If a potential investor considers building a mushroom farm to be in their business interest, they must answer some fundamental questions. Having obtained the answers, the right scale of investment and technology can be chosen. Market and geographical conditions impose certain solutions but also limitations. There are many factors influencing the final model and size of the business. In this article we will try to collect the most important factors that we as a technology provider face most often. Without them, it is difficult to properly design a facility.
The first and essential issue is to analyze the local market and see how many mushrooms, in what form, what quality and at what price they can sell. This is a difficult thing to do, but business is rarely easy.
Almost everywhere around the world we can find mushrooms, including button mushrooms in stores. However, it is not always a locally manufactured product. Most often, in the early stages, the market is shaped by importers who import small amounts. Keep in mind that fresh mushroom has a short expiration date, which causes certain logistical problems. It also drives up the price of products placing mushrooms often as a delicacy product that is not widely available. By simply replacing expensive imports with local production, it is possible to significantly increase sales volume. A fresh, good quality, locally produced product at a reasonable price is able to win one’s heart much faster. Based on our experience, we noticed that customers who trade in this product, more easily make the right decision about the size of their production.
To build any production facility, funds are needed. It doesn’t matter if they come from the bank, grants or your own savings. Everyone wants the investment to pay back within a certain period of time. You can then turn the question around and start from the scale of money the investor is able to allocate to the investment, but I would suggest this approach rather in developed markets.
To analyze the profitability of a project, it is important to answer the questions about compost and casing being a major part of production costs:
- where to get compost and casing from?
- how much will it cost?
- will growing mushrooms on imported compost be profitable?
- is it necessary to invest in your own compost production and is it possible?
- which compost to choose from: which phase, in blocks or in bulk?
In order to produce white button mushrooms and other kind of mushrooms, the essentials are the so-called compost or substrate on which they grow. For white button mushroom, compost and a casing soil will be needed. In developed markets, it is easy to find suppliers fairly close by. The problem begins when the compost needs to be transported for a long time, approx. over 12-18 hours during the summer. Phase III compost in bulk (by far the most popular in the world) cannot be driven far, because it is very active biologically and it heats up during transport. Some compost producers have appropriate facilities for cooling compost down, but it still does not solve the issue for very long deliveries. An alternative can be compost blocks cooled down to low temperatures, loaded on a trailer or in a container with efficient cooling. Properly prepared compost loaded in a refrigerated container will reach the customer worldwide. It should be mentioned that the choice of compost phase and the size of a single transport determines the size of the growing rooms as well as the number of them in the facility.
To sum up the compost matter – it is necessary to find a supplier or several suppliers who will provide us with the right amount of compost for our mushroom farm. The compost must have right-on temperature and the supplier must have the infrastructure in place to ensure that the compost arriving at the mushroom farm is in proper condition and our yields will not be affected.
The casing soil (most often peat based) is easier to transport over long distances. Of course, it may lose some qualities during transport, but this is not crucial. The key is to know how much it will cost the customer taking into account the full delivery costs.
If the business analysis based on suppliers does not look encouraging, then having your own compost production must be considered. In many places, a mushroom farm (especially a large one) should be built together with a compost yard. In this case first of all availability of raw materials must be checked. Classic raw materials such a wheat straw, chicken or horse manure and gipsum commonly used for compost production cannot be available everywhere around the globe at reasonable prices. While chicken manure might be found almost all around the world for the wheat straw substitutes, for example rye or barley straw, bagas (shugar cane straw), rice straw, hay, fully or partially can be used
Another key component in the business model is labor cost. A mushroom farm requires a lot of people, especially for harvesting. The availability of labor, its stability and price greatly affect the profitability of a mushroom farm. It is best to choose a location close to a town that is able to provide workers. Labor costs are the second cost group on a mushroom farm after compost and casing.
The last crucial element is the location of the investment which will provide the required connections for the necessary utilities, such as electricity, water, sewage, gas, etc. Machinery cooling rooms and boiler rooms must be designed for available utilities.
This might seem quite difficult for a someone who is only considering mushroom growing as a potential business. That is why very important to choose right technology supplier who is not only able to produce and supply equipment but will also do it in corresponding with the local market and customer’s possibilities.
With all this information, Agro-Projects can help the client select a business model, create a proper design and build it.
The above issue is very wide. Only the most important areas for analysis are indicated above. If you have further questions, do not hesitate to contact us.
