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The birds nest fungus is harmless to the plants, but if want to clean up the beds, can be removed from surface and the mulch loosen to allow to air to dry the area. Would mix up some Murphy's Oil Soap (or dish soap) a few drops per gallon water to pour over the effected areas and neutralize the fungi growth. If even after the soap treatment and airing the growth continues can apply a Liquid Copper Fungicide to clear the unwanted fungus growth up in the plant beds.
Give it a go and let me know how it goes...
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Thanks! If some of the fungus is missed in the bed will it contiunue to grow? and the white moldy look? will it go back to the dirt or black original color? the soap won't harm my plants will it? and is there anything i can do to prevent this going forward? can't do anything about the massive mushrooms except remove them correct? thanks so much for your info
Hi fungus is normal process of helping to break down the moist mulch matter, so can help reduce the outbreak by turning the mulch layers to air out... Will have to remove any mushrooms by hand and he diluted soap application will prevent the fungi spores from sticking to spread further and dwindle down. Once the turn the mulch the organic matter will break down and darken as compost into soil.
The best way to avoid all these problems and bring about beneficial effects by mulching is to add nitrogen to woody and hardwood bark products followed by composting to lower the carbon to nitrogen ratio. Blending of grass clippings with wood wastes before composting is one way to achieve this and adding chicken manure to provide nitrogen needed also may help as the microorganisms reduce the potential for growth of nuisance fungi and provide control of many plant diseases.
reference > http://www.mulchbarn.net/fungi.php