers inthe United States decreased slightly (from 188 to183) between 1995 and 1997. There are a fewlarge-scale specialty mushroom farms. Mostgrowers operate small farms and focus on localmarkets. For 1997, the average specialty mush-room farm in the United States produced approxi-mately 52,000 pounds of mushrooms with gross

sales of about $150,000. United States productionof oyster and shiitake mushrooms appears inFigure 1.

Shiitake and oyster mushrooms are thebest-known specialty mushrooms, and probablythe easiest to market. Auricularia spp. (wood ear),Volvariella volvacea (straw mushroom),Flammulina velutipes (enokitake), Grifolafrondosa (maitake), and Tremella fuciformis (whitejelly or fungus ear) are also increasing in popular-ity. Volvariella volvacea (straw) mushrooms are

3

the easiest to grow, produce mushrooms in as littleas 4 days, and are adapted to areas with hightemperatures. They are not as popular withconsumers as button, oyster, or shiitake mush-rooms, but still account for 6 percent of theworld’s production. Ganoderma lucidem (reishi),Hericium erinaceus, and Hypsizygus marmoreus(bunashimeji) are medicinal mushrooms usedprimarily in Asia. Medicinal mushrooms requirespecialized marketing in the United States.

Production facilities

Mushrooms lend themselves to many differentgrowing systems from simple and inexpensive tohighly sophisticated and expensive. This publica-tion was written only to provide an overview ofopportunities and risks for potential mushroomgrowers. Sources providing detailed, how-tocultural information are listed at the end of thisbulletin. Much information on state-of-the art

mushroom production and marketing may also befound on the Internet. Be aware that some pro-duction techniques are patented and requirepayments to patent holders if they are used.

Shiitake has long been grown on sections oflogs about 3ft in length. Oak is the preferredspecies, although beech, chestnut, and otherhardwoods have been used in the United States.Gambel or scrub oak (Quercus gambelii) is foundin parts of the Intermountain West and can beused for shiitake production. Other oak speciessuitable for growing shiitake are native to Oregonand California. For outdoor production, logsections are inoculated with spawn (a starter mixof fungal mycelium and sawdust or grain) and setaside to allow the fungi to develop. Shade cloth isoften used to protect logs stored outdoors fromexcessive drying caused by direct sunlight. Thedevelopment period is called the spawn run andcan last 6 to 18 months, depending on the log

Figure 1. United States specialty mushroom production for 1987-1995. Data provided by the United StatesDepartment of Agriculture National Agricultural Statistics Service.

4

species, diameter, moisture, and temperature. Atthe end of the spawn run, the logs are transferredto a cool, moist raising yard where the mushroomsdevelop and are harvested. In outdoor systems,most shiitake production occurs in the spring andfall. Greenhouses and converted farm buildingsare used to produce winter crops. A single log maybear five crops of mushrooms. Some other mush-room species can also be grown in basic,nonmechanical facilities.

Much of the increase in mushroom produc-tion is due to the development of high-yieldsystems that depend on precise environmentalcontrols. In 1988, shiitake production in theUnited States was equally divided betweennatural logs and synthetic logs made from saw-dust, straw, corncobs, and various amendments.Eight years later, synthetic log production doubledand now makes up more than 80 percent of thetotal. By using synthetic logs, growers can harvestshiitake mushrooms year-round and producethree to four times the yield in one tenth the timenatural logs require.

High yields and rapid production cycleswith most mushroom species require specializedfacilities. Substrates (materials the mushroomsgrow in) are blended and packaged into specialplastic bags or jars. Typical substrates includesawdust, grain, straw, corn cobs, bagasse, chaff,and other agricultural byproducts. Containers andsubstrate are then either pasteurized orsterilized to remove contaminatingmicroorganisms. Hot water baths canbe used for pasteurization, but steril-ization may require a commercialsteam sterilizer. Some growers com-post substrates outdoors and then sterilizethem inside heated sheds.

After being pasteurized or sterilized, thesubstrate-filled containers are inoculated with thedesired fungi and placed into spawn run roomswhere temperature, humidity, light, and some-times atmospheric gases are carefully controlled.When the spawn run is complete, the substratemay need additional treatments before mush-

rooms develop. Many mushroom species requirechanges in temperature, moisture, substrate, and/or light to begin fruiting. Large-scale, highlytechnical facilities are expensive to construct andoperate. Whether you use a basic or sophisticatedproduction system, growing mushrooms is laborintensive.

A third option for mushroom production isto harvest mushrooms from the wild. In thePacific Northwest, large quantities of morel,chanterelle, matsutake, and bolete mushrooms areharvested each year. Offsetting the advantage ofno production facilities are high labor costs,unpredictable crops, inclement weather, andincreased transportation. Although researchershave made progress in domesticating morelmushrooms, most are still harvested from thewild. To learn more about wild mushroom har-vests, refer to the For more information sectionlater in this publication.

5

Management

Commercial mushroom production requires highlevels of management input and skill. A commonmistake new growers make is to believe thatgrowing mushrooms is easy. Each species requiresspecialized treatment to produce consistent yieldsof high-quality, marketable mushrooms. Anothercommon mistake is to start too large and diversifytoo soon. As mentioned earlier, mushroomgrowing is labor intensive. It is easy to quicklybecome overwhelmed with the physical require-ments of mixing and sterilizing substrates, order-ing and inoculating with spawn, maintainingenvironmental controls, harvesting and processingmushrooms, marketing, business management,and many other tasks that go with a commercialenterprise.

Trying to learn a single crop is difficultenough, and mastering several different mush-room crops at once may be impossible. Somespawn suppliers offer starter kits and instruc-tions. Using small starter kits will allow you togain some experience with different mushroomcrops with minimum investments in time andmoney. Keep detailed production and financialrecords to evaluate which crops show commercialpromise.

As with any other crop species, not allmushrooms are created equal. Different strains orlines of shiitake, for example, vary in color, size,shape, firmness, cultural requirements, and yields.

Only the largest mushroom growers producetheir own spawn. Spawn culture is highlytechnical and requires specialized facilitiesand equipment. Most growers rely oncompanies that specialize in producinghigh-quality spawn for their culture

material.If you are not already

experienced in mushroomproduction, start smalland expand slowly. Taketime to learn all you can

about growing and selling

mushrooms while you gain some practical experi-ence. Study the market and decide which types ofmushroom crops and production systems wouldbe enjoyable, feasible, and profitable for you. Joingrowers’ organizations and subscribe to newslet-ters about mushrooms. Universities sponsorconferences and workshops on specialty farmingin general and mushroom farming in particular.

Marketing

The greatest challenge all specialty farmers face ismarketing. Deciding what to grow, where andhow to grow it, who makes up the target market,and how to package and advertise are just a few ofthe things that go into marketing. A thoroughstudy of mushroom production and marketing isimperative before buying equipment and startingeven a small-scale operation.

The demand for specialty mushrooms ishuge, particularly in Asian countries. Trying tomarket internationally, however, is beyond theresources of most small and medium-sized compa-nies. China produces nearly 1.5 billion poundsand Japan more than 300 million pounds ofshiitake each year. Likewise, national markets inthe United states are dominated by large compa-nies and produce brokers. Most small-scalemushroom farmers in the United States focus onlocal markets. Specialty mushrooms are bestknown and most widely used among certainAsian cultures, and local sales may be best inareas with large populations of Asian-Americans.Mushrooms are sold fresh, dried, or processed.According to the U.S. Department of Agriculture,most specialty mushrooms grown in the UnitedStates are sold fresh.

For wholesale, consider locally-owned oroperated groceries, restaurants, and health foodstores. You can make direct sales to customersthrough farmers markets, subscriptions, and on-farm sales. Forming a cooperative with othergrowers in your area can improve marketing byincreasing quantities and variety. Particularly fordried or processed mushrooms, you might con-

6

sider selling direct to consumers through mailorder or the Internet. Whatever your marketingstrategy, remember that quality and grading arecritical in producing and selling mushrooms.Before deciding on any market strategy, thor-oughly explore local, state, and federal regulationsthat will affect your growing, processing, andshipping.

Opportunities and risks

Mushrooms offer small-scale growers severaladvantages. Growing facilities range from logsstacked outdoors under a shade cloth to sophisti-cated production chambers with precisely con-trolled temperatures, humidity, and light. Spe-cialty mushrooms are high value crops, typicallyselling at wholesale prices of $3 to $6 per pound.Depending on the production system, you cangrow large quantities in a small space.

Mushrooms can be delicious and are rich inproteins, vitamins, and minerals while containinglittle fat. Demand for exotic culinary mushroomshas greatly increased in recent years and shows nosign of slowing. Certain mushroom speciesreportedly provide health benefits, including anti-cancer and anti-viral properties and the potentialto reduce cholesterol and the risk of heart disease.With alternative medicine becoming more widelyaccepted, opportunities for health foods anddietary supplements should continue to increase.

Researchers have developed methods ofeffectively and economically producing manyspecies of edible mushrooms. These production

systems use agricultural waste products, includingstraw, chaff, sugar beets, corncobs, waste paper,sawdust, coffee grounds, livestock manure,slaughterhouse wastes, and other materials. Oncethe substrate has been broken down duringmushroom production, it can be sold for organicfertilizers and compost.

With opportunities, however, come risks. Ifyou grow mushrooms outdoors, weather is animportant consideration. Mushrooms are stronglyaffected by temperature, humidity, and light. Acold snap, heat wave, or drought can reduce yieldsor favor the development of undesirable “weedmolds.” Outdoor production also generallyprovides lower yields and longer production timesthan are available with indoor facilities. Outdoor-grown mushrooms also fruit seasonally, producingcrops when supplies are greatest and prices arelowest. People are not the only ones who enjoyfresh mushrooms. Insects and animal pests canbecome serious pests for mushroom farmers,especially with outdoor operations.

Indoor growers also face challenges. Preci-sion-controlled indoor facilities are expensive tobuild, operate, and maintain. Operating andmaintaining environmental controls require acertain degree of technical expertise. Cleanlinessis critical in controlled environment productionsystems to ensure high-quality products free ofpotentially toxic contaminants. Pest control is alsocritical because some insect pests, such as fungusgnats, flourish under the same conditions thatfavor mushrooms. With high yields and shortproduction cycles, harvest windows are short.

7

Whether you grow mushrooms indoors orout, labor should be a serious concern. Mushroomproduction is labor intensive. Before expandingbeyond a small operation that you can maintainyourself, ensure that you have a consistent supplyof laborers willing to work for you at competitivewages. Be prepared to provide training for yourworkers. Know and comply with worker protec-tion regulations.

While demand for specialty mushrooms hasincreased greatly in recent years, so has produc-tion. Between 1986 and 1994, worldwide produc-tion of shiitake mushrooms increased 158 percentand oyster mushrooms by 371 percent. At thesame time, the prices growers received dropped.For United States’ shiitake growers, prices de-creased from $5.42 per pound in 1986 to $3.09per pound in 1997. From 1995 through 1997,wholesale prices for oyster mushrooms decreasedfrom $2.49 to $1.90 per pound. Only increasedyields and shortened production cycles have keptgrowers profitable. Oyster and shiitake mushroomproduction in the United States peaked in 1996and decreased in 1997 (figure 1).

The development of improved productionmethods and increased demand has motivatedlarge companies around the world to start growingmushrooms. Increased competition means thatgrowers must carefully consider and managemarketing. Be prepared for market slumps causedby overproduction. Good practices include havingbackup plans in place for selling to alternativemarkets or preserving and storing your mush-rooms for later sales.

Another challenge growers face is liability.Oyster mushrooms, for example, produce sporesthat cause allergic reactions in some people.Provide the appropriate safety equipment for yourworkers, including masks or respirators to protectthem from fungal spores. Know what to do if anemployee experiences an allergic reaction. Perhapsa greater concern is the risk of being sued by aconsumer who becomes ill and accuses you ofselling contaminated produce. Agricultural wasteproducts used for substrates sometimes contain

pesticides, medicinal residues, and other chemi-cals that can be concentrated during recycling.They may also contain toxic microorganisms,such as aflatoxin. You can reduce liability risks byensuring your substrates are free of pesticides andother toxins; using only high-quality, commer-cially-grown spawn; and maintaining hygienicconditions and excellent production records.Liability insurance would also be advised.

Be cautious about claims of medicinal andhealth-related properties. While mushrooms havelong been used as medicines and health foods,supporting scientific evidence for their use isoften sketchy, at best. In selecting mushroomcrops, stay with those proven safe for humanconsumption. Don’t experiment! Remember thatsome fungi produce deadly toxins. Safe andeffective research on the effects mushrooms haveon humans requires highly specialized trainingand facilities, and is closely regulated by healthagencies. Avoid unsupported health claims inyour marketing. Ensure that you meet or exceedlocal, state, and federal laws regarding productionand marketing of food products. Products mar-keted as medicinal must meet United States Foodand Drug Administration regulations.

In conclusion

Specialty mushrooms offer small-scale growersopportunities, however, there are risks. Do yourhomework before investing in land or productionfacilities. Read several books by different authorsto get a balanced view of mushroom farming.Treat claims of quick and easy profits with greatskepticism. Visit several mushroom growersoutside your area to gain a grower’s-eye-view ofwhat it is like to produce and market mushrooms.Join mushroom growers’ organizations and attendconferences and workshops. Calculate your costsfor starting and operating a mushroom farm,including labor costs. Determine break-evenpoints and the time you will need to recaptureyour investment. Be conservative in estimatingyields, sales, and profits. Plan on supporting yourmushroom operation with savings or off-farm

8

work until you pass the break-even point. Inshort, give yourself every chance for success.

For more information

Extension publicationsThe University of Idaho has many pamphlets,video tapes, and software packages on establishingand operating agricultural enterprises. To orderpublications or a catalog, contact AgriculturalPublications, University of Idaho, Moscow, ID83844-2240. The Internet address is http://info.ag.uidaho.edu. Publications of particularinterest include:Forming a cooperative. CIS 840.Business and the family. CIS 940.Licenses and legal requirements. CIS 941.Conduct your own garden research. CIS 1041.Marketing your produce directly to consumers.EXT 742.Specialty farming in Idaho: Is it for me? EXT 743.Specialty farming in Idaho: Selecting a site. EXT744.Special Forest Products. CIS 952.Cultivation of Shiitake on Natural and SyntheticLogs. 1997. D. Royse. Order by contacting thePublications Distribution Center, PennsylvaniaState University, 112 Agricultural AdministrationBuilding, University Park, PA 16802. Phone: 814-865-6713.

Government publicationsThe USDA Forest Service has many publicationson harvesting special forest products, includingmushrooms. Many of these publications can bedownloaded from the Internet or ordered from on-line catalogs. An excellent starting point is:USDA Forest Service Pacific Northwest ResearchStation , P.O. Box 3890, Portland, Oregon 97208-

3440, phone: (503) 808-2592. Http://www.fs.fed.us/pnw/.

Two publications of particular interest fromthe PNW Research Station are:Molina, R., et al. 1993. Biology, Ecology, andSocial Aspects of Wild Edible Mushrooms in theForests of the Pacific Northwest: A Preface toManaging Commercial Harvest. PNW-GTR-309.Hosford, D. et al. 1997. Biology and Managementof the Commercially Harvested AmericanMatsutake Mushroom. PNW-GTR-412.

BooksMany books are available on growing and usingmushrooms. For a detailed list consult Books inPrint at your library or bookstore. Some examplesinclude:

Przybylowicz, P. and Donoghue, J. 1989. Shiitake GrowersHandbook. Kendall/Hunt Pub. Co., Dubuque, IA.

Stamets, P. 1993. Growing Gourmet and MedicinalMushrooms. Ten Speed Press, Berkeley, CA.

Weber, N. 1995. A Morel Hunter’s Companion. ThunderBay Press, Lansing, MI.

Journal articlesRoyse , D. 1997. Specialty Mushrooms and Their Cultivation.

Horticultural Reviews, Volume 19, pp 59-97. ISBN 0-471-16529-8.

InternetThe Internet provides access to hundreds ofsources of information on mushroom cultivationand use.

About the author

Danny L. Barney is an extension horticulturistand associate professor of horticulture with theUniversity of Idaho Department of Plant, Soil,and Entomological Sciences, and serves as Super-intendent of the Sandpoint Research & ExtensionCenter.

CIS 1077 $1.50 250 2-00