The case of missing American mushrooms
Why the U.S. is missing a million pounds of mushrooms a week
Programming Note: I will be hosting a free online session on AI Benchmarking in Agriculture on Wednesday, April 29, along with a few other folks. This is the largest ever AI in agriculture online event I am aware of with 262 registrations.
I am a grocery-list-captured male shopper. If something is not on the grocery list, it most likely does not go into the shopping cart. There is one item, though, for which I make an exception. Whether it is on the list or not, I always get a pack of mushrooms because I love them. I love mushrooms in my soup, in my burgers, on my toast, or just sauteed with garlic1.
Given the short shelf life of mushrooms and their fragility, I had always assumed that most of the mushrooms I buy must be coming from some nearby place in California.
I recently learned that Canada’s mushroom production has been growing over the last 20 years, and much of it is exported to the United States, while production in the United States has declined. Differences in policy toward migrant workers between the United States and Canada, and differences in investments in new technology may explain the divergence in mushroom production between the two countries.
But before we get into the details, it is important to understand where and how mushrooms are grown, harvested, and shipped.
US mushroom production
You would be surprised to learn that almost 69% of the US mushroom production occurs in the borough of Kennett Square, Pennsylvania. It is a small town of about 6000 people, but mushroom-growing facilities around town produce almost 451 million pounds of mushrooms annually (2024). 451 million pounds of mushrooms would occupy about 45 American football fields or 35 soccer fields. The dollar value of mushroom production in the US is roughly $ 1 billion per year.
China is the undisputed leader in mushroom production. China accounts for 93% of the world’s global mushroom production.
The history of mushroom farming in Kennett Square dates back to 1885, when a grower obtained mushroom spores from Europe and began growing mushrooms. This concentration of mushroom farming in Kennett Square, Pennsylvania, is due to historical immigration patterns, primarily of Italians in the 1950s or 1960s, easy availability of horse manure for the mushroom substrate, an easy access to the Philadelphia and New York markets.
Growers use an old system called “Pennsylvania doubles” to grow mushrooms. Specialized, two-story cinderblock buildings with wooden shelves and intensive manual picking characterize the system. The system is designed with the assumption of cheap labor.
The growing houses provide a strictly controlled environment for growing white button, cremini, and portobello mushrooms on stacked beds, producing approximately 400 to 500 million pounds of mushrooms annually. Growers can manage the temperature, humidity, and airflow to create optimal conditions for mushroom mycelium to grow and fruit.
The houses are equipped with vertical wooden or aluminum shelves, which maximize growing space. The shelves house pasteurized compost (often made from hay, straw, poultry litter, and cocoa shells) used to grow mushrooms year-round.
As you can see in the video below, the conditions inside the mushroom-growing facilities are hot, humid, and stinky! The process of harvesting mushrooms is fairly manual, unless the grower has invested in a robotic harvesting system from companies like 4AG Robotics. Most US production facilities lack an automation design.
Mushroom shelf life dictates the supply chain
Mushrooms are a type of fungus. If you have the right spawn available and can control the environment economically, you can grow mushrooms year-round. Mushrooms have a short shelf life. Mushrooms are 92% water. A mushroom starts losing water as soon as it is harvested. Anyone who has seen a fresh mushroom that has begun to dehydrate knows how unappetizing it can look.
The dominant mushroom variety grown in both the U.S. and Canada is called the Agaricus. Your most common mushroom variety in your grocery store, the white and brown button mushrooms, cremini, baby bellas, and portobello, all belong to the Agaricus family. The Agaricus family accounts for more than 90% of mushroom production and sales in North America. Shiitake (my favorite or oyster mushrooms) do not belong to the Agaricus family.
Canada and the United States grow mushrooms year-round in climate-controlled, indoor warehouses. Readers of this newsletter are aware of my massive skepticism about the economic viability of vertical farming, but mushrooms provide a counterexample in which vertical farming actually works. The main difference is that mushrooms are fungi and do not need sunlight for photosynthesis.
Due to supply chain constraints and the limited shelf life of mushrooms post-harvest, most fresh mushroom consumption occurs within a few days of production. For example, mushroom production from Pennsylvania mostly stays within a few days of transit.
Most mushroom production facilities in Canada are located in British Columbia and Ontario, close to the US border, and deliver their products to the northern United States within 36-48 hours of harvest. Production geography relative to population is the structural constraint that neither shelf-life extension nor improved cold chains can fully overcome.
The shelf life of mushrooms is the hard constraint. Fresh button mushrooms have a 7-10 day usable shelf life under an optimal cold chain, beginning at harvest. Mushrooms are a high-respiration-rate product. They consume oxygen, produce CO2, and generate moisture. Every degree of temperature above the ideal range of 34-38 degrees F doubles the respiration rate and halves the effective shelf life. Continuity in temperature from the moment of harvest to when the customer picks it up is a critical supply chain variable.
Mushrooms are fragile and bruise under their own weight. Vibration and pressure can cause bruising in transit. Each bruise initiates a localized decay, which accelerates from the point. It limits the number of handoffs or transfer events, since each event is a risk. Mushrooms can lose quality if they dehydrate or become too heavy, and they require an ideal relative humidity of 90-95%.
The same MAP technology used for packaged salads is also used for mushrooms and can extend their shelf life, though it cannot do much for the product’s fragility or the minimum handling requirements.
So, why is US production dropping while production in Canada is rising, even though 99.6% of Canada’s exports go to the US? A big part of the answer to this question lies in how the United States and Canada provide support to migrant workers who come over to pick mushrooms.
Seasonal vs. Annual
Both countries grow mushrooms year-round in climate-controlled indoor warehouses. Mushrooms are not a seasonal crop. But the labor policies of the U.S. and Canada treat it very differently.
The primary flaw in the U.S. is a mismatch between the nature of mushroom farming and the design of the guest worker visa system.
The H-2A visa program, introduced by the Immigration Reform and Control Act of 1986, provides foreign workers with legal status for seasonal agricultural labor. Unlike most agricultural products, however, mushrooms can be grown and harvested year-round. Accordingly, the U.S. government provides no clear pathway to legal status for noncitizen workers in the mushroom industry.2
As mushroom farming is a year-round specialty crop, it doesn’t qualify for the H-2A temporary guest worker program. Without the H-2A labor option, growers concentrated in the Pennsylvania region are competing fiercely for local workers in a tight labor market.
The industry has used a mix of undocumented workers, immigrant workers with temporary protections, and labor contractors. The termination of TPS (Temporary Protected Status) for Venezuelan migrants, combined with broader immigration enforcement, will likely shrink the pool of available workers further.
Canada has taken a more flexible and stable approach. The Seasonal Agricultural Worker Program (SAWP) of Canada includes mushrooms. The national commodity list for SAWP workers includes mushrooms alongside fruits, vegetables, grains, dairy, and other sectors.
Foreign workers can be in Canada for up to two years at a time under the Temporary Foreign Worker Program (TFWP), and SAWP workers for up to eight months. They can return each season, creating a reliable, trained, recurring workforce. Many workers return to the same Canadian farm year after year.
Canada also offers a pathway forward, through the Agri-Food Immigration Pilot, where experienced workers in mushroom cultivation can qualify for permanent residency, either directly or through a Provincial Nominee Program.
H-2A is not a mid-century modern problem
The H-2A program3 was designed for seasonal crop agriculture in the mid-20th century. It did not account for year-round agriculture across multiple sectors; despite efforts by the US legislature, the seasonal restriction has not changed.
The consequences in the U.S. could be tangible if the U.S. allows year-round migrant workers under existing visa schemes.
The American mushroom industry is estimated to be missing more than a million pounds of production per week due to labor shortages, with some companies reporting 10–20% of their crop going unharvested. Some Pennsylvania farms have slowed operations by as much as half, with growers saying they cannot harvest all the mushrooms they’re growing and are struggling to pay the bills.
The impact of seasonal H2A workers is not limited to mushrooms only.
It creates a legal labor vacuum across all commodities that operate year-round. It includes year-round industries such as dairy, beef cattle and other livestock operations, hog and poultry production, mushrooms, nursery and greenhouse operations, some tree fruit operations, aquaculture, and forestry. These sectors are a significant portion of the US agriculture GDP and the food system.
According to the National Milk Producers’ Union,
Immigrant labor accounts for 51% of all dairy labor. Dairies that employ immigrant labor produce 79% of the US milk supply. If the US dairy industry lost its foreign-born workforce, it would nearly double retail milk prices and cost the total US economy more than $32 billion.
The H2A seasonal restriction makes this a structural and permanent risk.
For seasonal crops like fruits and vegetables, where H-2A technically does apply, the program is increasingly accessible but still deeply dysfunctional in practice. For fruit and vegetable production, labor accounts for 38.5% and 28.8% of input costs, respectively, as I highlighted in my blueberry and lettuce pieces a few weeks ago.
This cost gap is directly driving a structural shift in where specialty crop production happens. For fiscal year 2024, USDA’s Economic Research Service estimated a record $32 billion agricultural trade deficit, with the largest increases in imports driven by labor-intensive products such as fresh produce and horticultural goods.4
The biggest impact will be on year-round industries such as dairy, livestock and pork operations, nursery and greenhouse operations, and sugarcane and sugar beet operations. As I said before, the dairy sector faces a $32 billion tail risk amid ongoing operational stress from labor issues. The challenge is similar to that of the beef cattle and meatpacking industry, which is worth north of $100 billion and relies on an undocumented workforce with limited legal alternatives. The poultry and hog industry also poses a $ 50-$ 60 billion tail risk.
Mushrooms are a microcosm of larger issues
US mushroom production is declining, while Canadian production is rising. All of Canada’s mushroom exports come to the US due to higher quality and greater economic competitiveness than its US counterparts. At this point, we do have to admit that Canadian mushroom producers have some real structural cost advantages over US producers. Canadian producers have vertical integration, newer facilities, larger average farm size, proximity to large US markets, and access to SAWP labor.
Regulatory changes have been challenging to get through. US producers have been unwilling to invest in new technologies, such as steel trays for holding substrates and growing mushrooms, and in automation to alleviate high labor costs. Mushroom growers in the Netherlands have overcome the labor issue through investments in the latest growing equipment and robotic picking solutions. Canadian growers have similarly invested in newer technologies, including robotic picking solutions, and have the advantage of year-round labor.
The US mushroom industry is stuck in last-century methods and has been hesitant to invest in new technologies. Competition from Canada and pressure from grocery retailers are forcing some growers to upgrade their equipment.
Based on my conversation with an industry insider, US grocery retailers say they get very good mushrooms at reasonable prices in the northern US (for example, Minneapolis, Chicago, etc.) that come over the border from Canada. They are asking their US growers to do the same for the geographies closest to their operations, forcing some of the old US-based mushroom growers to update their setups and consider adopting robotic mushroom-harvesting solutions.
Without regulatory changes and some unwillingness among US producers to invest in new technology, the US risks the mushroom industry shrinking, maybe disappearing, and moving to Canada. The impact of H2A on mushrooms is clear and fairly easy to study and understand, given the industry’s smaller size.
The U.S. Commerce Department has initiated dumping and countervailing investigations, but it is more of a tell about what’s really happening on the ground. We have a shrinkage in crop acres across multiple commodities, such as berries moving from the US to Peru, asparagus moving out of California, and sweet beetroot moving out of California.
A common criticism of allowing year-round guest workers in agriculture is that it will depress wages for local workers and might slow the adoption of automation and robotics. The practical reality is that many American workers are not interested in seasonal farm work. If anything, the adverse effect wage rate (AEWR) requirements for the H-2A program (which have grown 185% in the past 10 years) have put a floor on farm wages and raised average farm wages.
The bigger challenge with automation has been the availability of harvesting technology and the unwillingness of mushroom growers to upgrade their technology to make it suitable for automation. Automation still requires labor for other tasks, which is a challenge due to the seasonal workforce requirements within U.S. law.
Mushrooms might be a case of a canary in a coal mine or a fungus in a growing house. US producers, the agricultural technology ecosystem, and policymakers need to pay attention if we Americans want mushroom independence.
One of my favorite ways to eat mushrooms is with Sauteed Shitake Mushrooms with Garlic on an Avocado toast.
American Immigration Law
Congress enacted FSMA in response to dramatic changes in the global food system and in our understanding of foodborne illness and its consequences, including the realization that prevenagricultural technology ecosystem, and policymakerstable foodborne illness is both a significant public health problem and agricultural technology ecosystem, and policymakers need to pay attention to thisa threat to the economic well-being of the food system. The law was passed in 2011.
Immigration uncertainties in 2025.
I want to thank Abby ShalekBriski, Sam Enright, Hiya Jain, Jeff Fong, Emma McAleavy, and Mike Riggs for their feedback on this piece. Any errors are mine and mine only.
Awesome as always! Some of our straw has gone to “Canadian mushroom farms” which makes me wonder… Why am I not growing the mushrooms and becoming more vertically integrated. I think it is your labor point that brings me back down to earth and my dreams of becoming the mushroom king.
Great article!