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Increased costs squeeze mushroom farms

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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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