6/25/2019

The Economics of
Small-scale
Indoor Mushroom
Cultivation
Stephen Russell

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Indoor vs. Outdoor Cultivation

Indoor = Gold Standard for Cultivation

● Predictability
● Year-round harvests
● Ongoing maintenance

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Outdoor Cultivation on Logs

Typical Process

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Typical Process

Outdoor Cultivation on Logs

● Advantages
○ Easy to start
○ Low maintenance
○ Low cost
○ High chance of success
○ Can still cultivate most common edible species
● Disadvantages
○ Typically takes a year before the first harvest
○ Fruitings are dependent upon weather patterns
○ Harvests are at unpredictable times
○ Unpredictable yields

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Commonly Cultivated Species

● Oyster
● Shiitake
● Lion’s Mane
● Maitake
● Reishi

● Not White Buttons (typically because of economics)

Species Unable to be Cultivated

● Mycorrhizal species
○ Chanterelles
○ Black Trumpets
○ Boletes
○ Hedgehogs
○ Lactarius
○ Etc.

○ Morels
○ Truffles

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Oysters

Shiitake

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Lion’s Mane

Maitake

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Reishi

Typical Growing
Process Indoors

fungi.com

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The Space & Equipment

● Prep area (and sterilization)
● Culture lab
● Incubation area
● Growing chamber

Culture Lab

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Culturing Fungi

Glovebox or Flowhood

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Spawn
● Grain spawn
● Sawdust spawn

YOU CAN BUY

PREMADE SPAWN
INSTEAD OF SETTING
UP YOUR OWN LAB!

Sterilization

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Incubation Area

Growing Area

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Growing Area

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Economics are fairly straightforward

● Startup costs
● How much space (and other fixed costs) do I have for production?
● How good of a yield can I achieve?
● How much can I sell and at what price?

Startup Costs
Common large expenses:

Flowhood (~$500)
Pressure Cookers (~$200/ea)
Growing Area Setup - Racks/Environmental Controls

Largest startup cost is time/labor of getting the experience in the process.

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How much space do I have?

● Revenue/profit per square foot – maximize
● Can I do this at home?
● Do I need to rent/buy a dedicated facility?
● How many blocks or bags can I make in this space?
● What is the cost to make these? (Including labor)
● Cost environmental controls?
● Fixed costs?

How good of a yield can I achieve?

● Known through experience.
● Test different substrate – species/strain combinations.
● Biological efficiency of each?
● Time to colonize, time to begin fruiting, time to maturation

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How much can I sell and at what price?

Shiitake wholesale vs retail

$5 - 15

Assuming 200 bags per month

at $5 at $7 at $10 per at $5 at $7 at $10

per lbs per lb lb per lbs per lb per lb

1 lb per bag 1000 1400 2000 1 lb per 889 1,289 1,889

bag

1.5 lbs per 1500 2100 3000 less expenses 1.5 lbs 1,389 1,989 2,889
bag to create bags per
(labor, other bag
expenses not
included)

2 lbs per 2000 2800 4000 2 lbs 1,889 2,689 3,889

bag per
bag

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Rye Grain Rye Usage

$0.22 per pound

1 cup = 7 oz

Quarts = 1

Quarts = 0.4375

1/2 Gallons = 3

1/2 Gallons 1.3125

10 quart jars per week

4 lbs per week

228 lbs per year

$50.05 total rye per year

Wheat Bran

Bran

Oat or wheat bran

$0.28 per pound

168.00 lbs per year

$47.04 per year

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Propane
Propane 6 bags * 8 cookings = 48 $2.70 per
bags per tank gallo
n

15 lbs = 3 $0.37 per $0.17 per bag

gal bag
retail

0.0625 gal per 150 gallo

bag ns
per
year

First Year Numbers 12.5 gal per $405.00 cost

month per
year

Sawdust
● Sourcing is the largest concern, rather than cost.

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A Simplified Production Schedule

Always other Per Month

costs to consider
Lab consumables 300

Building Cost 1000

Electric 300

Taxes 200

Insurance 250

Truck/Delivery 200

Misc 1000

Phone/Internet 100

Part Time Labor 800

Health Insurance 300

Totals $4,570.00

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What are the most likely sources of failure

Contamination!
Failure of environmental controls.
Lack of maintainence

Short shelf life

Getting into commercial cultivation

Start small as a side project
Build capacity as you build your market

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