The world of farming is as diverse as the crops it produces, but few stories are as inspiring as that of Chesed Farms in Walla Walla, Washington. What began as a modest experiment in a garage has blossomed into a flourishing mushroom business, generating nearly $200,000 in revenue by 2024 and projecting $250,000 in 2025. Led by Sundown Hazen, named Washington State Entrepreneur of the Year, Chesed Farms exemplifies how passion, persistence, and a little ingenuity can transform an unconventional idea into a profitable enterprise. This blog post dives deep into the success story of Chesed Farms, explores the mushroom farming industry’s evolution, and uncovers how this small-town operation became a standout player in a niche yet growing market.

The Mushroom Farming Industry: A Fertile Ground for Innovation

Mushroom farming isn’t new—humans have cultivated fungi for centuries, from ancient China’s shiitake logs to Europe’s button mushroom caves. However, the modern industry has seen a renaissance in recent decades, driven by rising demand for gourmet, health-conscious, and locally sourced foods. Before the 21st century, mushroom production in the U.S. was dominated by large-scale growers focusing on common varieties like cremini and portobello, often shipped across vast distances. The market was stable but lacked diversity and local flavor, leaving room for small-scale innovators to carve out a niche.

Enter the locavore movement of the 2000s, coupled with growing awareness of mushrooms’ nutritional benefits—think immune-boosting lion’s mane and protein-rich oysters. By 2020, the global mushroom market was valued at $46 billion, with projections to hit $69 billion by 2027, according to Allied Market Research. This surge wasn’t just about quantity; it was about quality and variety, with consumers craving exotic strains and sustainable practices. Yet, despite this growth, regions like Eastern Washington lacked significant local mushroom producers, creating a gap that entrepreneurs like Sundown Hazen could fill.

The Birth of Chesed Farms: A Leap of Faith in a Garage

Sundown Hazen didn’t come from a farming dynasty. With a decade at Apple stores, a stint at UPS, and only fleeting brushes with small-scale community farming, his background was eclectic but hardly agricultural. What he did have was a vision: to provide year-round, locally sourced food to his community in Walla Walla, a tourist-friendly town known for its fine dining and farmers markets. Mushrooms, with their rapid growth cycles and indoor cultivation potential, became his unlikely muse.

In March 2020, just as COVID-19 shut down the world, Sundown and his partner Jonathan filed for Chesed Farms. With a $5,000 investment, they converted a three-car garage into a makeshift mushroom farm, using recycled materials and a DIY approach. The timing couldn’t have been worse—or better. Farmers markets closed, restaurants shuttered, and supply chains faltered, but Sundown pivoted fast. Armed with a bicycle and a hastily built website, he began delivering mushrooms to locals, selling out every batch. This wasn’t luck; it was adaptability, fueled by a belief that mushrooms could connect people in a disconnected time.

Turning Failure into Growth: The Mushroom Learning Curve

Mushroom farming isn’t for the faint-hearted. As Sundown admits, “We failed miserably” in the early days, struggling to master the growth process. Unlike traditional crops, mushrooms demand precision—specific humidity, temperature, and substrate mixes (think oak sawdust and oat pellets at Chesed Farms). The mycelium, the fungal network that births mushrooms, is a living “creature” that requires care akin to a pet. Contamination can wipe out batches, and timing the harvest is a tightrope walk; chestnuts, for instance, have a mere six-to-eight-hour window before quality dips.

Sundown turned to YouTube University, drawing wisdom from channels like Mossy Creek Mushrooms and Southwest Mushrooms (the latter dubbed “the Bob Ross of mushrooms” for its soothing, detailed tutorials). These free resources bridged his knowledge gap, teaching him liquid culture techniques and fruiting room setups. Within six months, Chesed Farms proved its concept—selling every mushroom grown—and secured financing from Craft3 to lease a warehouse, scaling from garage to industrial space in record time.

The Business Model: Zero Advertising, Maximum Relationships

Chesed Farms’ growth is a masterclass in lean entrepreneurship. Remarkably, they’ve spent $0 on traditional advertising in over four years. Instead, Sundown leverages face-to-face connections—farmers markets, restaurant pitches, and community events like mushroom master classes at wineries. At Walla Walla’s Downtown Farmers Market, they aim for $1,000 per session, while smaller markets net $300-$500. This direct-to-consumer channel accounts for roughly 50% of revenue, with the other half from wholesaling to restaurants like the Walla Walla Pasta Factory, their first client.

Monthly overhead is modest—$3,500 covers rent, utilities, insurance, and software like QuickBooks—allowing profit margins of 50-60% gross and 30% net. Diversification bolsters this: freeze-dried powders, Ugly and Tasty discount bags (a brilliant solution for imperfect mushrooms), and substrate sales as soil amendments add value without straying from their core product. A subscription program, offering half- or full-pound weekly mixes, ensures steady cash flow and customer loyalty, some subscribers sticking around since day one.

Mushrooms as a Lifestyle: Health, Community, and Sustainability

Beyond profit, Chesed Farms embodies a mission of “building healthy relationships” through mushrooms. Lion’s mane, chestnuts, and snow oysters (a strain born at the farm) aren’t just crops—they’re conversation starters, nutritional powerhouses, and sustainable marvels. Grown indoors, mushrooms sidestep the land and water demands of traditional agriculture, thriving on waste like sawdust. Sundown’s “ugly” mushroom strategy and donations to soup kitchens further minimize waste, aligning with a circular economy ethos.

For Sundown, the personal transformation is profound. “It’s changed me into becoming who I’m meant to be,” he says, a sentiment echoing the stamina, patience, and persistence he deems essential for farming success. His advice for aspiring mushroom growers? Start simple—focus on fruiting ready-to-fruit blocks, research your market, and communicate relentlessly with customers. It’s a formula that took Chesed Farms from a garage to a projected $250,000 in 2025, all while staying true to its roots.

How Chesed Farms Shaped the Industry

Chesed Farms didn’t invent mushroom farming, but it’s part of a wave redefining it. By filling a local gap in Walla Walla, it’s shown how small-scale growers can thrive alongside industrial giants, meeting demand for premium, traceable food. Its success has ripple effects—encouraging others to explore mushrooms as a side hustle or full-time gig, as seen in the rise of ready-to-fruit block suppliers nationwide. Sundown’s YouTube-inspired journey also highlights a democratization of knowledge, empowering novices to enter the field without formal training.

The farm’s innovations, like the snow oyster strain and Ugly and Tasty bags, push the industry toward creativity and waste reduction. As consumer palates evolve and sustainability climbs priority lists, Chesed Farms stands as a blueprint for how niche farming can blend profit, purpose, and community impact.

Conclusion: A Fungi Future

From a $5,000 garage startup to a $200,000-a-year business, Chesed Farms proves that mushrooms are more than a culinary curiosity—they’re a viable, vibrant industry. Sundown Hazen’s story is a testament to what’s possible when you marry passion with practicality, turning a humble fungi into a flourishing enterprise. Whether you’re a foodie, an entrepreneur, or just mushroom-curious, Chesed Farms offers a taste of what’s to come in the ever-growing world of local agriculture.

FAQs About Mushroom Farming and Chesed Farms

What is mushroom farming?
Mushroom farming is the cultivation of fungi for food, medicine, or other uses, typically indoors using substrates like sawdust or straw to grow mycelium, which then fruits into mushrooms.
Why has mushroom farming become popular recently?
Rising interest in gourmet foods, health benefits (e.g., lion’s mane for cognition), and sustainable farming practices have boosted its popularity, alongside a growing locavore movement.
How does mushroom farming differ from traditional agriculture?
Unlike traditional crops, mushrooms grow indoors, require no sunlight, and use waste materials as substrate, making them less resource-intensive and weather-dependent.
What are the main challenges in mushroom farming?
Contamination, precise environmental control (humidity, temperature), and tight harvest windows pose significant hurdles, requiring constant vigilance and expertise.
How does the mushroom industry impact the environment?
It’s generally positive—mushrooms recycle waste into food, use minimal water, and can improve soil health when spent substrate is reused as fertilizer.
What role do mushrooms play in sustainable food systems?
They offer a low-impact protein source, reduce waste by growing on byproducts, and support local economies through small-scale production.
How has technology influenced mushroom farming?
Automation (e.g., substrate mixers), online learning platforms like YouTube, and tracking software have made it more accessible and efficient for small growers.
What is the economic potential of mushroom farming?
With a global market projected at $69 billion by 2027, it’s lucrative, especially for niche growers offering premium or exotic varieties.
How do societal trends affect mushroom demand?
Health-conscious diets, veganism, and interest in functional foods (e.g., adaptogens) drive demand, as does the push for locally sourced ingredients.
What skills are essential for a mushroom farmer?
Patience, attention to detail, physical stamina, and adaptability are key, alongside basic biology and business acumen.
How does mushroom farming contribute to local communities?
It creates jobs, strengthens food security, and fosters connections through markets and direct sales, as seen with farms like Chesed.
What are the health benefits of eating mushrooms?
They’re rich in vitamins (B, D), minerals, antioxidants, and compounds like beta-glucans, linked to immune support and brain health.
How does gender play a role in mushroom farming?
The industry is gender-neutral, attracting diverse entrepreneurs due to its low entry barriers and indoor nature, appealing to all skill sets.
What was the mushroom industry like before small farms emerged?
It was dominated by large producers focusing on mass-market varieties, with less emphasis on local, specialty mushrooms.
How do small mushroom farms compete with big producers?
They target niche markets, emphasize quality and locality, and build direct customer relationships, bypassing industrial supply chains.
What are the risks of starting a mushroom farm?
Financial loss from contamination, market saturation, and unpredictable yields are risks, mitigated by research and diversification.
How does climate change affect mushroom farming?
Indoor cultivation shields it from weather extremes, though rising energy costs for climate control can increase overhead.
What innovations are shaping mushroom farming’s future?
Genetic strain development, automation, and value-added products like powders and supplements are pushing the industry forward.
How do mushrooms fit into urban farming trends?
Their compact, indoor growth makes them ideal for urban spaces, from basements to rooftops, enhancing city food resilience.
What cultural perceptions influence mushroom popularity?
Once seen as niche or risky (due to wild foraging fears), they’re now celebrated as gourmet and medicinal, shifting consumer views.
Why did Chesed Farms choose mushrooms over other crops?
Sundown saw a gap in local supply, leveraging mushrooms’ fast growth and Walla Walla’s foodie culture for a profitable niche.
What types of mushrooms does Chesed Farms grow?
They cultivate lion’s mane, chestnuts, snow oysters (a farmオリジナル strain), pearl oysters, and more, focusing on gourmet varieties.
How did Chesed Farms start with no farming experience?
Sundown relied on YouTube tutorials from Mossy Creek and Southwest Mushrooms, learning cultivation step-by-step.
What is the Ugly and Tasty product at Chesed Farms?
It’s a discounted mix of imperfect mushrooms sold in bags, reducing waste and appealing to budget-conscious buyers.
How does Chesed Farms keep overhead low?
With $3,500 monthly costs (rent, utilities, insurance), they lease a warehouse and avoid advertising, relying on direct sales.
What is Chesed Farms’ revenue growth trend?
They’ve grown 40% year-over-year, hitting $200,000 in 2024 and aiming for $250,000 in 2025.
How does Chesed Farms sell its mushrooms?
Roughly 50% direct-to-consumer (farmers markets, subscriptions) and 50% wholesale to restaurants and stores.
What sustainability practices does Chesed Farms use?
They freeze-dry excess, donate to soup kitchens, and sell spent substrate as soil amendment, minimizing waste.
How does Chesed Farms price its mushrooms?
Prices reflect growth time—lion’s mane and chestnuts cost more due to six-week cycles, oysters less at three weeks.
What equipment does Chesed Farms rely on?
A sawdust mixer, fruiting tents, and basic storage coolers are key, with a focus on simplicity over complexity.
How does Chesed Farms handle spoilage?
They freeze-dry, donate, or sell “ugly” mushrooms, keeping waste near zero until recent scaling.
What inspired Chesed Farms’ subscription program?
Early low yields prompted a half- or full-pound weekly mix, ensuring steady sales and customer variety.
How does Chesed Farms build customer relationships?
Face-to-face pitches to chefs, market presence, and constant communication about harvest timelines foster trust.
What are Chesed Farms’ profit margins?
Gross margins are 50-60%, netting around 30% after expenses, a solid return for a small operation.
How did COVID-19 affect Chesed Farms’ launch?
Starting in March 2020, they pivoted to bike deliveries and online sales when markets closed, selling out despite chaos.
What value-added products does Chesed Farms offer?
Freeze-dried powders, teas (via collaborations), and substrate soil amendments extend their product line.
How does Chesed Farms use technology?
Google Sheets track batches via QR codes, while YouTube and basic software streamline learning and operations.
What is Chesed Farms’ biggest customer concern?
Consistency in supply is key, addressed by clear communication and scaling production thoughtfully.
How does Chesed Farms collaborate with other businesses?
They partner with bakeries for freeze-drying, tea makers for lion’s mane matcha, and farmers for substrate use.
What sets Chesed Farms apart from competitors?
Zero ad spend, a community focus, and innovative waste solutions like Ugly and Tasty bags distinguish them.
How does Chesed Farms educate its audience?
Through farmers market talks, master classes at wineries, and local TV spots, they demystify mushrooms.
What advice does Chesed Farms give new growers?
Start with fruiting blocks, research competition, and prioritize customer communication for success.