Mushroom growers look to central marketing

By Paul Mooney

Mushroom growers are drawing up plans for central marketing through their co-op producer group, CMP, just as IDB, for example, does with milk. At present the bulk of mushrooms produced here are sold to the UK through the packhouses of mushroom traders. The two largest are Monaghan Mushrooms and Walshes of Wexford.

However, in recent weeks CMP has outlined plans to growers under which it would co-ordinate marketing to the UK under a brand. The obvious advantage is that this would keep the current trading margin in growers' hands. CMP is likely to look for EU aid to assist it to do so. It is unusual in having grower members in Ireland, England, Scotland and a few in Holland. It is already credited by growers with delivering significant savings on packaging by bulk buying. Packaging costs are considerable - about 2c to 3c per lb.

Sector now lean and fit

Altogether, there is some guarded optimism in the sector at the moment. The sector has stabilised after a number of very difficult years. Those left in the business are very efficient and are making profits although they face further serious challenges ahead, particularly on rising labour and oil costs.

But the same oil price increases or more will apply in Poland and Holland. Transport costs into the key UK market are lower from Ireland than Poland. The journey from here is 24 hours shorter - a major advantage for freshness and quality.

For the very same reason, the sector does not face a threat from South America or Asia in the way that beef or chicken does.

Price now varies from about 85 cent per lb sold to packhouses and up to about 100 cent per lb sold directly to supermarkets. Five years ago, in the good times, growers were getting up to €1.27 per lb.

The domestic market absorbs just a small proportion of the mushrooms produced here but it does pay top price. Over 80% are produced for export to the UK via packhouses. Britain is the nearest destination for a product which has a particularly short shelf life. Continental markets continue to be difficult with prices under pressure from Polish product in particular.

Poland's big advantage is lower labour costs. Picking costs here are in the region of 20c to 25c per lb, they are only half that in Poland. To be viable now a grower here needs to be producing about 15,000 lbs a week or 350 tonnes a year. The bigger growers are producing 50,000 lbs per week and upwards.

In the years when exchange rates benefited Irish growers it crucified their UK counterparts. The result is that Irish operators now control and own a considerable chunk of UK production, most notably in the person of Ronnie Wilson and Walsh Mushrooms of Wexford.

Fewer growers

There are now only about 250 producers left on the island, about half in the Republic and half in Northern Ireland. A decade ago there were about 1,100.

Those left are bigger. As a result total production has come back only slightly over the same period and now stands at about 83,000 tonnes with a farm gate value of about €160 million. Of this total tonnage about 62,000 tonnes is produced in the Republic.

The difficulties of recent years were caused by strengthening of the euro, rising labour costs and UK supermarkets sourcing cheaper mushrooms from the continent including from Eastern Europe.