Monterey Mushrooms to shut down Royal Oaks facility.

One of the largest mushroom producers in the United States, Monterey Mushrooms, will be closing its 275-acre Royal Oaks facility in North Monterey County. In a WARN letter issued to the California Employment Development Department, the company reports that 605 people will be terminated by the end of this year in December. 

“After decades of operation, the Royal Oaks farm's footprint and complex operating model has become less competitive,” the company said in a press release. “It is not viable to invest capital into the farm's aging infrastructure, compared to planned investment at other farms in the Monterey Mushrooms network.”

Aside from aging infrastructure, adverse weather, and inflated costs for raw materials and labor, the Royal Oaks location has faced a slew of other challenges in recent years. In 2018 the company agreed to pay $300,000 in penalties over water quality violations stemming from major winter storms of late 2016 and early 2017. In the same year, a 60-year-old man was killed in a tractor accident at work.  

And the water violations continued to build. The company faced several other settlements reaching up to $2.24 million, polluting several waterways including Fisher Creek in San Jose and Elkhorn Slough.

The company has four remaining farms, with the closest facility 36 miles north in Morgan Hill.

“As far as facility size the acreage it's one of our largest, production-wise it’s about in the middle,” says Bruce Knobeloch, VP of Marketing & Product Development at Monterey Mushrooms.

Mushrooms are one of 156 crops grown in Monterey County, where agriculture contributes over $3.9 billion per year, according to the Monterey County Farm Bureau. The company was at one point shipping about 850,000 pounds a week of white caps and portobellos. While mushrooms are not one of the top crops grown in the county, they rank as the 12th-largest producer, valued at $89.98 million, according to the Monterey County Agricultural Commissioner’s 2023 crop report. 

When it comes to hopes and dreams for a facility to open in a new location, Knobeloch says, “We don’t have any plans in place at this point,” with the immediate focus to support all affected workers and customers.

Katie Rodriguez is a California Local News Fellow.