A major fruit processing facility in the Central Valley is shutting down.
Del Monte Foods announced last week it would be closing its cannery in Modesto. The Walnut Creek-based company filed for bankruptcy last July and earlier this month auctioned off its assets.
In a statement the company said that as part of the court-supervised sale process, “the go-forward business will not require the operational capacity provided by the Modesto plant.” Del Monte said it has begun winding-down operations, but a firm closure date has not been announced.
The closure will lead to the loss of hundreds of full-time jobs, as well as around 1,000 seasonal workers during harvest time. It also represents another big change for a region long regarded as one of California’s breadbaskets, which has seen similar plants shut down over the years.
The move also comes as other companies are moving to the Central Valley like Blue Diamond Growers, which announced last year it would close its plant in Sacramento and transfer operations to facilities in Turlock and Salida.
Vito Chiesa is the supervisor for Stanislaus County District 2, encompassing areas southeast of Modesto including Turlock and Hughson. A farmer himself, he spoke with Insight Host Vicki Gonzalez about what the impending closure of the Del Monte cannery could mean for the local agricultural industry.
This interview has been edited for length and clarity.
Interview highlights
Tell us a little bit about the communities in your district, and how central agriculture is to their livelihoods?
I have a largely rural district, especially the east. It goes all the way up to La Grange. A lot of farming communities, smaller ones, Denair, Hickman. Just basically about Stanislaus County, we are still an ag-based economy. And before the closure of Del Monte, eight of our largest 10 major manufacturing employers were ag-based, so it's extremely important still to Stanislaus County and its residents.
How big of a role did Del Monte play in the agricultural sector?
It’s interesting because commodities change what's profitable for farmers, and peaches have been a really good commodity. They've gone through some tough times, but they recently have been really good because it's controlled. How much you can plant, how much you can produce.
Having Del Monte on the peach side really has this completely trickle-down effect, starting with the workers at the cannery but it works its way through the whole system… it’s just going to be a tough gut punch to overcome.
How big is, or was, canning to the economy in Stanislaus County?
There's still canneries here, tomato canneries are still doing really well. But I think back to when I was a kid, there were multiple peach canneries — Cal-Can that went bankrupt, Hunt-Wesson had a cannery, Tri-Valley went bankrupt and was bought out. But Del Monte's been kind of the stalwart that has made it through all these times.
We have a long history of it, and the reason is because of the irrigation district and the electricity costs are very reasonable for the state of California. So we have a concentration in our county of food processing facilities.
Is this decline due to people relying less on canned goods?
I think it's a combination of factors, but definitely canned goods. If you walked down the grocery store aisle 20 years ago there was a whole row dedicated to canned goods. Now you have a freezer section, canned goods, you've got fresh year-round now with the southern hemisphere growing fruits and vegetables.
There's a lot more competition, and I don't want to speak for Del Monte, but just the business environment overall, the cost of inputs all the way through the system, has become more expensive. I think in some cases it can be grown cheaper in other places.
Did the closure come as a surprise to you?
Most certainly. I think I found out when they filed bankruptcy back in July, and I thought for sure someone might come in and try and buy the assets and try and operate it. The peach industry specifically… that was the bulk of it. I thought it was still a profitable business. And when I saw they were auctioning and no one was interested in operating, that was really the moment… the true gut punch.
I got a little melancholy on that day because I was a peach grower. I went through a bankruptcy with Tri-Valley. It gets very personal with the people that might lose their jobs, which means they might lose their house and their car. And the trickle down effect of the truckers, the people that are making the cans, the growers, the people that are selling fertilizers. It just works its way through the whole system.
For the farmers and growers that still rely on canning, what options do they have now for finding a processor?
There's only PCP [Pacific Coast Producers] left and I'm not sure they might take some of the peaches. They bid on all the product that was canned in storage, I don't know if they need it.
The other option is what I did as a farmer, took a bulldozer out there and push my trees. It’s very disconcerting because it takes a long time to raise a crop and bring it to maturity, but that's what we did. We converted over, we have all almonds and walnuts. I'm not saying that's what they have to do, but it just limits you on crops. From 250 commercial crops grown in the county… you can't overplant any of them, and we're getting more and more concentrated in just fewer and fewer commodities.
Hundreds of full-time workers will be laid off in the closure, as well as roughly 1,000 seasonal employees during harvest time. Will it be easy for them to land another job?
I'm sure some portion of those folks will migrate over to other canneries because there's always turnover, but it won't be easy and then I don't want anyone to think it'll be easy. The county has workforce development that assists affected workers with resume development, interview preparation job listings, things along that line.
But in some cases you might need work retraining because the jobs were living wage jobs in the cannery, from $20 to $40 an hour. They were pretty good jobs for the San Joaquin Valley, and to replace those jobs is a hard task. But we're going to do the best we can, come alongside them in any way possible, and help them to get the resources they need.
What’s your role in this as a county supervisor?
What I have to do is create an environment where people want to site facilities here, like the Blue Diamond facility that's expanding in Turlock, in my district, and in the Salida area. Bring business[es] that want to be here, that are ancillary to the agricultural area, it’s ideal. There's an abundance of land to grow crops and so that's that's how I see my job. Trying to make sure we can create more and more jobs here locally, so that people can afford to buy a house, purchase a car and make good for their family.
What do you want people to take away or know about this industry in the Central Valley and where it's headed?
I always like to go back to the farm first. The peach industry, like a lot of our vegetable crops, [is] highly labor intensive. There is some mechanization but people don't understand the skillset, and it is truly skilled labor of farm workers in the field. It’s a difficult job and we need to make sure there's appreciation from the start of growing a crop, all the way through the processing of the crop.
I'm proud of what we're doing here in Stanislaus County. I'm proud that we're still an ag-based economy. It’s expanding outside of ag too, but we need to accentuate all these positive things that we have going here, the way of life and the way people treat each other.
