This year began with a great deal of introspection about CTHM and the farm, enough so that we questioned whether or not we should continue at all! 2017 showed yields and income greater than the year before, but not as much as we’d hoped. Our friend Bob Nechal (a fellow member at Twin Cities Friends Meeting and financial guru) agreed to help me to reevaluate things, and we met a bunch of times (thank you Bob!). It was enlightening and humbling, and this is what came out of it:
- More packaged mushrooms. We need to sell more fresh mushrooms in a packaged grocery format, since the value of these is much greater than “bulk” mushrooms. I revamped our packaging, and we almost tripled our sales of these, peaking close to 300 little baskets per week! Especially popular were our “baby shiitake,” our smallest shiitake with the stems trimmed off. They were definitely more expensive, but I’m really proud of them, and they made good use of these mushrooms that have been difficult to sell otherwise!
- Increase direct sales. We make more money on direct sales (instead of going through distributors) so we worked to increase our direct sales to grocery stores and restaurants. We greatly increased direct sales with the expected boost in profit, but unfortunately this negatively impacted our wholesale sales, which were lower than expected. There are some places that will only buy through a distributor and it’s better for distributors to know they can count on mushrooms from us, instead of being last on the list. We still have more work to do on the balance and mix of direct and distributor sales.
- Add other direct sales, especially farmers market and CSA.
- We boosted our mushroom CSA (selling mushrooms biweekly through veggie farms) from about 200 to 300, and we’re anticipating another 100 next year!
- We added the outdoor Sunday St. Paul Farmers Market, and we’ve added enough winter markets that we have one nearly every weekend through the winter. St. Paul has generally been on par with our Mill City Farmers Market sales.
- Diversify production. With more direct sales of fresh mushrooms through farmers markets and CSA, we should diversify our production as much as possible to increase variety and minimize the expense of purchasing mushrooms from other sources. We increased diversity of mushroom logs and started mushroom growing beds for four new varieties. Some of these are slow to incubate, but the Almond Agaricus has a quick incubation and yielded pretty well despite not being grown in a greenhouse. This year we applied for a grant through the Farm Service Agency that – if awarded – would pay for most or all of a greenhouse to grow this mushroom.
- We should continue building value-added products – preserved mushrooms or prepared foods that we make using mushrooms – since this is a way of using unsold mushrooms, especially during peak production.
- We did increase grocery sales of our mushroom butters and pates, adding a couple more grocery stores. I have interest from several more, but we still haven’t found a way to make packaging these affordable enough to really make money on them!
- We are about to launch on-line sales of dried mushrooms through Etsy.com. I hope this will grow into on-line sales of powdered dried mushrooms and mushroom butters/pates some day.
- Finally, we have just added a new product which we’re carrying only at farmers markets: dried powdered shiitake, and a dried powdered smoked shiitake. I expect to add a couple of powdered medicinal mushrooms soon too.
- One of the greatest challenges we face is that most of our income comes from only four months in the summer! Year-round mushrooms are an obvious solution to this, but expensive in our climate. We won a grant to help us build an indoor grow room, which we are currently setting up. It will serve primarily winter farmers markets and winter CSA, which is on the horizon too! I’m excited about the possibilities here for indoor “bag” cultivation, or even logs, but we’re taking this gradually, since it could get quite expensive to build or operate.
- Living situation. You probably know that while I live at the farm, Aimee continues to live in Minneapolis at our home there. Not only is this not our first choice personally, it is expensive! We are paying for two houses, property taxes, and utilities. Aimee has been seeking a job near the farm (or a remote job) so she can move to the farm and then we’ll rent out our Minneapolis house. The right job hasn’t come along yet, but we hope it will soon!
- Branding. As we add more packaging and reach out to a broader customer base, we should re-brand our farm – for something easier to remember and more appealing. We have transitioned nearly all our products to the new brand “Northwood Mushrooms.” We’ve gotten a lot of positive feedback, though I still have to answer to “CTHM,” since that is still the name of our farm!
- Harvest our own logs. We should minimize expenses and improve the quality of our mushroom logs by cutting more of our own. I have lined up a few logging sites (no clear cutting of course!), as well as our own farm, probably enough for the 4,200 logs I’d like to inoculate this winter. We just started cutting last week!
- Minimize payroll expenses. There are two big ways to minimize payroll expenses right now. One is to purchase a new inoculator tool (a semi-automatic tool) which will drastically cut down the amount of time for inoculations each spring. The other is to expand our shade structure so that all the parts of our production are close together and less time consuming to travel between. Currently, we ferry 4,000 or so logs to the other side of the farm and then back again every year. With a larger shade structure we can fit these logs with the other logs, meaning a much shorter and easier trip after inoculating and then we’d just have to stack them up at the end of the year instead of carrying them across the farm. That is the dream!
Unfortunately, we just don’t have the capital now for the inoculator tool or much of the shade structure. We did put in footings for the shade structure expansion last month. The combined cost for both these projects? About $20k, with payback in about 3 years!
- Food safety. Another project we’ve been working on is preparing for a food safety audit. As of late last year these became mandatory in cases like ours, and I think we’re nearly prepared for an audit, which could happen as soon as early next summer. We’re required to meet standards of cleanliness sufficient that customers can safely eat them raw, and to prove it! Part of this preparation is our mushroom tracking – through barcodes and lot numbers that help us follow different stages from harvest, sorting, boxing, and invoicing; thank you Aimee for spear-heading that!
- Transportation. We need to maintain the high quality of our mushrooms since that’s what it’s really about. We’ve been using a van without refrigeration, so in the middle of the summer I had to temporarily park dozens of cases of mushrooms into our Minneapolis walk-in cooler to keep them cool enough! After chasing several far-flung leads I recently found an affordable refrigerated van. Next year we can have an uninterrupted chain of refrigeration from harvest to delivery.
This time of year I’m always exhausted from a frenetic growing season, and this year Aimee has been alongside of me for some of the most grueling parts of it. We are a bit burned out, but also excited about the strides we’ve made, and I’m excited about our next steps. Thanks to all of you who have helped us get this far and continue to support us! We couldn’t have gotten here without you!
Jeremy (and Aimee) McAdams