Sown in China, grown on high seas, ‘Product of USA’ mushrooms are killing American farms
KENNETT SQUARE, Pa. — That “locally grown” produce for sale in your neighborhood grocery store?
It may have started its life up to 6,000 miles away.
And that irks Gary Schroeder, who has been growing and packing specialty mushrooms for nearly 40 years in the socalled Mushroom Capital of the World, Kennett Square. Schroeder’s Oakshire Mushroom Farms had annual sales of $37 million in 2017 and employed 65 people last year.
In early January, Schroeder’s farm was forced to slash the workforce to 16, and file for bankruptcy.
“We’ve got ourselves in crisis mode,” said Schroeder, who founded Oakshire in the mid-1980s and is now laboring under more than $10 million in debt, according to documents filed in court. “I’m fighting a battle to save this company every day.”
Schroeder, and several other mushroom producers in Southeastern Pennsylvania, say they have been clobbered by imports from both Canada and China.
“This is one of the reasons that the local shiitake market has suffered,” said Chris Alonzo, the third-generation owner of Pietro Farms based in Kennett Square. “That’s one of the things that has hurt Oakshire.”
To add insult to injury, the farmers say, mushrooms that originated in China are allowed to be labeled “Product of the USA” due to a regulatory quirk.
Shiitakes are a specialty mushroom, and for years they have fetched a premium at food markets, retailing for about $10 a pound. They’re chewier and more flavorful than standard white button, or brown crimini and portabello mushrooms. Last year, there were about $45 million in wholesale shiitake sales industry wide.
Shroeder’s Oakshire Farm is also one of a handful of American companies that produce the logs on which shiitakes are grown.
The logs, made from compressed sawdust and grain, are inoculated with shiitake mushroom spawn — the fungi equivalent of seed. The spawn sends out the thread-like mycelium, which spreads through the logs and becomes the bulk of the mushroom organism. When the shiitake mycelium is shocked — when it senses it’s going to die — it sends out fruiting bodies that we recognize as mushrooms. Each log produces about 2.5 pounds of shiitakes.
Until mid-2018, Schroeder was manufacturing 1.5 million of them a year. No longer.
In the course of nine months last year, Schroeder said, Chinese log manufacturers swept in, deeply undercut the prices, and wiped out 85 percent of his log sales.
Mushroom growers operate on razorthin margins, according to industry experts, so it makes economic sense for them to switch to a cheaper log as long as it produces a safe and high-quality product.