With a farm gate value of €158.6 million and 85% of production exported to the UK, mushrooms remain Ireland’s most valuable horticultural crop — a steady performer in an evolving agricultural landscape.

The report published by Teagasc provides an overview of the production costs of white button mushrooms in Ireland.

As the industry adapts to changing input costs, shifts in labour regulations, and supply chain dynamics, producers are finding themselves navigating a more complex environment. Rising costs are not unique to mushrooms, but given their scale and economic footprint, even modest fluctuations in input prices carry noticeable effects across the sector.

Labour Costs Take Center Stage

In 2025, labour continues to dominate production expenses, representing 44.1% of total input costs for mushroom farms. New increases in the national minimum wage (up 6.3%) and rising employer contributions have pushed overall labour costs up by 7.9%.

But the real alarm bells are ringing over the General Employment Permit (GEP) system. A large portion of mushroom farm workers are non-EU nationals employed under this scheme. Recent policy changes require salaries to rise to €30,000 per year, a significant jump from the 2024 threshold of €25,756 — a move that could push many farms, already operating on thin margins, into the red.

Substrate Shortages and Inflation

Substrate — which includes mushroom compost and casing — makes up a staggering 34% of production costs. In the past year alone, substrate prices rose by 8.9%. A key driver? Straw shortages. Irish mushroom compost relies heavily on wheat straw, but wet weather in 2023 and 2024, coupled with land use changes and government incentives for straw incorporation (the SIM scheme), have choked supply. The result: farmers have been forced to import straw from the UK and Spain at premium prices.

Average compost prices jumped from €238 to €259 per ton, while casing material costs surged 13.3%, largely due to higher transport and labour expenses.

Energy Still a Heavyweight

While many mushroom farms have transitioned to biomass heating (woodchip and pellets), energy costs are far from stable. The past 12 months saw energy input inflation of 13.6%, with heating alone rising 5.4%. Electricity prices also ticked upwards, although those locked into earlier fixed-rate contracts fared better.

Even small increases in energy prices ripple through operations that rely on climate-controlled environments year-round. With 6.6% of total costs tied to energy, volatility in this area remains a key concern.

Margins Under Pressure

Packaging costs, at 8.8% of total inputs, remained stable — one of the few areas without inflation. But this minor relief is overshadowed by rising expenses across nearly every other input category. Crop protection products rose 2.6%, and miscellaneous fixed costs — including waste disposal and maintenance — were up 5.5%.

The combined result is a 7.7% increase in total production costs from 2024 to 2025 — the highest in several years.

What’s the Outlook?

Ireland’s mushroom growers are walking a tightrope. With export prices largely dictated by UK supermarket chains, many producers have limited negotiating power to pass these costs downstream. At the same time, investment in automation and technology — critical to long-term resilience — remains out of reach for many due to tight cash flow and rising interest rates.

If policymakers don’t step in with targeted support — whether through labour permit reform, input subsidies, or infrastructure grants — the sector may contract. And that would be a blow not just to Ireland, but to the entire European mushroom supply chain, which leans heavily on Irish exports.