The Ultimate Guide to Farming Mushrooms

The Ultimate Guide to Farming Mushrooms

Welcome to the Ultimate Guide to Farming Mushrooms!

In this we will look a the different aspects to farming mushrooms for profit or as a career. Written by Tom Brain, owner and creator of the Oak and Spore mushroom farm, a highly successful and technologically modern farm based in Christchurch, New Zealand. 

A Message from Tom Brain - "In 2018 I started my farm in a two car garage in the middle of a suburban town, servicing a single farmers market. I quickly outgrew my two car garage, and was unable to grow enough mushrooms to meet demand. It was at this point, with purchase orders for mushrooms flooding in, I started my new farm in 2021, and have seen consistent growth ever since. I love mushroom farming, and I hope you will love mushroom farming too"

Tom brain holding a large new zealand lions mane mushroom

Oak and Spore owner Tom Brain holding a large New Zealand Lions Mane. Technically this is closer to a Coral Tooth, but as Lions Mane is prohibited in New Zealand, it's adopted the name 'New Zealand Lions Mane' in its place.


Why should I grow mushrooms?

Mushroom farming has become popular in recent years, not only because of the easy access of information online, but for other important reasons as well. Currently we are seeing a breakdown of local, national, and international supply chains. Combined with global inflation pressure, food supply is being hit especially hard. Commodities cost more, transport costs more, everything cost more! So, where is this taking us?

Mushrooms to save the day! Mushrooms are an amazing crop, in that you can realistically churn out about 50kg (110lb) per week, from an area the size of about 8-10 square meters (90 square feet). This coupled with the fact that they demand very minimal water input, means you can grow a significant amount of mushrooms in a very very small space. Second to this, mushrooms eat very low value inputs, and create a very high value crop. There has to be a catch though, right? There is, but it basically works in our favor. Gourmet mushroom species often don't have the shelf life of their button counterparts, and they require slightly more labor to grow. These factors combined mean that the big farms avoid them, and it gives small farms a perfect set of circumstances at which they can flourish. 

Mushroom farming can be conducted in a small space, consumes only low value inputs, doesn't use much water, produces a high value output, and commands top dollar at farmers market. It really is the perfect crop to grow! We will cover off more of that later...

Income potential from growing mushrooms

What is the true income potential from growing mushrooms? Well, let's take a look. I have been growing mushrooms for about 4-5 years now, and have seen consistent growth. Our income started low, I remember my very first farmers market, taking home about $450. I was rapt and it only grew from there. As of 2022 I aim to earn about $1200 per farmers market, as I have dramatically increased my sales techniques, along with my product. But that's just from a single farmers market. I have multiple other avenues of sales, most of which dwarf the farmers market income now days. 

But let's answer the question at hand. What is the potential income you can earn? Here in New Zealand, oyster mushrooms sell for about $50NZD per kg at a farmers market. That's about $13.6USD per lb. Converting it into USD is misleading, as the NZD is currently extremely poor against the USD, but the conversion is there for the sake of honesty. So at my first farm, in my two car garage, when I was growing 50kg per week, I was able to sell it for a maximum amount of about $2500 per week at farmers markets. Yearly that's $130,000. Not, naturally I did not sell it all at farmers markets for $50 per kg. I sold a lot to wholesalers, who then on-sold it to restaurants. I could have sold it direct to restaurants myself, but chose the easier option, even if it did cost me somewhat. Wholesalers purchased the mushrooms from about $25 per kg, and I would generally sell about half my crop to them. This means I would sell about 25kg at farmers markets, or $1250pw, and 25kg wholesale, or $625pw. Combined this is about $1875. Yearly this equates to about $97,500 best case. All from a two car garage! That's not even including sales of grow blocks.. which was significant.

You can see the income from a small area is there, I have proved it. You can see on my YouTube channel where I started from, and where I am now. 

If you're more interested about how much you can earn farming mushrooms, checkout this link to my in-depth course on how to generate income with farming mushrooms. 

high value mushroom being farmed for sale at a farmers market

Tom Brain with a rack of growing mushrooms. These mushroom have another 1-3 days worth of growth.

What do I need to start farming mushrooms?

So you think mushroom farming is for you? Lets look at the three things you need to start with. 

1. Space! Ideally not inside your (carpeted) house. Mushroom farming can get messy. Dropped mushrooms, water spillages, you name it. The ideal place to start is in a garage, with an additional area for substrate preparation. When I started I had a 2 car garage. This served as my fruiting room and clean room. I had an additional single car garage (not accessible by cars) tucked in behind this garage. This was my incubation room and storage room. And I had a covered outdoor area to prepare and sterilize my substrate. This was enough to grow 50kg per week. Smaller than this and you will have to remain vigilant and organized to ensure you have the space needed. That begin said, you can easily create more space where needed. For example you can buy a secondhand outdoor walk-in chiller, and convert it into an outdoor incubation room by connecting an air conditioning unit to it.

If you want to go larger than this, and have the space for it, then go for it! My current farm consists of two buildings. One for lab, incubation, harvesting, and fruiting, and the other for substrate preparation and sterilization. I also have two outdoor chillers. One as a pre-conditioning room, and one as a legitimate fridge. 

To farm mushrooms it is recommend to have around 60 square meters, or 650 square feet at minimum to start working with, and you will probably want to expand shortly after that, going well. 

2. Time! Time is a given. To own and run a successful mushroom farm you need time to build a successful mushroom farm. This is down to your own preference. If you just want to grow 10kg per week as a small side hustle, then you're not going to need more than a couple hours to make some bags, and harvest some mushrooms. If you want to grow 50kg per week, then you'll need more hours to make 5x the bags, and harvest 5x the mushrooms. At my first farm I was able to grow and sell 50kg week working part time hours. Naturally I worked more than this, as I wanted to business to expand, and expand fast. 

The initial startup will command more hours, but once you're set up and growing, you can take a step back and relax somewhat. You can even hire someone to do all the work, while you just sell at a farmers market. It's almost a passive income.. almost. 

3. Money... Yes, you can't start a farm with nothing. Thankfully the barrier to starting a small scale farm is relatively low. We do recommend having a few thousand ready to use, everything adds up! You can keep costs down by looking for second hand items, such as grow tents and stainless steel tables. 

Our online course helps predict the hours required to grow the amount required. Check it out to find out more. 


The Parts of a Mushroom Farm

Mushroom farms are often divided up into four parts, but at the Oak and Spore farm, we divide ours into five parts listed below

  1. Substrate preparation area
  2. Inoculation lab/clean room
  3. Incubation room
  4. Fruiting room
  5. Packing area

1. Substrate preparation area

This is where we mix our substrate, fill our grow bags, and finally run them through the sterilizer. We store all our raw product out here as well. We mix our substrate in a ribbon blender, before manually filling our bags (yes manually, I have filled countless thousands of bags in my life). After that they are placed in my homemade steam sterilizer connected to my homemade boiler. This machine can sterilize about 500kg, or 1100lb of substrate in one run. At the time of writing this I run our sterilizer 3 times per week. So we are producing about 1.5 metric tonnes of sterilized substrate each week. I've found it helps to have ample room here. More room to fill bags reduces stress when doing the tasks multiple times per week. Realistically you can manufacture your mushroom blocks in about 9 square meters if you're only doing a few. We use about 40 square meters currently, but we do hundreds of bags each week. 

We recommend at least 9 square meters for preparing mushroom substrate

mushroom substrate being prepared in a ribbon mixer

The ribbon mixer used to prepare mushroom substrate prior to sterilizing.

2. Inoculation Lab / Clean Room

This is where the magic happens. You inoculate all your substrate in this room, alongside making your own spawn if you choose to. Initially we recommend buying spawn from a reputable supplier, and using that to inoculate your own bags. This room needs a Hepa flow hood (not the scientific type) so you can inoculate your substrate without the risk of contamination like Trichoderma. The clean room on my first farm was very small. Less than 5m2. It was a squeeze, but it did the job great. With such a small size, the flow hood was able to clean the area really well, and I had very low contamination rates. 

We recommend around 6 square meters for an inoculation room / clean room

Inside the clean room or lab of a mushroom farm

The Oak and Spore inoculation lab / clean room. The flow hood against the wall is kept on during work hours.

3. Incubation room

This where where you put your inoculated mushroom blocks to colonize for a number of weeks. Depending on the strain, they can sit in here from about 12 days (fast Oyster species) to 3-4 months (slow Shiitake species). In essence, incubation rooms can be very small or very large, depending on species. They need to be insulated, have some slight airflow, and be temperature controlled with an air conditioning unit. 

We estimate it takes about 4m2 or 45 square feet to incubate about 150x 5kg mushroom blocks on a two week cycle. Meaning each week you put in 75 more blocks, take out 75 blocks, at there is always 150 blocks inside. You need to be able to stack mushroom blocks floor to ceiling, and have a space in between them for airflow.

Our online course has a calculator which takes all the inputs from your farm, and calculates the approximate space required.


hundreds of mushroom blocks incubating before being placed in a fruiting room

Mushroom substrate blocks incubating inside the Oak and Spore incubation room. Most substrate spends two weeks in here. 

4. Fruiting Room

This is the part where you become a true mushroom farmer! All going well, you've made blocks, inoculated them, incubated them for the required timeframe, now they are ready to grow mushrooms!

A fruiting room needs four things

  1. Light - A natural color, around 6000k, and bright enough to read a book.
  2. Humidity - High humidity for pinning, around 90-95%, and slightly lower for fruit body development 75-85%. We run our finishing room at 75%.
  3. Fresh Air Exchange (FAE) - This means keeping the CO2 low! Under 1000ppm. I keep our rooms below 800ppm. 
  4. Temperature - All mushrooms like a specific temperature. 

There are multiple ways all these can be achieved, and some can get fairly technical. But most are very easy to do initially. Light is done with lights on a timer. Humidity is achieved with a humidifier on a humidity controller. FAE is done with an extractor fan on a timer or controller. The correct temperature can often just be achieved by doing nothing at all, as mushrooms might be suited to your climate. Otherwise things like heaters or air conditioning units help. 

This is a very in depth topic, even we are still learning the nuance of climate control. It needs its own in-depth write up, which we will do at some stage. 

We estimate you need about 9.2 square meters or 100 square feet to grow about 60kg of mushroom per week. You can calculate how much space you need for the income with our online course available at the link below. 

mushroom growing inside a mushroom farm

Inside one of the Oak and Spore Mushroom fruiting rooms. Each rack holds between 30 to 50 blocks, and are harvested from both sides.

5. Packaging Area

Once you start growing a decent amount of mushrooms, you will want an area you can prepare them for sale. In our own packaging area we have plenty of stainless steel benching available, and boxes everywhere! (Why do boxes take up so much room?!). We harvest our mushrooms into plastic tubs to be placed in the fridge. From the plastic tubs they then get packaged into cardboard boxes for sale. At my first farm I did this all from one small stainless steel table. Realistically you can use a small area, but you will need to be organized about it. I started with one double door fridge, that you can see in a couple of my old YouTube videos. I could place upwards of 50kg of harvest into this fridge, so it worked well. Today my harvest area is much larger, and I have a 2.4m x 2.4m walk-in chiller for my mushrooms. 

The packaging area should be similar to that of a household kitchen for space, but you can go smaller. 


The Mushrooms You Grow

Types of mushroom you can grow

Understanding what types of mushrooms to grow, and what will make a good profit, is half of the journey of growing mushrooms. You are not going to run a profitable small scale button mushroom farm, and you are also not going to run a profitable small scale pink oyster mushroom farm. Both of these species have aspects which erode the ability to be profitable at a small scale. Buttons are mass produced, and therefore command a low price point. Pink Oyster have a very short shelf life, so you will end up tossing half the crop out if no one orders them the day of harvest. 

We have found success with focusing on one specific mushroom, getting very good at growing that specific mushroom, and offering a few other complimentary mushrooms to sell alongside it. The mushroom we grow is the Italian Oyster, and the main driving factor for that is because we are in New Zealand, and most other Oyster species are prohibited. If I could I would focus on the Ostreatus as I believe it is superior to the Italian. Some weeks we produce 100% Italian, and other weeks we produce 70% Italian, 15% Pink, and 15% Shiitake. Whatever we produce, the overwhelming majority will be Italian, and we are very good at growing it. 

One other reason for focusing on one mushroom species is that they all want a specific environment, and what is optimal for one, might not be optimal for another. Our grow rooms are kept at an optimal condition for Italian, but that can have a negative affect on Shiitake, as Shiitake like a colder growing climate. Focusing one one species means you can keep the grow room conditions suited to that species.

Some favorite mushroom species for small scale farms to grow are 

  • Lions Mane - Hericium erinaceus
  • Blue/Pearl Oyster - Pleurotus Ostreatus
  • Italian Oyster - Pleurotus pulmonarius
  • Pink Oyster - Pleurotus djamor
  • King Trumpet - Pleurotus eryngii
  • Enoki - Flammulina veluptipes / filiformis
  • Shiitake - Lentinula edodes
  • Yellow Oyster - Pleurotus citrinopileatus
  • Coral Tooth - Hericium coralloides (often mistakenly called Lions Mane in New Zealand)
  • Chestnut - Pholiota adiposa

When grown well, all of these mushrooms fetch top dollar at a farmers market. Some are more commercially grown than others. Shiitake and Enoki being two of those types.

pink oyster mushrooms growing out the side of a bag

Pink Oyster mushrooms (Pleurotus djamor) are a vibrant and tasty mushroom variety, but dislike cold weather and have a very short shelf life. People note it has a subtle note of bacon to its taste profile. 

What is the value of gourmet mushrooms

The value of fresh gourmet mushrooms is very subjective to the nation and area you live in. You can usually fetch a higher price in high income areas, where customers are looking for something different for the dinner plate. Restaurants will also pay for high quality gourmet mushrooms. 

Here in New Zealand the going restaurant price is around $40 per kg, with farmers market prices fetching around $50 per kg. This price has been steady for a while, and if anything it will only increase with time. 

It's not uncommon to see about $16usd per lb, or $50nzd per kg. 

Oak and Spore selling mushroom at their first farmers market

The very first farmers market Oak and Spore attended. All mushrooms were sold out that day.

Where to sell you mushrooms

Here at Oak and Spore we focus on three avenues of fresh mushroom sales. 

  1. Direct to customer sales
  2. Restaurant sales
  3. Retail sales

Direct to customer - Our direct to customer sales are conducted at a local farmers market, and it's here you can get the highest price for your produce. Alongside fresh mushroom sales, you can also sell other things like dried mushrooms, mushroom grow blocks, or anything else you can produce at your farm. Farmers markets are the most valuable place for a small mushroom startup to sell mushrooms. 

Restaurant sales - Restaurant sales are an extreme reliable and profitable method of selling mushrooms. In a decent sized town it can be easy to quickly get repeat customers who will buy mushrooms each week. Restaurants pay a good price, not as high as farmers market, but still good. Due to their repeat nature, we place restaurants on the top of our priority list, and will always supply them, even if it means having no mushrooms left for the farmers market. 

Retail sales - We package our mushrooms up and sell them at retail stores. We still get a good price for them, but there is slightly more work involved, and a slightly higher cost for the inputs. The retailer also wants to take their margin, usually around 30-40%, which comes off the price. Punneted mushrooms in retail stores or supermarkets command the highest price. I have seen priced upwards of $109 per kg here in New Zealand. That's outrageously high...


The Art of Growing Mushrooms

Preparation of substrate

Preparing substrate is a task you will do weekly, and you will get very good at it. Everyone finds their own method to substrate preparation, and there is no set rules for this. Some people pre-mix substrate, as do we on our farm. Some people use a direct bagging technique, which is faster, but you have slightly less control over substrate ingredients. 

The pre-mix method involves using a large ribbon or paddle mixer to mix your substrate ingredients, adding water as it's mixed. With this you can control the specific quantity of each ingredient, or add very small quantities of supplements to each batch, and be sure every mushroom block is exactly the same. We use the pre-mix method here at our farm. We have a ribbon mixer which mixes upwards of 300kg of substrate at one time. 

The other method is direct bagging. This involves using a machine which has hoppers of dry material. When you press a pedal, the machine drops the required amount of each ingredient into the bag, alongside a measured amount of water. This method is much faster than the pre-mix method, although it can be more challenging to make minor adjustment in substrate ingredients.  

The Cost of your substrate

Substrate is one of the COGS involved with growing mushrooms. The cost of substrate is important, because it accounts towards your COGS, and with COGS you can calculate gross profit.
Gross profit = Net revenue - COGS
So cheaper COGS equated to a higher gross profit. 

We purchase substrate by the metric tonne, and generally around two or three tonne at a time. Our substrate costs about $600nzd per tonne, for both wood pellets and soy hull. Soy hull is best found and stock feed or farm animal feed stores, and wood pellets can be obtained straight from manufacturers. 

Preparing your substrate

As mentioned, we mix our substrate in a ribbon mixer, and then bag it into 5kg blocks. From here we place our blocks into our steam sterilization tank, and subject it to near boiling temperatures for about 12 hours. Some people incorrectly call this pasteurization, which it is not. Pasteurization is done at a much lower temperature, and doesn't kill all the microbes. Subjecting your substrate to boiling temperatures kills a significant amount of microbes, leaving your substrate clean enough for mycelium to grow. It's not a perfect sterilization, but it is good enough for mushroom growing. 

Sterilizing is about heat and time. You need to apply heat for a specific time. The higher the heat, the lower the time. At temperatures above 130c degrees, microbes cannot survive for longer than a few seconds/minutes. 

Inoculating your substrate

This parts needs to be conducted in your clean room, or at least in front of a flow hood. The flow hood has a fan which pushes air over a Hepa filter. This Hepa filter takes almost all the dust and contamination out of the airflow, significantly decreasing the chance of contamination inside your blocks. If you use a clean room with a flow hood going, it slowly cleans all the air in the room, removing a significant portion of contaminants. The contaminant amounts will rise when you enter, as dust and other particles will fall off your clothes. But for mushroom growing it doesn't need to be perfect, it just needs to be good enough so your grow bags are free from contamination. Scientific clean rooms and hospitals have a set of standard for their clean room, and strict procedures. Mushroom growing doesn't need this level of procedure unless you are going to be supplying commercial spawn to people.

We use gloves, and wipe all working surfaces down with 70% ISO alcohol prior to use. We open our bags in front of our flow hood, and scoop in a set amount of spawn. We then use an impulse sealer to seal the bags. Once this is done, they are ready to shift into the incubation room.

inoculating mushroom substrate in front of a hepa flow hood
Inoculating a sterilized mushroom block in front of a Hepa flow hood. The spawn gets scooped into the bag while it faces the airflow, then sealed with the impulse sealer next to it. 

Incubating your substrate

Once your substrate blocks have been inoculated, you can move them into an incubation room. Incubation rooms are kept at a specific temperature at all times. This temperature is ideally suited to the optimum temperature that the mycelium likes to thrive in. If the incubation room is too cold, the mycelium growth will slow down, if it's too hot then the mycelium blocks can easily overheat. Substrate blocks do generate their own heat when the mycelium is growing, so the core will always be at least 5c degrees above the room temperature, and this is the reason you often see condensation on the side of bags. 

You also need to consider how much co2 builds up in this room. Our incubation room here at the farm will quickly rise to over 8000ppm CO2, which is a dangerous concentration. We leave the door ajar about 15cm at all times, and it brings down the concentration to around 1500ppm CO2. A stuffy but non dangerous level. 

We do not humidify our incubation room, and humidifying them for bag growth method is not needed. 

We have out incubation room set at 22c degrees at all time, and will incubate for around 14 days for our Italian Oyster species, and a few days longer for Pink Oyster species.

Fruiting mushrooms

This is the fun part. Going well you have a bunch of colonized blocks ready to grow tasty mushrooms! The fruiting room itself can be made from a number of materials. Some people opt to use a hydroponic tent, which is fine. Although these are generally smaller, and slightly harder to clean. Some people frame up a room and cover it with plastic sheet or panda film. This is what I did for my first farm, and it worked well. Some people use refrigeration panel, which I have done for our current farm. I had these panels designed and manufactured to the shape I want. They are insulated and strong, and easy to clean. 

As stated above, we need the four things to grow mushrooms. Light, Humidity, Temperature, and FAE. Once you can achieve these four things in their required amount, it should simulate good conditions for mushroom growth. We cut the sides of our bags open and place them into our fruiting room. Usually within 3-4 days pinning has started, and the mushrooms are well on their way to growing. Due to the average temperature being higher in summer, our mushrooms will grow from bag opening to harvest in as little as 8 days, in winter this can be pushed out to around 12 days. 

People often have issues with fruiting mushrooms and these issues are usually caused by not enough FAE, too little humidity during pin-set formation, or too high humidity after pin-set formation. 

We expect around 1kg of high quality mushrooms off each 5kg block we produce. So if we place 100 blocks in our fruiting room each week, we are targeting 100kg of production each week. We generally two flush our blocks, but sometimes three flush them if we want more mushrooms for a given week. The quality of the third flush is generally decreased somewhat, and the mushrooms stay smaller. 

shiitake mushrooms growing off a substrate of sawdust and wheat branShiitake mushrooms growing off an exposed Shiitake block. When growing Shiitake you completely remove the block from the bag, and the Shiitake mushrooms grow all over it. 

Harvesting your crop

Ideally we aim for our crop to be ready for harvesting on Wednesday, and we will harvest through till Friday. Sometimes blocks are slightly behind others, so the harvest window is often over a couple days. If the weather is warmer, this generally condenses the harvest window, and sometimes all the harvest is completed in one period. The second flush usually comes onto the harvest from around Friday till Monday. 

We like to harvest from Wednesday as most of the restaurants place large orders from here until the weekend, and the mushrooms are in good condition for the farmers market over the weekend. 

There are some rules we adhere to regarding harvesting and packaging of mushrooms. There are outlined in our New Zealand specific agricultural certification which we have obtained. 

Post harvest

Now comes another fun part. You need to sell your mushrooms! As mentioned above, farmers markets are the best place to start, and you can quickly move a good amount of product. You can also be creative and find other areas to sell. Our online course outlines the process we went through to find a $5000 per year client. It really is as simple as sending a few e-mails. You'll quickly find that a couple farmers market, and a few wholesale clients will eat up all you can grow, and you'll be in the position where you need to expand, like we did here at Oak and Spore!

If you are interested in finding out more about how we predict our gross income, and to have a look at the tools we created to help us expand, we run an online course which covers these topics in more detail. Take a look at it through the link below. 

Good luck on your mushroom farming adventure!

 Oak and Spore mushroom grow kits