‘Significant damage’ from Sacramento Blue Diamond plant fire. Will almond prices skyrocket?

Officials at Blue Diamond Growers were still assessing the damage done to the cooperative’s Sacramento manufacturing facility after a four-alarm blaze there late Monday that sent two workers to a local hospital.

In a brief statement Tuesday, Blue Diamond said it is investigating what ignited the blaze and is “focused on learning more about the incident and providing support to our employees.”

No estimates on the extent of the damage or dollar loss were available Tuesday, but “the most likely origin is on the second floor” where different types of equipment are housed, said Sacramento Fire Department Capt. Keith Wade. He noted “significant damage” to the floor as well as smoke damage on both the second and third floors of the five-story structure.

More than 100 firefighters – nearly Sacramento’s entire on-duty force Monday – battled the blaze. Relief came from Sacramento Metro Fire, the Cosumnes Fire Protection District in neighboring Elk Grove, West Sacramento and other outside agencies. No firefighters were injured. Three Blue Diamond employees were treated for smoke inhalation.

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Blue Diamond officials Tuesday said it was too early to speculate on the fire’s impact on a critically important California industry. Officials at the Almond Board of California, which represents more than 6,500 growers across the state, deferred to the co-op.

The coming days will likely provide economists a clearer picture on whether the fire will have an effect on the almond industry and the prices paid by consumers. But the industry pegged by UC Davis economists at $21.5 billion is a crucial economic engine employing thousands of workers and accounting for a full quarter of the state’s farm exports.

Whatever the damage to Blue Diamond’s Sacramento operations, the impact is certain to be felt, said agricultural economist Daniel A. Sumner, director of the University of California Agricultural Issues Center at UC Davis.

“Blue Diamond is significant in the almond industry. It’s a very recognized name. It’s not only emblematic of the industry, but it’s an important share of the industry. To the extent that almonds were lost, it’s a terrible loss,” Sumner said.

“In a longer term sense, if machinery was lost, it could take longer (to get back on line),” Sumner added. “These are not raisins or walnuts, so you need specialized stuff. This is not something off the shelf.”

California processes about 80 percent of the world’s almond supply. Blue Diamond is the world’s largest processor of almonds. Roughly one-third of almonds processed in the state go through Blue Diamond’s sites in Salida, Turlock and its massive 10-block Sacramento facility, Sumner said.

And growers are expected to produce record yields this year – 2.5 billion pounds, up from the previous record 2.3 billion-pound crop set last year, federal Department of Agriculture officials predicted in their annual almond forecast last week. Global demand remains firm even with the headwinds of Chinese tariffs.

California has such a big share of the global almond market that any disruption could have an effect, the UC Davis economist said. “We’ll see how much,” Sumner said.