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June 23, 2025 - By Caleb Hampton - Organic mushroom growers and trade groups have criticized a proposed rule announced last month by the U.S. Department of Agriculture that would rescind the National Organic Program’s recently adopted Market Development for Mushrooms and Pet Food regulations.
The regulations, issued in December, were intended to address inconsistencies in standards used to certify organic mushrooms and pet food, with the goal of instilling greater consumer confidence in the processes used to produce them.
“Reversing the recently established framework for organic mushroom and pet food production will undermine the domestic organic market and harm U.S. farmers by hampering market development and eroding trust in the organic seal,” Rebekah Weber, policy director for California Certified Organic Farmers, said in a June 4 letter to the National Organic Program Standards Division, which is part of USDA.
Mushroom growers and organic trade groups say the 2024 regulations were developed through a years-long process that involved close collaboration with farmers and industry stakeholders.
“We as an industry decided that’s how we’d like to set it up—the standards that we put in place for ourselves to follow,” said Ian Garrone, CEO of Far West Fungi, an organic specialty mushroom farm in Monterey County that supplies grocery retailers such as Safeway and Whole Foods.
Farmers and trade groups said USDA’s decision to rescind the new regulations appeared to have been made unilaterally. The department did not consult stakeholders, they said, and it bypassed the National Organic Standards Board, which typically votes to approve potential regulatory actions before recommending them to USDA.
Organic trade groups warned that the circumvention of that process could jeopardize the confidence consumers have in organic products in general, not just mushrooms or pet food.
“This departure from established protocol threatens to undermine stakeholder trust and the integrity of the organic regulatory process while also setting a troubling precedent,” the Organic Trade Association said last month in a statement.
With regard to mushroom and pet food regulations specifically, the group said, “USDA’s proposed rollback would undo over 15 years of stakeholder collaboration.”
Commercial mushroom farms typically grow the fungi indoors by introducing spawn, or mycelium, to substrate composed of compost or woody materials. Growers of white mushrooms, which make up the bulk of mushroom sales in the U.S., use compost substrate, while specialty mushrooms such as shiitakes are grown from substrate made of sawdust and byproducts from crops such as rice, wheat and almonds.
“Mushrooms are very absorbent,” Garrone said. “They get their flavor profiles and nutritional elements from the wood and material they grow from.”
The new regulations for organic mushrooms imposed more stringent processes to ensure each component of a mushroom farm’s substrate is produced organically.
Garrone and other farmers cautioned that the regulations could be a “heavy lift” for smaller specialty mushroom farms that may lack the economies of scale to purchase large quantities of agricultural byproducts to make their own substrate.
But overall, he said, the regulations were needed to give consumers confidence organic mushrooms are truly organic.
“Our customers definitely are looking for that kind of transparency,” Garrone said.
In its statement opposing the rescission of the regulations, the Organic Trade Association cited data showing sales of U.S.-grown organic mushrooms stagnated in recent years, while imports of Canadian-grown organic mushrooms, which are subject to stricter standards, increased. Farmers and trade groups blamed the lack of demand for U.S.-grown organic mushrooms on poorly developed regulations.
“Current regulations do not address the unique nature of mushroom and pet food production,” Weber said. “This, in turn, erodes trust in the organic seal because consumers expect the organic label to represent a consistent and reliable standard.”
Contributing to the need for new regulations, growers said, was an increase during the past decade in substrate for specialty mushrooms imported from China by U.S. producers.
For a quarter of what it costs Far West Fungi to produce its own substrate from domestically sourced materials, Garrone said, other farms began importing blocks of premade substrate from China.
When it arrives in the U.S., the imported substrate is already colonized by mycelium, a process that takes two to three months, with importing producers able to harvest mushrooms from the substrate within a week or two. These mushrooms are still labeled as organic, growers said, even if components of the substrate were not carefully inspected.
“As an industry, we were like, hey, we need to have some distinction” between mushrooms grown from imported substrate versus domestically produced substrate, Garrone said.
“The restrictions were very loose, and it basically undermined the U.S. grower,” he added.
Because white mushrooms dominate U.S. sales, farms that grow them typically win contracts from major retailers to supply all the mushrooms the stores want to sell, including specialty mushrooms. Farms with contracts then source specialty mushrooms from farms that specialize in growing them.
“At one point, we were supplying the entire industry with shiitake mushrooms,” said Louis Caputo, co-owner of KSS Sales, a Pennsylvania-based specialty mushroom purveyor and distributor that grows conventional and organic mushrooms.
When imported blocks of substrate became available, he said, it became so easy to produce specialty mushrooms that large mushroom farms cut out the farms that supplied them and began growing their own.
“Instead of buying a product from a domestic supplier, they’re basically producing it much cheaper with all the same labeling,” Caputo said. “We started losing shiitake sales.”
He said he was not familiar with USDA’s proposal to rescind the new organic regulations, but added “any hurdle that can make it harder for importers is good for us.”
USDA did not respond to questions from Ag Alert® about its proposed rescission of the National Organic Program’s Market Development for Mushrooms and Pet Food.
Caleb Hampton is assistant editor of Ag Alert. He can be reached at champton@cfbf.com.
The California Farm Bureau Federation works to protect family farms and ranches on behalf of nearly 32,000 members statewide and as part of a nationwide network of more than 5.5 million Farm Bureau members.
Source: Reprinted with permission CFBF
