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Naturally (fungi) rotted or composted mulch - which is best?

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We are have been struggling to locate the materials and create a garden to organic standards (heat composted, turned three times), when we could get mill wood chips (with no leaves or branches) cheaply by the truckload and just spread them out to make a "back to eden" garden. From what I have read, these will break down more slowly by fungi rather than bacteria, but this will provide more carbon than composting the material - which we desperately need in our sandy soil.

I know it will break down pesticides and harmful bacteria to heat compost - but we are sourcing clean New Zealand forestry trees, not some conventional farmer's feedlot manure. In terms if its benefit as a mulch, and soil structure, is there any benefit to compost over woodchip that breaks down naturally? (this is presuming that you spread apart the woodchip, and plant directly in the soil with a little handful of compost added).

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Location: Arkansas - Zone 7B/8A stoney, sandy loam soil pH 6.5
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hau Annie, first off there are worlds of differences between compost and woodchips.
Compost will be pulled down into the soil by worms which will then consume it, because of this the humus you get from compost tends to go away rather quickly.
Wood chips will not be so incorporated but they will last longer and they will end up as humus which will then be consumed by the worms but you will already have many mycorrhizal organisms growing in your soil.

As you mentioned, compost tends to feed bacteria and wood chips tend to be a growing ground for fungi.
If you are struggling to get enough compost for your gardens, why not use the thick mulch method with wood chips?
We have one garden area we are using this method on and it is working out quite nicely.
We spread a 2" thick layer of wood chips then took some mushroom inoculant and sprayed it over the wood chips. We laid down 3 2" thick layers this way and then we left it alone over the winter.
In the spring of this first year we planted into pockets of compost which we added at the spacing we wanted for our plants.
The second year we planted directly into the bed without adding anything, just planted the seeds and watered them in.
This coming year, we have to decide if we are going to add another few layers of woodchips since the initial batch is decomposing quickly now.

Another method you can use is planting into straw bales, if you can get organically grown straw. We set up these gardens two bales wide and butt them up until we get the length we want for a garden bed.
From there all you do is water them till saturated and add nitrogen to start them heating up internally, this takes 3 weeks to fully prep. once they have heated and cooled down you dig holes for plants and use either compost or a soil to plant the seeds in.
Bales work very well for us for broccoli, peppers, tomatoes, strawberries, squashes, beans and just about anything that isn't a root vegetable. Some people have trouble with bales, but we have not had any issues at all and after two growing seasons you have nice compost to use and start new bales.
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Location: Wisconsin, zone 4
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In addition to what Bryant said, in order for your "Back to Eden" garden to work best, it needs to have the small branches and leaves chipped in with the wood. The wood chips with no leaves or green matter will break down, but very slowly. I have done it both ways, and if you just used chipped wood with no green matter, you will have to use some sort of fertilizer, whether it's manure, green plant matter, compost, urine, or whatever. I have areas that I left for several years and mushrooms did take over and they are breaking down, but very slowly. If you inoculate as Bryant said, it will speed the process.

You may want to try Bryant's methods, or do as you said and just spread the wood chips. I would continue making compost and add it on top of the wood chips as it becomes available, and plant in pockets of it as Bryant said in the meantime.
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