Four years ago, Mercy for Animals launched a program to transition farmers from animal agriculture to fungi production. But is the new system any better financially for the farmers? 

BY LISA HELD

APRIL 1, 2024

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In an old tobacco barn in North Carolina, Craig Watts completed three trial runs growing shiitakes before he felt ready to scale up. Then, he pulled a shipping container into one of the four giant barns that have been sitting empty on his farm and connected plumbing and electrical systems that once provided water and lighting for thousands of chickens destined to become Perdue products.

Now, he’s working on expanding his vegetable production on the farm, so that by later this spring, once he’s (hopefully) ready to sell his mushrooms at the local farmers’ market, he won’t be “a one-trick pony.”

“The pool of people you can actually help is very limited,” because if a farmer has significant debt from building and upgrading poultry, hog, or dairy infrastructure, and most do, the numbers just don’t work.

Over about a decade, Watts has become an indie rockstar of agriculture, famous among a niche fan base of food-system reformers, animal-welfare advocates, and farmers who—after years of being exploited by big, industrial meat companies—decided to speak up and get out. So it was only natural that he also became a poster child for Transfarmation, a Mercy for Animals program that aims to set those farmers up for an independent, profitable, fungi-focused future.

Civil Eats covered the program in early 2020, shortly after it launched, and Watts’ slow but determined journey illustrates the complicated reality of progress over the past four years. While some of Transfarmation’s farmers have laid a lot of groundwork, the path between feeding livestock and misting mushroom substrate was always bound to be muddy.

Transfarmation’s director, Tyler Whitley, estimates that over the last four years, about 100 farmers have reached out expressing interest. Of those, his team has worked with 12 farmers, nine of whom are still enrolled. (The ones who dropped out, he said, mostly did so due to health issues.)

While Transfarmation farmers also grow vegetables, hemp, and other crops, most focus on specialty mushrooms—including blue oyster, lion’s mane, and reishi—due to strong market demand, infrastructure compatibilities, and the fact that they are  quick and fairly easy to grow.

The pandemic hit right after the project launched, and that set the timeline back significantly, says Whitley. Then, as the team identified challenges, they attempted to meet each one along the way. They contracted with an agricultural economics firm to analyze the costs of conversion and return on various crops. When it was clear farmers were having difficulty finding buyers for their mushrooms, they hired a “business engagement specialist” to identify restaurants and other buyers farmers might link up with. When farmers faced technical barriers, they found contractors who could visit each farm and help troubleshoot.

“Growth is always a process,” Whitley said.

Some farmers are now closer to running a viable business than Watts, who balances his mushroom business  with his other, related job helping former contract farmers find resources through the Socially Responsible Agriculture Project. The Transfarmation team holds up Tom Lim, for instance, as a model. At a North Carolina conference in early February, attendees enjoyed his mushrooms in a tofu scramble for breakfast and a tartlet for dinner and they went home with a bag of dried mushrooms and instructions to make broth.

Still, Lim’s path to making money on his crop has been rocky. After scheduling challenges made it difficult for him to make a profit at farmers’ markets, the Transfarmation team helped him find wholesale buyers; that approach has been successful so far. Now, in addition to his participation in the pilot project, the program is leasing part of Lim’s farm from him and spending about $200,000 to convert one of his old chicken barns into a demonstration greenhouse that aims to show what’s possible.

“I’ve got to get my shit together and quit tinkering and get this thing working to where it’s replicable….There’s a learning curve that I can shorten for other farmers.”

But Watts said one of the biggest limitations of transition programs like Transfarmation and Miyoko’s Creamery’s Dairy Farm Transition is that “the pool of people you can actually help is very limited.” If a farmer has significant debt from building and upgrading poultry, hog, or dairy infrastructure—and most do—the numbers just don’t work. It’s more complicated than just switching what you grow in a giant, windowless barn. They’re made for one thing, raising chickens, and changing requires investments that can cost upwards of $100,000. Not to mention the fact that small farms growing specialty crops and selling directly to consumers are often barely scraping by.

That leads to a deeper question: Is the system being proposed actually going to be any better, financially, for the farmer compared to what they might make with an industrial chicken contract?

“That’s the $64,000 question,” Watts said. “But here’s the difference: If this doesn’t work out, I can walk away. I’m not going to lose anything.”

(Transfarmation’s financial projections predict an annual operating income of between $26,000 to $284,000, in addition to about $17 per hour in hourly wages to the farmer, based on converting one poultry house to a greenhouse, depending on the crop grown.)

Whitley, meanwhile, said that while the number of farmers may seem small and the finances complicated, the point was never to go out and help farmers transition out of operating concentrated animal feeding operations one by one. He sees each Transfarmation farmer, instead, as a mini pilot project. As they experiment and work out the kinks, the Transfarmation team collects data and documents successes and failures. Then, they write it all down and put it online.

Lead photo: Craig Watts in his mushroom-growing shipping container. (Photo courtesy of Mercy for Animals)

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“Our theory of change is working with individual farmers to create publicly accessible resources that anyone can independently implement,” he said. “We’re not trying to recreate another power-holding system.”

Or, as Watts puts it in his characteristically humble way, “I’ve got to get my shit together and quit tinkering and get this thing working to where it’s replicable. I see that as my role. There’s a learning curve that I can shorten for other farmers.”

This story has been updated to better reflect Tom Lim’s experience transitioning to mushroom farming.

Lisa Held is Civil Eats’ senior staff reporter and contributing editor. Since 2015, she has reported on agriculture and the food system with an eye toward sustainability, equality, and health, and her stories have appeared in publications including The Guardian, The Washington Post, and Mother Jones. In the past, she covered health and wellness and was an editor at Well+Good. She is based in Baltimore and has a master's degree from Columbia University's School of Journalism. Read more >