How Much Money Do You Need to Start a Mushroom Farm?

Depending on whether you want to start a small hobby farm to supplement your income and dedicate only a few hours a week, or you want a large scale operation that will generate a huge revenue stream, but will require full-time labor from more than one person, startup costs for a new mushroom farm will range from less than $1,000 to $100,000.

The rest of this article will explain the pros and cons of both large scale and hobby mushroom farms, unexpected costs, where corners can be cut, which varieties of mushrooms will earn you the most, and how much you can expect to invest in equipment, spores, space, and labor.

What Kind of Mushroom Farm Do you Want?

Unless you have extensive experience growing mushrooms, it is recommended that you start with a small or mid-range farm before investing tens or hundreds of thousands of dollars in a large-scale mushroom farm. Here are some pros and cons for each type of farm:

Hobby Farm

Can start with a thousand dollars or lessUsually not enough income to be your only revenue source
Easier to find retail buyers for smaller amountsHave to find steady customers, such as restaurants or farmer’s markets, to buy your produce
A garage, outdoor shed, shaded outdoor area or spare room is all the space necessaryVarieties of mushrooms you can grow are limited to the environment you provide
Can save money using cheap or free substrate materials like used coffee grounds or sawdustNeed to find clean sources of free substrate (no chemical additives that can harm spawn) to save money

Mid Range Mushroom Farm

Can make $60,000 per year or moreNeed a larger space than a hobby farm
Don’t have to hire workers and pay labor costsSignificantly more work than a hobby farm
It may be advantageous to invest in a culture labProper sterilization is more important because excessive financial loss from contamination is possible
Can grow multiple types of mushrooms for a wider customer baseMay have a hard time finding enough retail customers and need to expand into wholesale
Separate rooms or spaces for different mushroom varieties and stagesLarger farm space and $10,000 or more is needed to start farm

Large Scale/Industrial Mushroom Farm

Up to $100,000 or more in annual revenueMostly wholesale because the volume is too high to find enough retail customers
Investing in a culture lab will save money on spawnProper sanitation practices are critical because contamination can mean financial ruin
Is a great long-term investmentLabor costs increase because it’s too much work for one person
 Need to buy or rent a large space to accommodate a bigger farm

Which are the Most Profitable Mushroom Varieties?

Oyster mushrooms are a popular variety to start your farm with because they command a high retail price, grow quickly, are a high-yield crop, and are an efficient strain to use with your substrate. Oyster mushrooms can earn a hobby farm $12-16,000 per year selling at $6-12 per pound.

This variety is great for beginners because it thrives in inexpensive substrates like straw, sawdust, and coffee grounds. The spawn to get started will cost you about $25 for a 5-6 lb bag of spawn in sawdust and you will need a 10-20% ratio of spawn to substrate.

Purchasing Spawn vs Growing Your Own Culture

Costs for spawn add up quickly, so it’s a common belief that you can save money by culturing spores yourself. Here are some of the pros and cons to demonstrate how debatable investing in a culture lab is:


  • Cheaper in the long term because you never have to buy spawn 
  • Gain a greater understanding of your mushrooms
  • The spores cultured on your farm will be uniquely adapted to thrive in your setup


  • Most farmers agree it takes a lot of time to learn and perfect 
  • Flow hood and separate space necessary for the lab will cost about $500 or more
  • Contamination is likely unless the lab is meticulously sterilized
  • The quality of spawn may not be as good as what you can purchase
  • Hours of extra labor every week to keep a ready supply of spawn.

If you are trying to start a hobby farm and haven’t grown mushrooms on a large scale before, it is recommended to purchase spawn. Once you get the hang of other aspects of mushroom farming and are sure you want to invest in a larger operation, spending the money to establish a culture lab makes sense.

How Can I Save Money?

If you have access to a supply of clean straw, sawdust, logs, or used coffee grounds, you can save money on the substrate, which can cost up to $10 per pound if you buy it pre-sterilized and packaged for mushroom growing. 

How Much Will Equipment and Supplies Cost?

If you have a space already set aside for your hobby farm, a free supply of substrate (such as clean sawdust or spent coffee grounds,) and you are going to supply the labor, expect to invest:

  • Fogger/Humidifier $40-$100
  • Humidity Regulator $30-60
  • Rubbing alcohol and latex gloves $15
  • Plastic tubs or 5-gallon buckets or bags $100-350
  • Hydroponic grow tent $100-300
  • Shelving or wall hooks $50-500
  • Spawn $75-300 (depending on type and amount needed)

Where Can I Put My Farm?

Renting a space for a mushroom farm can cost thousands of dollars per month, depending on location, and is only recommended for large-scale farms because revenue is unlikely to justify the cost. Set up your hydroponic tent in a backyard shed, a spare room, a garage, or even a large closet until your operation outgrows the space.

What About Labor Costs?

If you want to invest in a large-scale operation, expect to pay at least minimum wage for your state for each employee. Since labor is so costly, most people start with a small mushroom farm that they can manage on their own.