US-based milk marketing and processing cooperative California Dairies has announced the closure of its manufacturing facility in Los Banos.  

The site, which produced milk powder and processed fluids, will halt operations with immediate effect.

Roughly 38 employees are to be affected.

California Dairies president and CEO Brad Anderson cited “evolving dynamics of the marketplace and shifting milk supplies” as the reason for the closure. 

He said that ceasing operations at the site "was a difficult decision, one that was not made lightly...

“We value the contributions of our dedicated employees in Los Banos and recognise the impact this has on them and the community. We are committed to supporting them through this transition. The Los Banos plant and its employees will hold a special place in our company’s history.” 

The business added that it would work “closely” with affected employees to “assist” them during the transition.

Operational since 1925, the Los Banos facility was initially part of San Joaquin Valley Dairymen. It later merged with Danish Creamery and California Milk Producers in 1999 to form California Dairies.  

California Dairies is co-owned by more than 300 dairy producers. It is known for manufacturing butter under the Challenge and Danish Creamery brands, as well as fluid milk products and milk powders. 

The company initially reported plans to shut its Los Banos manufacturing facility in 2018.

However, the business clarified to Just Food that operations at Los Banos were only paused in March 2018, resuming in February the following year.

Besides Los Banos, California Dairies operates manufacturing plants in Turlock, Fresno, Visalia, and Tipton, all in California. The group's newest facility in Bakersfield is due to begin producing extended shelf life and aseptic milk products from December.

This is not the first time California Dairies has had to close a facility. In July 2020, the cooperative shut down its Artesia plant, impacting 49 employees.