The U.S. Mushroom Industry Under the COVID-19 Pandemic

COVID-19 is infecting the world, and the United States is not immune. Due to the rapid movement of the global population, a new infectious disease can quickly develop into a pandemic. Geographically distant origins are not immune, and the sophistication of the economy and the amount of air travel are directly related to the extent of initial infection. The U.S., the world's largest economy, has the most air travel per capita, doubling Americans' susceptibility to infectious diseases like the coronavirus.

   Infection levels in the U.S. have been high, in part because of air travel volumes from countries with early infections. Of the confirmed cases and deaths detected through COVID-19 in the world, the United States accounts for about 25 percent of cases and 22 percent of deaths, while the U.S. population accounts for only about 4.5 percent. So there's a huge problem, and it's definitely affecting how people behave and how businesses behave. While there is no nationwide lockdown yet, many states have imposed lockdowns, with all non-essential businesses closed. Beyond that, public and private gatherings have been halted and non-essential travel banned. With 331 million people across the U.S. staying at home, consuming only necessities and no unnecessary purchases, the economy is in disarray. Mushrooms are part of the economy, and while the industry isn't doing well, they could have been worse.

   cut production

   The U.S. mushroom industry is largely concentrated in the Kennett Square area of southeastern Pennsylvania. More than 50% of the mushrooms in the United States are produced in this area and shipped everywhere. The rest of the production is concentrated on the West Coast, primarily in California, and other large farms in the central United States. There are also significant imports of mushrooms from Canada and Mexico.

   The foodservice segment of mushroom sales has been hit hard, as nearly all restaurant and hotel trade has been wiped out. Low-quality institutional sales don't exist. Revenues in the foodservice product line were down 50-80%. This is an unsustainable business due to high production costs and low profit margins in the US. In this case, growers who sell a high proportion of their produce to the foodservice sector must significantly reduce production to maintain cash flow. Different farms have reduced compost filler by 33% or 50% or 67% or even 100%! Yes, operations are halting production on a wait-and-see basis. They are selling processed crop products and deciding what happens when the outbreak subsides. Of course, some mushroom farms won't reopen.

   Farms that sell mainly to the retail market are doing better but are still under severe economic pressure. When the "stay at home" order was implemented in the United States, the demand for mushrooms dropped rapidly. Because mushrooms are a perishable product, orders were cut and normal production could not be stored, resulting in packhouses having to dump hundreds of tonnes of mushrooms, or send them out where possible. On farms, third and further fruitings are stopped in order to avoid the costs of harvesting and transport, thereby reducing production capacity and corresponding income streams by 15-30%.

   rebound

   Mushroom sales have bounced back quickly since the retail push began. As restaurants close and people stay home, home cooking is back in fashion and demand for mushrooms is on the rise. As a result, packhouses are busy again and some retail chain farms are harvesting their third batch of mushrooms again. However, inferior quality mushrooms are immediately thrown into the trash, and harvesting becomes very strict to avoid rejects. Because of the high proportion of mushrooms sold into higher-priced categories, production from retail-driven farms has declined, but average prices have generally increased. Despite this, sales of all mushrooms in Pennsylvania are said to be down about 35%!

   To understand the impact of any economic phenomenon, as always - follow the money. Farms whose sales channel yielded solid returns are holding on, while those selling primarily to the foodservice industry are in big trouble. In addition, there is a limit to how much the retail market can absorb. A farm that has been supplying foodservice cannot quickly pivot and sell into the retail market because they don't have a customer base. Retail sales in the US are usually done on contracts between the big growers or packhouses and the retailers, so those outside retailers, even with top quality (and some of them do), can't immediately sell to retail market sale.

   farm

   That's what happens on the sales side. On the farm, it hangs over their heads like the sword of Damocles. Even if a farm is lucky enough to be able to sell mushrooms to retail outlets, they must face the new reality of insisting on improving the quality of their products and the health and safety awareness of their employees. In theory, a virus-infected harvester could kill any farm's harvesters and effectively shut down the farm. As such, strict protocols have been put in place to identify sick employees and enforce quarantine policies while on the job.

   Regulations vary from farm to farm, but more than ever this situation raises environmental expectations. Some of these regulations include: temperature testing and recording at the beginning of each day, social distancing during harvest and all other operations, wearing masks and gloves, social distancing during breaks and lunches, staggering break and lunch schedules, adding a sanitation Experts disinfect tables and chairs, food machines, door handles, tools, etc., conduct special health checks for new employees, prohibit visitors, etc. Of course, these efforts increase costs and reduce efficiency, but this is a necessary cost of doing business in times of crisis management.

   supplier

   In addition to farms, all raw material suppliers are also affected. The commercial composting business is reducing throughput from 67% to 10%. Compost production across Pennsylvania is down about 30%. Strain companies, which also deal with live organisms with certain time limits, are finding their inventories growing. The chicken coop was full of manure. They have their own problems with suppliers of peat, gypsum, supplements and chemicals, but at the end of the day at least our industry is moving forward, albeit cautiously and very unevenly.

   economic stimulus

   To help with this staggering bill, the U.S. government passed a $2.2 trillion stimulus package to help people and businesses. In a nutshell, it involves paying economically eligible citizens $1,200 per person and $500 per child. This is to keep money in the economy and keep many families afloat. As it relates to the mushroom industry, small business loans and tax-free incentives are extended to businesses to keep people working and earning income. These tax credits are equivalent to 100% of the salaries of employees retained during the pandemic. There is also a credit of 100% of 2 weeks wages for employees who are confirmed to have COVID-19 and must quarantine. In addition, it offers up to 10 weeks 66% of the average wages to anyone who demonstrates caring for a family member or dependent. This allows money to flow into the economy, helps jobs, ensures that businesses take care of their workers, and prevents infected workers from coming to work because they need income.

   Canada

   In Canada, the mushroom industry is doing slightly better, as Canada's per capita rate of COVID-19 infections is much lower than in the United States. As many farms sell to the US, they are experiencing the same sales turmoil. However, since Canadian farms generally sell to retail, it is easier for them to minimize losses. Plus, the currency exchange advantages they enjoy soften the blow. Due to their lockdown policy, the domestic market has also shrunk, with restaurants not opening their doors until July 1st! Production is said to be down 10-20% in eastern Canada and 20% in the west.

The second issue is the availability of harvesters. Many Asian harvest workers are concerned about COVID-19 and attendance has been affected. To its credit, however, the Canadian government has increased the processing of foreign workers by about 5 times to help with labor issues. Although not as difficult as life in the United States, no one can escape the impact of this pandemic.

   Stick to it

   As mentioned earlier, things are bad. It's bad for some, but they can be much worse. At least we're producing one food item so we can stay in business. We all know closing down a mushroom farm or composting site full of crops is a disaster. We are not there. Some lucky farms are struggling financially, while many others are accumulating debt, but with government help, at least have a chance of staying afloat. We are all well aware that we must be able to adapt quickly to a developing environment. All we can do now is keep our family culture and clinical order in order and hope this gets over as soon as possible.