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.
Yeah the right way to get into it would be through Dutch technology and so you have little bit less reliance on labor but you cannot completely eliminate it. We might be giving up our mushroom independence to Canada slowly but surely!
I worked on a mushroom farm about 20 years ago in Canada. It sucked, mostly because you were paid piecework, and it took a while to get your stride to make any money. The hours also weren’t steady, they only needed to pick the beds they needed to pick, and while the facility had a dozen or more different grow rooms, only a few were fruiting at any given time. I think I was one of two white pickers, everyone else were recent immigrants from mainland China. It seemed like the packing room was staffed with locals and the pickers were largely newcomers. Packing was also paid hourly, which would have been nice
A...or "the"...primary reason most of the vertical farms in America are failing (or already closed) is PE investors rushed in, financed and built facilities, then found out/understood it was a 20 year window before their projected profit accrued...they bailed out. Who's financing the mushroom industry.
So...I did a quick check on the mushroom industry, how it's financed, the players, and the general picture that comes out is it's scattered amongst a number of players with government backing via the ag credit system, which is itself mildly (majorly?) convoluted, all resulting in something suggesting that those in the business see better returns and less hassle on their investment than mushrooms. Sound familiar?
The challenge with vertical farming has been that vertical farming companies didn't know which of the customer problems they were working on solving. It was a smattering of "do good" messages, which didn't work economically.
There were/are lots of issues with vertical farms, with squishy business plans another part of the problem. Squishy plans, venture capital demanding quick returns and pulling the plug when they don’t get them…it wasn’t a good start.
A couple of items that don't (on the surface) appear to equate. First " put a floor on farm wages and raised average farm wages" - - explain further. Also - unless US mushroom producers are financially and economically obtuse, if investing in technology reduces Average Cost and labor availability risk . . .why don't they? My gut venture is that maybe it does not on average. Response?
Yes, it is a bit convoluted. If you can hire undocumented workers (which is challenging in itself) you pay much less on a per unit of work basis. If you have to go through H2A workers, the minimum hourly wage with H2A is much higher than what you would have to pay an undocumented worker. This was put in place to protect domestic workers hourly wages. So it establishes a floor. For them to use automation, they need to first upgrade their existing infrastructure to newer production. Automation does not completely eliminate labor requirements as it automate certain tasks. Automation (which is still in its early days) requires some additional different types of skillsets and investments. Netherlands has led in latest growing technology, whereas Canada is somewhere between the US and Canada. The US lags the most in terms of technology adoption.
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.
Yeah the right way to get into it would be through Dutch technology and so you have little bit less reliance on labor but you cannot completely eliminate it. We might be giving up our mushroom independence to Canada slowly but surely!
Great article!
Thank you Cathie!
I worked on a mushroom farm about 20 years ago in Canada. It sucked, mostly because you were paid piecework, and it took a while to get your stride to make any money. The hours also weren’t steady, they only needed to pick the beds they needed to pick, and while the facility had a dozen or more different grow rooms, only a few were fruiting at any given time. I think I was one of two white pickers, everyone else were recent immigrants from mainland China. It seemed like the packing room was staffed with locals and the pickers were largely newcomers. Packing was also paid hourly, which would have been nice
A...or "the"...primary reason most of the vertical farms in America are failing (or already closed) is PE investors rushed in, financed and built facilities, then found out/understood it was a 20 year window before their projected profit accrued...they bailed out. Who's financing the mushroom industry.
So...I did a quick check on the mushroom industry, how it's financed, the players, and the general picture that comes out is it's scattered amongst a number of players with government backing via the ag credit system, which is itself mildly (majorly?) convoluted, all resulting in something suggesting that those in the business see better returns and less hassle on their investment than mushrooms. Sound familiar?
The challenge with vertical farming has been that vertical farming companies didn't know which of the customer problems they were working on solving. It was a smattering of "do good" messages, which didn't work economically.
There were/are lots of issues with vertical farms, with squishy business plans another part of the problem. Squishy plans, venture capital demanding quick returns and pulling the plug when they don’t get them…it wasn’t a good start.
I wrote about the follies of vertical farms last year, twice. https://sftw.substack.com/p/is-plenty-and-vertical-farming-the (about Plenty and what the industry got wrong) and then again https://sftw.substack.com/p/lets-be-honest-about-vertical-farming
A couple of items that don't (on the surface) appear to equate. First " put a floor on farm wages and raised average farm wages" - - explain further. Also - unless US mushroom producers are financially and economically obtuse, if investing in technology reduces Average Cost and labor availability risk . . .why don't they? My gut venture is that maybe it does not on average. Response?
Yes, it is a bit convoluted. If you can hire undocumented workers (which is challenging in itself) you pay much less on a per unit of work basis. If you have to go through H2A workers, the minimum hourly wage with H2A is much higher than what you would have to pay an undocumented worker. This was put in place to protect domestic workers hourly wages. So it establishes a floor. For them to use automation, they need to first upgrade their existing infrastructure to newer production. Automation does not completely eliminate labor requirements as it automate certain tasks. Automation (which is still in its early days) requires some additional different types of skillsets and investments. Netherlands has led in latest growing technology, whereas Canada is somewhere between the US and Canada. The US lags the most in terms of technology adoption.