The easiest way to tell when the vermicompost is ready is when you look in the worm bin and most of the original bedding is gone. The original bedding will have been "changed" into a dark colour, earthy-smelling vermicompost. Vermicompost is a mixture of decomposed organic matter and worm castings (worm poop). The process takes anywhere from a few weeks to six months, based on the size of the bin and the number of worms. The longer you let the worms work, the finer and richer the vermicompost will be and eventually turn to worm castings only. The downside, however, is that the longer the worms work, the fewer worms you will have in the bin, as they will die off due to living in their own castings for longer periods. My recommendation would be to harvest somewhere in the middle at about the three-month mark to find a happy balance between the two.
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