PRUNEDALE — A big mushroom farm in Monterey County will permanently shut its doors and eliminate several hundred jobs a few weeks before Christmas, a closure the company says is partly due to California’s sour business climate.
Monterey Mushrooms has decided to close its Royal Oaks site in the Monterey County community of Prunedale, according to a WARN letter the agricultural firm has filed with the state Employment Development Department.
The forbidding business climate in California was a key factor that prodded the company to close the Royal Oaks farm.
“California’s increasing regulatory burden and high cost of doing business left the company with no other options for maintaining profitability,” Monterey Mushrooms stated in an announcement it provided to this news organization..
The company described the closure as a “difficult decision.”
The Monterey County farm’s closure will eliminate 605 jobs, according to the WARN letter Monterey Mushrooms sent to the state EDD.
“This strategic move comes in response to significant challenges faced by the produce industry, including adverse weather, raw material and labor cost inflation at a time when consumers are looking for value in their fresh food purchases,” Monterey Mushrooms stated in the announcement.
The company also declared that the size and complexities of the Royal Oaks site made the facility less competitive.
“It is not viable to invest capital into the (Royal Oaks) farm’s aging infrastructure, compared to planned investment at other farms in the Monterey Mushrooms network,” the company stated.
Watsonville-based Monterey Mushrooms said it is preparing an array of initiatives to bolster the company’s future in the wake of the shutdown:
— Monterey Mushrooms says it remains committed to providing high-quality, fresh mushrooms across its four remaining farms. Monterey’s vertical integration through the seed, composting and growing supply chain is a competitive advantage. One of the remaining farms is in Morgan Hill.
— Upgrades are planned. “Several million dollars” will be spent to enhance efficiency, sustainable quality, and top-level biotech capabilities, the company stated.
— The company is seeking key industry alliances. Details weren’t specified, although further announcements are expected.
The job cuts in Monterey County are slated to take effect around Dec. 9, the WARN letter states.
The mushroom supplier stated that its moves are being instituted to keep the company viable over the long term.
“Monterey Mushrooms appreciates the support of its retail and food service partners and remains dedicated to maintaining its position as a critical player in the mushroom industry,” the company stated in the announcement.