In this episode of Lehigh University’s College of Business ilLUminate podcast, we are speaking with Phil Coles and Todd Watkins about their roles as economists on an ambitious $7 million, multi-university and multidisciplinary U.S. Department of Agriculture (USDA) grant titled, “Focusing on Novel Pest and Disease Management Strategies for U.S. Mushroom Farms.”

Coles is a teaching associate professor in the decision and data analytics (DATA) department, who has worked in the mushroom industry for more than 40 years. Watkins is a professor of economics and has served as executive director of the Martindale Center for the Study of Private Enterprise at Lehigh since 2015.

They spoke with Jack Croft, host of the ilLUminate podcast. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.

Below is an edited excerpt from that conversation. Read the complete podcast transcript [PDF]

Jack Croft: Let's start by talking about the broad scope of the USDA grant that you're both part of. What is the problem this grant seeks to solve? And how significant an impact do pests and diseases have on mushroom crops each year?

Phil Coles: Pests are a big part of growing mushrooms, right? There's all these bugs that are out there that are trying to eat our mushrooms before we're able to get them to market. So typically, probably across the industry, 10 to 15% crop loss is typical. And it can be as high as 100%. It depends on what the disease is, what the season is.

It's a lot more difficult in the summer than it is in the winter months because the mushrooms are grown in climate-controlled rooms. So if it's the winter season, [the pests] can't move from room to room, assuming that they're separated. But in the summer, that's when it starts to build up and going into the fall. And we're dealing with two main arthropod pests. They're both fungus gnats. It's a sciarid fly and a phorid fly.

What's interesting, the sciarid flies are a bigger issue in Berks County, Pennsylvania, and the phorid flies are a bigger issue in Chester County, Pennsylvania. That's one of the things that's not understood at all. We'd love to know what it is that's driving the different types of species there. They cause a lot of damage on their own where they'll reduce crop yield. They'll also damage the quality. And I always like to say that people don't really care what food tastes like. They want to make sure that it's pretty.

It's as if we eat with our eyes. If there's blemishes on them, people will not buy them. They become unsalable. They end up in canned product. They won't sell for fresh. But in addition to the problems that those arthropod pests cause on their own, they're also vectors of diseases. So there's a disease called green mold. There's verticillium. There's virus diseases. There's all types of diseases that mushrooms get. And that's why there's so many plant pathologists working on this project. So tremendous, tremendous losses due to these pests.

Croft: What does mushroom farming mean to the U.S. economy in terms of jobs and money? And how does that compare to the global mushroom industry?

Todd Watkins: Globally, I think the mushroom industry is a 50- or 60-billion-dollar industry globally. And I was reading a projection a few weeks ago that the expectation is a $100 billion industry by 2030. So it's a substantive industry. It's not as large as some of the big cash crops, but it's an important industry globally.

The U.S. is a smaller player in that global industry. China is a huge player there. But the U.S. market is about a billion dollars in direct sales of mushrooms. And with all the multipliers of delivery and jobs and suppliers and distribution systems, it's probably $3 billion impact on the U.S. economy, which is plus or minus tens of thousands of American jobs involved.

What's interesting to us is that Pennsylvania is by far the largest supplier of mushrooms in the U.S. So Pennsylvania is more than half, probably two-thirds-ish of the U.S. mushroom production. So it's largely local for us. Phil and I can interact with most of the major growers right here within an hour or two drive.

Coles: It is the largest cash crop in Pennsylvania.

Croft: What universities are involved in the grant? And I think that probably reflects some of what you've been talking about in terms of its importance in Pennsylvania.

Watkins: The grant is housed at Penn State University. Penn State has a fairly large mushroom research group there. And there's some folks from the University of Delaware, University of Florida, and one person from Cal State, Monterey involved in addition to us. So it's multi-institutional. It's pretty cool.

Croft: What is the range of disciplines that are represented by the grantees?Coles: It's mostly plant pathologists. There's actually five plant pathologists that are involved, three computer scientists, two mushroom scientists. And there are also two entomologists, a plant geneticist, a natural products chemist. And Todd and I are the economists. And then there's one extension educator because part of the grant is to make sure that the word gets out amongst the mushroom farmers what the recommendations are that come out of the grant.

Croft: Let's turn now specifically to your role, both of you, as the only two economists on the project. And I'm wondering how unusual it is for a grant like this to include economic feasibility along with laboratory research.

Coles: This is actually a fairly new thing. My undergraduate degree is in entomology, and that's something I like to dabble in is research. And I got several papers that were on pest control. And where I like to look at it is not in the laboratory, but actually in the growing rooms. And when you're looking in the growing rooms, you're seeing actual things that are going on.

So this has become much more popular from the grant standpoint, from the scientific standpoint. But this is something that bleeds into what I've been trying to do for a long time. So it's pretty exciting for me to be involved with this.

Watkins: I think that this is indicative of expanding opportunities for people in the social sciences, the behavioral sciences, business, entrepreneurship, researchers to participate in grant opportunities that we may have not had in previous decades because of the interest in combining forces to tackle really complex problems. I think there's a lot of opportunity for many of our colleagues around Lehigh and elsewhere in disciplines that haven't been as well supported by research grants as the engineering and typical sciences have been.

Croft: We’re at the beginning of this grant. The portion that includes the work that the two of you will be doing, was a $302,000 grant to Lehigh Business that is [for] four years. So with the understanding that you haven't really gotten started on the work that you'll be doing, I would be curious, what are some of the factors that you expect you'll be looking at to determine whether possible solutions that they're working on are, in fact, economically feasible?

Watkins: I'm an outsider in the mushroom industry. It wasn't an industry I knew much about until Phil kind of wrapped me in here. And I've been fire-hose learning a lot. It's an amazingly high-tech sector, but it's also amazingly 19th century, both simultaneously.

There's a lot of science behind what's going on in the growing rooms and optimizing growing conditions and pest management and so forth. But it's also highly reliant on people that just have a feel for it. Literally, they stick their hand in the compost and they say, "Oh, it feels about right," or, "No, let's keep working on it."

There's an art form, a lot of art form there. And one of the issues that this grant is going to tackle is kind of trying to optimize a lot of the pest management approaches as pest management strategies come out of the laboratory. Are they cost effective? So we're going to try to monitor their effectiveness and then identify cost vectors about, is that the best way to do it, or might there be alternative, more cost-effective ways?

One of the big costs is use of energy. They steam these rooms off to get rid of diseases and pests. It costs a lot of money to steam the rooms off. They're also pasteurizing the compost before it goes in. So that energy efficiency, improving the sustainability is one of the big questions we're after.

Another issue that is going to be interesting to me at least, and I think Phil as well, because he's in the DATA department, is what you might call smart agriculture. Some of the scientists and computer people involved in this program are going to develop some automated technology for monitoring pests and other issues like moisture, temperature, airflow, that kind of thing.

So it's big data. There's a lot of data in this sector, but the data is not really well used to make decisions in optimal ways. And we're going to, we hope, be able to take some of that data, analyze and optimize kind of along the way to improve decision-making.

Coles: Todd brings up a great point about the art. And when I got into it in the late '70s, I mean, it was almost all art. Everybody had a feel. It's how you put the water and the way you flush the rooms, which is when you bring fresh air in to reduce the CO2 that cause the fruiting.

And that's what we're trying to do all the time is reduce the art and increase the science. And one of the things we're hoping to do is to coordinate a lot of these things that they're going to be doing in the laboratory with what we're witnessing in the growing rooms. So for example, a couple of the papers that I've done, I almost feel silly presenting them to mushroom growers because they're all things that as mushroom growers, we knew it all the time, except for we couldn't prove it. And sometimes, when you can't prove it, you're actually wrong.

So to validate the things that we knew as growers in our gut is very important because we know that we can then move on to other things. But also, some of the things we thought we knew that turned out actually not to be right when we looked at the data, we can improve what we're doing so much better and use analytical tools and standard operating procedures instead of how somebody just happens to feel that day about what they should do with the CO2 or the temperature or the moisture or what have you.

The more science we can do, the better off we are.

Tags: agriculture
Phillip S. Coles

Phillip S. Coles

Phillip S. Coles is a teaching associate professor in the Department of Decision and Technology Analytics at Lehigh Business.

Todd A. Watkins

Todd A. Watkins

Todd A. Watkins, Ph.D., is a professor in the Department of Economics and executive director for Martindale Center for the Study of Private Enterprise and Microfinance Program at Lehigh Business.