Cyathus stercoreus are Birds Nest Fungi belonging to the family Nidulariaceae. The small cup-shaped light-brown fungi are shaggy when young, losing some of the woolly texture as they mature, and typically grow on herbivore dung or manure enriched soil. The specimens I have seen have been up to approximately 6mm wide at the top by 10mm high. I have observed them growing singly, in loose groups and in tight clusters.
As the fungus matures, the flat top splits and peels to reveal smooth, grey, flattened and roughly circular packages which contain the spores. These packages are called peridioles, and somewhat resemble eggs in a nest, hence the common name of Birds Nest Fungi.
Mature Cyathus stercoreus, growing in manure enriched soil in my garden, have split to expose peridioles
An important identifying feature of Cyathus stercoreus, is the smooth non-grooved inner walls of the fungus. Some other species of Birds Nest Fungi also have dark peridioles, but have a grooved or furrowed inside surface.
Raindrops displace and scatter the peridioles, which then can be injested by herbivores without harm to the spores. Once passing through the animal, the spores then have a fertile growing pad in their new dung substrate. As far as I am aware at this stage, the peridioles can also decay due to weather, and release the spores, but I am looking for more information on this.
But herbivores, like cattle, are particular about their eating habits and will usually not consume grass immediately next to a cow pie, so the peridioles must be flung a reasonable distance by the action of rain. Upon close inspection, each peridiole has a tiny 'button' on the underside. As the peridiole is ejected, it has enough momentum to uncoil a sticky 'string' from the before-mentioned button, flying through the air and sticking to vegetation it comes in contact with. There is easy-to-understand reading and diagrams on this interesting ejection proceedure here.
And here is a key for Birds Nest Fungi. It is not Australian, but I keyed out Cyathus stercoreus and arrived at the right species. Cyathus stercoreus is found in many parts of the world, but I am not sure how widely it is distributed throughout Australia.
My sightings of Cyathus stercoreus
[This will be updated with new sightings]
Hunter Valley NSW - On aged cow dung - Nov, Dec, Mar, Apr, Jun, Jul, Aug.
Hunter Valley NSW - In organicaly-enriched soil in my garden - Feb, Mar, Jul, Aug.
Hunter Valley NSW - On bark mulch that has not be enriched with compost or manure - Apr.
Baradine (NW NSW) - On aged cow dung - Jul. On sugarcane mulch in garden May 2012, Jun 2012.
Pilliga Forests (NW NSW) - Merriwindi SCA on horse dung Apr 2012, May 2012, Jun 2012.
Macquarie Marshes district (NW NSW) - On aged cow dung - Jul 2010, Aug 2010.
Fungus, on cow manure, on the right displaying neatly packed peridioles
Aged and out-of-shape cluster of Cyathus stercoreus in my garden