Mushroom demand builds as business costs rise - The Packer

Mushroom demand builds as business costs rise

01/11/2013 10:39:00 AM
Tom Burfield

Demand for fresh mushrooms continues to build, but as input costs continue to rise, grower-shippers often are hard pressed to turn a profit.

Costs of raw materials, transportation and health care “continue to put tremendous pressures on the business,” said Joe Caldwell, vice president of Monterey Mushrooms Inc., Watsonville, Calif.

Basciani Mushroom Farms, Avondale, Pa., is investing heavily to implement the Produce Traceability Initiative, but the associated costs along with rising costs of other inputs is “putting a strain on profitability,” said Fred Recchiuti, general manager.

“More regulations are adding more costs, and we haven’t seen a price increase,” he said. “As interest rates go up, we can expect some players in the market with high debt load to possibly go out of business.”

Some companies already have been absorbed by others, he said.

“Business has been very good” for Dole Mushrooms, Kennett Square, Pa., said director Gary Schroeder.

Thanksgiving sales were excellent, and the trend continued through Christmas.

“The forecast for the immediate future and for next year is very good,” he said Dec. 26. “It’s exciting to see the growth in the category.”

That growth has expanded into what traditionally have been nonpeak periods, said Bart Minor, president of the San Jose, Calif.-based Mushroom Council.

“We just came through a summer like none I’ve ever seen before,” Minor said. “June, July, August was incredible.”

July sales were up 8% compared with the previous year, and August sales were up 12%.

“We’re seeing monthly shipment numbers in June, July and August that are equivalent to what we used to call the peak months,” Minor said.

Monthly volume during the winter typically ranges from 66 million pounds to 70 million pounds, he said. Volume in August was 69 million pounds.

He is hopeful that the uptick will continue as more consumers and foodservice operators discover the “swapability” concept, where cooks replace a portion of the meat in items like hamburgers or lasagna with mushrooms.

Domestic mushroom producers might benefit as a result of a decision last fall by the Chinese General Administration of Quality Supervision, Inspection and Quarantine to halt exports of processed mushrooms from certain Chinese manufacturers to the U.S., said Laura Phelps, president of the Washington, D.C.-based American Mushroom Institute.

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