Detailed Mushroom Profit Calculation (2023) - 4 Examples

Mushrooms are becoming one of the most sought-after food ingredients today. Products made of mushrooms are also on the rise, such as mushroom jerky and mushroom chips, which give entrepreneurs more reason to venture into the mushroom business. To give proof of how profitable mushroom farming is, we’ll give you examples of mushroom profit calculation in different scenarios.

In the US, a 500-square-foot mushroom farm can earn $67,200 annually. In the UK, a 20-square-meter mushroom farm can generate £525–£1,680 ($750–$2,250) weekly. In India, the net profit for button mushroom farming is around $2,628, and a 60’ x 30’ mushroom shed has calculated earnings of $1,337.

Below, we’ll dive into a more detailed look at the initial costs of starting a mushroom farm to give you an idea of how much you will need to prepare as well as how much you can gain from this investment.

Calculating Profits from Mushroom Farming

The mushroom business is a very profitable business idea that has been growing recently and has proven to be an excellent revenue-generating business. It is a highly dominant marketplace for countries such as the US, wherein the mushroom market generates almost $1 billion and is still growing, as well as countries like India and the UK.

Like any business, mushroom farming needs the right investment to be profitable. Some of the initial investments needed to start a mushroom farm include the following:

• Purchase cost for land
• Cost for building construction to house the mushrooms
• Cost for installation of drainage, water supply, and light fixtures
• Purchase cost for machine and equipment
• Cost of supplies such as spawn and substrate

The initial costs of starting a mushroom farm depend on whether you start small or big. Its profitability also depends also on the size of the farm you want to maintain, your location, what type of mushroom you planned to cultivate, and many other factors.

Below are a few sample calculations that show how much you can gain from mushroom farming.

Profit of oyster mushroom farming on a 500 square-feet space

The start-up costs for a small mushroom farm range from around $3,000 to $7,000. This range assumes that you already have a space to grow your mushrooms, such as an open room or a basement and won’t need to rent out. Renting out space will add up as another initial cost. The price range of some start-up costs is the following:

START-UP COSTS	COST RANGE
Setting up a business name and corporation	$150 - $200
Business licenses, certificates, and permits	$100 - $300
Insurance	$100 - $300
Business cards, brochures, marketing materials	$200 - $300
Website setup	$1,000 - $3,000
Climate Control equipment and other tools	$1,000 - $2,000
Substrate and other cultivation materials	$200 - $300
Mushroom spores or spawn	$300 - $500
TOTAL	$3,050 - $6,900

These start-up costs, including labor, let’s say, add up to 20% of the total income. Your profit margin should therefore be 80%.

Oyster mushrooms are the most sold mushrooms. They are easiest to grow and fastest to produce. They usually sell for around $7 per pound in the market.

A 500-square-foot space can produce 12,000 pounds of oyster mushrooms in a year. Therefore, by selling oyster mushrooms priced at $7 per pound, you can have an annual revenue of $84,000.

To get the total net income earned, subtract the percentage of startup and labor costs from the annual revenue. Your calculation should be like this:

ITEM	COST
Annual revenue (12,000 lbs. x $7/lb.)	$84,000
Percentage of start-up costs and labor expenses (84,000 x 20%)	$16,800
Total net income	$67,200

Since these numbers are only for a 500-square-foot farm, you can expect your revenue to double as you increase the land size to 1,000 square feet.

Profits of a 20 square-meter mushroom farm in the UK

In the United Kingdom, mushroom farming has been on the rise with over 280 commercial mushroom farms all around England, Wales, and Scotland. Market sales of mushrooms in the UK approximately reaches £200 million ($248 million).

In Northern Ireland alone, there are already around 300 farms that are either operating as small-scale to full-scale farms. Only a small portion of these numbers are large commercial farms. Small to medium-sized farms are more prominent in this area, with the smallest mushroom farms having annual revenue of up to £100,000 ($124,368).

The revenue for small-scale mushroom farms in the UK is considerably big, given that the initial investment in starting small mushroom farms in the UK is only around £1,500 to £2,000 ($1,866 to $2,487).

A small oyster mushroom farm in the UK, measuring 20 sqm., can produce 70 kgs of mushrooms or 150 lbs. per week. Oyster mushrooms in the UK are usually priced between $5 to $15 per pound or £7.50 to £24 per kilo.

If these numbers are maintained, annual revenue of more than $100,000 is not impossible. Calculating profits from a weekly harvest on a 20 sqm. mushroom farm will be as follows:

ITEM	CALCULATION
Weekly yield from a 20 sqm oyster mushroom farm	70 kgs. (150 lbs.)
Price range of oyster mushrooms in the market	£7.50 to £24 per kilo ($5 to $15 per pound)
Weekly revenue	£525 - £1,680 ($750 - $2,250)
Annual revenue (52 weeks in a year)	£27,300 - £87,360 ($39,000 – $117,000)

Let’s say your start-up costs for a 20 square meter mushroom farm is around £2,000, you will still get £85,360 or around $106,000 as your annual net income.

Profits of button mushroom farming in India

White button mushrooms dominate the mushroom world with their profitability and popularity. They are cultivated and consumed worldwide, contributing to 31% of the world’s mushroom production. In India, white button mushrooms constitute 81 percent of the total mushroom production.

Initially, white button mushrooms are only cultivated in India during the winter season as it prefers lower temperatures to fruit. But with improved technology, they can now be produced all throughout the year in small, medium, or large farms, earning around 10 lakhs or $18, 000 per harvest.

The calculation of the profit of button mushroom farming on a 250-square-foot farm is as follows:

ITEM	CALCULATION
Yield from a 250 sq ft button mushroom farm	2,500 kgs.
Cost of button mushroom per kilo	$1.83 per kilo (150 Indian rupees per kilo)
Gross revenue per harvest	$4, 583 (375,000 Indian rupees)
Total Recurring Cost or Expenses	$1,955 (160,000 Indian rupees)
Net Profit per Harvest	$2,628 (215,000 Indian rupees)

Since button mushrooms can be harvested every 2 weeks for 5 months continuously, your net profit can quickly escalate to $26,280 in 5 months. Take note that this is only for 250 square feet farm. The increasing land size will surely increase your profits from button mushroom farming too.

Profits of mushroom farming on a 60’ x 30’ shed

The cost of seasonal cultivation of mushrooms in India varies depending on the size of the shed. The cost and profit analysis of mushroom farming on a 60’ x 30’ shed is as follows:

ITEM	COST
Total cost for building shed (fixed assets)	$633 (51,800 Indian rupees)
Total cost of raw materials such as compost	$953 (78,020 Indian rupees)
Cost for casing soil	$61 (5,000 Indian rupees)
Cost of Spawn	$85 (7,000 Indian rupees)
Labor cost (6 labor persons for 15 days)	$367 (30,000 Indian rupees)
Transport and delivery costs	$122 (10,000 Indian rupees)
Total investment in mushroom farming	$2,222 (181,820 Indian rupees)
12% and 5% interest and depreciation charge for fixed assets	$108 (8,806 Indian rupees)
Total investment cost	$2,222 (181,820 Indian rupees) + $108 (8,806 Indian rupees) = $2,329 (190,626 Indian rupees)

The total investment cost of a 60’ x 30’ mushroom shed is summed up to $2,329 (190,626 Indian rupees).

ITEM	CALCULATION
Yield from a 60’ x 30’ mushroom shed	3, 000 kgs.
Mushroom market price	$1.22 per kilo (100 Indian rupees per kilo)
Gross revenue from a 60’ x 30’ mushroom shed	$3,666 (300,000 Indian rupees)
Total investment cost	$2,329 (190,626 Indian rupees)
Net Profit from a 60’ x 30’ mushroom shed	$1,337 (109,374 Indian rupees)

The total earnings from a 60’ x 30’ mushroom shed are calculated to be $1,337. This shows how profitable mushroom farming is even at small-scale operations.