Increased costs squeeze mushroom farms

Issue Date: February 19, 2020
By Kevin Hecteman
Chris Krebs, general manager of Farmers Fresh Mushrooms California, looks over a tray of white agaricus mushrooms in one of his operation’s growing rooms in Colusa. These rooms are maintained at 62 to 65 degrees to keep the mushrooms from growing too fast. California mushroom farmers are challenged by a shortage of employees and competition from regions of the U.S. where production costs are lower.
Photo/Kevin Hecteman
Recently harvested brown agaricus mushrooms await packing at Farmers Fresh Mushrooms California in Colusa.
Photo/Kevin Hecteman

Rising costs and pressure from competitors foreign and domestic are putting the squeeze on California's tight-knit mushroom community.

"A stand-alone mushroom farm in California does have external pressures that other places don't have," said Chris Krebs, general manager at Farmers Fresh Mushrooms California, which recently bought Premier Mushrooms in Colusa.

Krebs' farm grows agaricus mushrooms, the familiar white and brown varieties, with the output going to Northern California customers as far south as Modesto.

California had 2.3 million square feet of agaricus mushrooms in production in 2018, a nearly 25% drop from a year earlier, according to the U.S. Department of Agriculture, with mushroom sales totaling $195.5 million.

By contrast, Pennsylvania—the top mushroom-growing state in the U.S.—had 17.7 million square feet of agaricus production in 2018, with sales totaling $557 million.

Pennsylvania also has a lower minimum wage: $7.25, compared to California's $13 for employees of larger employers, which will rise to $14 next year and $15 in 2022.

"For the California mushroom business, it's pretty tough right now to try to stay up, because we're competing against lower wages in Canada and back east," said Don Hordness, who runs Countryside Mushrooms in Gilroy.

In addition, he said, shipping mushrooms into California is cheaper than shipping out.

"We're kind of a backhaul state," Hordness said. "If you bring in a truck from, let's say, Pennsylvania, it will cost you about $2,500, maybe $3,000. And to ship out, it'll cost you about $7,000."

Hordness said he's nearly maxed out on production, with his mushrooms going to food service, retail and private-label uses in California.

Mushroom farmers, unlike many of their counterparts, work indoors, but Krebs said he's perpetually shorthanded even though his farm offers steady, year-round work with good pay and benefits.

"There's a group of people that would prefer that over seasonal work," Krebs said, noting that he does have a stable workforce—some of his people have been on the job for 20 years, he noted.

Roberto Ramirez, owner of Mountain Meadow Mushrooms in Escondido, cited the state's agricultural overtime law as his top employment concern. The law will gradually lower the overtime threshold for agricultural employees from six 10-hour days per week to eight hours per day and 40 hours per week. As of this year, overtime kicks in after nine hours in a day or 50 in a week for employees of larger employers.

That will simply lead to shorter workweeks, Ramirez said.

"No employer is going to say, 'Yeah, I'm going to pay you 20 hours of overtime and do the same amount of work that you were doing when you were doing 60 hours before,'" he said.

Ramirez said his operation is seeing increased demand for organic crimini and white mushrooms, a trend he attributed to increasing customer demand for organic products.

Though the growing process is the same, being organic means ensuring raw materials for compost—such as straw, cottonseed meal and almond shells, among other things—meet the standard.

"You need to be very aware of where it's coming from, how they do their own process," Ramirez noted.

Mushrooms are grown under strict climate control, with rooms kept at 62 to 65 degrees, said Prabhdeep Gill, production manager for Farmers Fresh Mushrooms California.

"If the temperature goes up, then we are giving it the right conditions to open and spread the spores," which farmers want to avoid, he said.

A typical growing cycle, from compost making to final harvest, takes 11 to 12 weeks, he said. Making the compost—Gill uses wheat straw, chicken manure and gypsum—takes about two weeks; once it's ready, he'll add spawn, which is the mushroom version of seed.

"It is about a two-week process, where we grow the seed in the compost, and then it will go into casing, where we add peat moss," Gill said. "And that's where the mushroom starts to germinate."

The first mushroom should appear about eight weeks in, he said; the crop will be harvested in three rounds, or breaks. Once the last break is done, the spent compost will go to another company to be repurposed as soil amendment for other crops.

The mushrooms are stored and shipped at 34 to 36 degrees, Krebs noted.

Even with all the challenges, Krebs said he thinks mushrooms have a bright future, noting that customers seek out his product and his mission is keeping up with the public's appetite for the nutrient-rich fungi.

"There's investment going on here to support the Northern California mushroom demand," he said. "We have customers that have been with us for many years."

(Kevin Hecteman is an assistant editor of Ag Alert. He may be contacted at khecteman@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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