California Dairies Inc., the largest dairy cooperative in the state, is closing its cream cheese and Neufchatel manufacturing facility in Los Banos on March 17.
Andrei Mikhalevsky, the co-op’s CEO, cited the declining volume of milk in the state and the high cost of operating the facility in a press release about the closure.
CDI had in recent years been processing as much as 2.5 million pounds of milk per day at the plant. That volume dropped significantly in 2017, which was a major driver in the decision to cease operations, Brooke Bennett, CDI director of communications, said in an email to Capital Press.
“Unfortunately, the declining volume of milk in California is affecting the entire dairy industry, and CDI is not immune,” Mikhalevsky said.
Milk production in California in 2017 was nearly 2 percent lower than 2016, Bennett said.
When asked about excess milk available elsewhere, she said CDI is a farmer-owned cooperative and its first priority is to profitably market its members’ milk.
In addition, “Made from Real California Milk” is a core component of CDI’s product labeling, she said.
The Los Banos plant has been in operation since 1925. It was first operated by San Joaquin Valley Dairymen. The high cost of operation is due to its age, she said.
The decision to close the plant was made to strengthen the cooperative by optimizing the operation of CDI’s remaining processing facilities, she said.
“While closing a plant is never an easy decision to make, and impacts many valued employees, our member-owners benefit from a more profitable and financially stronger cooperative,” she said.
The closure will affect more than 60 employees, and CDI is committed to supporting them through the transition, CDI stated.
The Los Banos plant manufactured all of CDI’s cream cheese and Neufchatel production. In conjunction with the closure, CDI will exit the cream cheese and Neufchatel business but will continue to operate its other five manufacturing facilities.
The cooperative manufactures fluid milk products, butter and milk powder, with annual sales of more than $4 billion across all 50 states and more than 50 foreign countries, Bennett said.
It is co-owned by more than 400 dairy producers who ship 17 billion pounds of milk annually, producing 43 percent of California’s milk.