Is Mushroom Farming a Profitable Business? (4 Calculations)

Mushroom farming is one of the most rapidly growing types of agricultural farming in today’s time. It is predicted to have a 10% growth rate over the next 5 years. If you plan to venture into mushroom farming, here are a few sample calculations on how profitable this business is.

Cultivating mushrooms can be very lucrative and profitable. Growing 150 pounds of oyster mushrooms can get you $714 a week. Cultivating oyster mushrooms on 1 acre can earn you a net profit of $5,259 in a year, while growing button mushrooms on a 250-square-foot space can help you earn more than $2,000.

The above numbers prove that mushroom cultivation is highly profitable, even for smallholdings. Below, we’ll give you a more detailed calculation proving just how profitable the mushroom farming business is.

Also read:

Minimum Space Required for Mushroom Farming (Tiny)

Mushroom Cultivation Is a Profitable Business

Aside from the profit, there are many good reasons why you should consider starting a mushroom farm these days:

1. Mushrooms can be grown year-round, unlike crops that have seasons.
2. Mushrooms are not directly impacted by weather since they can be grown indoors in a controlled environment.
3. Since mushrooms can grow on substrates from industrial waste, they are a good way to recycle compost waste.
4. Mushrooms are a good and healthy alternative to meat; they can be a good source of protein as well.
5. Starting a mushroom farm only entails basic requirements.
6. Mushroom farming has very low start-up costs and investments.
7. Mushroom farming is profitable even on small pieces of land. Below are sample calculations if given different scenarios.

Mushroom cultivation is the process of growing mushrooms using plant, animal, and industrial waste. It is also commonly known as “fungi culture,” since mushrooms are a type of fungi. Growing mushrooms on either a large or small piece of land is called mushroom farming.

Growing 150 pounds of oyster mushrooms on straw gives a profit of $714

When growing 150 lbs of oyster mushrooms, the total cost incurred is seen in the table below:

ITEM	COST
Total cost for substrate	$81
Total cost for spawn	$180
Miscellaneous cost	$15
Total material costs	$276

If the mushroom is sold at $11/lb. in a CSA market, 150 lbs. of oyster mushrooms will then give an income of $1,650 per week. If the labor expense, business expense, taxes, and delivery expenses are rounded off to 40% of the income, it will need $660 to cover all mentioned expenses.

To get the total income earned from growing 150 lbs. of oyster mushrooms, add the total material costs and the labor expenses, and subtract them from the total income. Your calculation should be like this:

Income - material expenses - labor = margin

$1650 - $276 - $660 = $714 (Total revenue)

If you divide $714 by 150 lbs., your profit margin will therefore be $4.76/pound of mushrooms.

Net profit from 1-acre mushroom cultivation can reach up to $5,000

When setting up a 1-acre mushroom farm, there are two types of costs incurred: permanent costs and recurring costs.

Permanent costs refer to the equipment and materials used to build and run the mushroom farm while recurring costs refer to the materials and supplies repeatedly used to produce the mushrooms such as spawn and substrate. The total cost for both can be seen in the table below:

ITEM	COST
Permanent costs to set up mushroom production unit (Includes room construction, cost of racks, drums, gunny bags, grasscutter, hygrometer, sand, boiling vessel)	$490
Recurring cost in mushroom production (includes the cost of hay, polythene bags, spawn, chemicals, labor, electricity, irrigation, and other miscellaneous costs) x 9 crops per year (average harvest time/crop time per year)	$91 x 9 crops per year = $821
Total production cost in a year	$ 1,311

A kilogram of oyster mushrooms sells for $1.46 each. The average yield of an acre is 500 kgs. per harvest. Since there are 9 crops in a year, you can have 4,500 kilograms of oyster mushrooms in a year.

4, 500 kilograms x $1.46 = $6,570 (gross returns)

To get the net profit of cultivating a 1-acre oyster mushroom:

$6,570 (gross ) - $ 1,311 (total cost) = $5,259 (net income)

The total annual net income from cultivating oyster mushrooms on 1 acre is $5,259.

Net profit for oyster mushroom farming can escalate to more than $300 per month

Another sample calculation to see how profitable mushroom farming is can be seen below.

Item	Cost/Qty
Total cost incurred for 2 months (Inclusive of rent for the mushroom house, cost of purchasing 50 kg. spawn, purchase cost for 500 polythene bags, cost for rake making, chemical costs, transportation and packing expenses, and electricity bill) **	$ 156
Total monthly cost	$78
Total mushrooms produced from 50 kg spawn	500 kgs.
Average selling price	$1.52 per kilogram
Net revenue for 2-month period	$760
Monthly revenue earned	$380
Monthly net profit earned	$302

The total monthly expense for oyster mushroom farming is $78. If the oyster mushrooms sell for $1.52 kg. and you have a 50 kg. spawn that can produce 500 kgs. of mushrooms within a 2-month growing period, your revenue is $760 divided by 2, which amounts to $380 per month.

To get the monthly net profit earned:

$380 (monthly revenue) - $78 (total monthly cost) = $302

A 250-square feet button mushroom farm can help you earn more than $2,000

Besides oyster mushrooms, another popular and profitable mushroom species being cultivated in India are button mushrooms. Button mushrooms are prolific growers. On one square foot, you can expect to yield a total of 10-15 kgs. of mushrooms.

If you have 250 square feet of space, here’s a rundown of the costs and possible profits from cultivating button mushrooms.

ITEM	COST
Total recurring cost	$1, 947
Total yield from 250 square feet	2,500 kgs.
Average selling price	$1.70 per kilogram
Gross revenue for 2,500 kgs of button mushrooms	$4, 259
NET PROFIT	$2, 312

The total recurring cost for cultivating button mushrooms is $1,947. If the button mushrooms sell for $1.70 kg. and you have 2,500 kgs. yield from your 250 square feet of land, your gross revenue is $4, 259.

To get the net profit earned:

$4,259 (gross revenue) - $1,947 (total recurring cost) = $2,312