A mushroom grower's cost starts with the block: sawdust and bran, spawn, a filter bag, the power to sterilize and about ten minutes of work, roughly $8 a block, with one in ten lost to contamination. A good block gives about a pound and a half of oyster mushrooms. From there, a market box keeps a wide margin and a restaurant pound a thinner one, and a grow-at-home kit sells the block itself. Margin = (price − cost) ÷ price. In the example below, a half-pound market box of oyster mushrooms costs $3.93 to grow and sell and goes for $9.00, a 56.3% margin. A month of four ways of selling brings $9,660 of sales and about $4,720 of gross profit.
The short version
- Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
- Count your time as a cost, even if you don't pay yourself yet.
- A half-pound oyster box at a market: $3.93, $9.00, 56.3%.
- Cost the block, and count the one in ten that's lost.
- Restaurants keep less a pound but take it every week.
- Lion's mane yields less a block and sells for more.
- TaroStack costs each block and box from what each batch used. More below.
A box, costed
Hilltop Greens, the made-up farm in Asheville, North Carolina, I use in these examples, grows oyster and lion's mane mushrooms on sawdust blocks; a good block costs $8.92 with losses and gives a pound and a half of oysters:
| A half-pound box of oyster mushrooms at a market | Cost |
|---|---|
| Mushrooms: the block's share, growing work included | $2.98 |
| Box and label | $0.35 |
| Packing | $0.33 |
| Card fees, 3% of $9.00 | $0.27 |
| Cost | $3.93 |
The farm's year is in mushroom farm business plan, and the boxes in how to package mushrooms for sale.
Margins by channel
| Product | Sold where | Price | Cost | Gross profit | Margin |
|---|---|---|---|---|---|
| Oyster mushrooms, half-pound box | Farmers markets | $9.00 | $3.93 | $5.07 | 56.3% |
| Oyster mushrooms, per lb | Restaurants, delivered | $11.00 | $6.55 | $4.45 | 40.5% |
| Lion's mane, half-pound box | Farmers markets | $12.00 | $5.50 | $6.50 | 54.2% |
| Grow-at-home kit | Markets and online | $28.00 | $11.96 | $16.04 | 57.3% |
The restaurant pound keeps 40.5%, with a delivery share; lion's mane keeps 54.2%, and the grow kit 57.3%.
A month's numbers
A month at full speed for Hilltop Greens:
| Product | Units | Sales | Gross profit |
|---|---|---|---|
| Oyster mushrooms, half-pound box, farmers markets | 300 | $2,700 | $1,521 |
| Oyster mushrooms, per lb, restaurants | 400 | $4,400 | $1,780 |
| Lion's mane, half-pound box, farmers markets | 120 | $1,440 | $780 |
| Grow-at-home kit, markets and online | 40 | $1,120 | $642 |
| Month | $9,660 | $4,723 |
Restaurants bring the most sales and a weekly order the grow room can plan around; the market boxes bring the margin. A month with contamination at one block in five instead of one in ten raises every pound's cost by about an eighth. The farm's microgreens are in microgreens profit margin.
Get the calculator
Download the mushroom margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator holds one yield a block and one loss rate. A humid week that loses a rack of blocks, or a flush that comes in light, changes every pound, and only the batch records show which.
How TaroStack does it
TaroStack costs each pound from what each batch used, so margins sit on real cost.
True cost from the batch. Each batch takes substrate, spawn and bags at the price of the deliveries they came from, so a price rise shows in the next batch's cost.
Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.
Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| What a pound cost | One price from last season | Cost from the batch's deliveries |
| The hours behind a batch | Remembered | Labor minutes on the batch |
| An ingredient creeping up | Noticed late | A price-creep report |
| Margins by product | Re-worked by hand | Margins on real cost |
Recipes, batches, costing and margin reports are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.