The Importance of Agriculture to the California Economy

A wide view on a crop field with mountains in the background.


California is well-known for its diverse agricultural offerings; from beef to avocados to dairy, the Golden State puts a premium on producing the best. But the standout quality isn’t just reflected in the supermarkets and on dinner tables – the importance of agriculture to the California economy is crucial to the well-being of the state and country as a whole.

In this guide to California’s enormous economic bounty, we’ll cover:

  • Why is agriculture important to the California economy?
  • How large is the California economy?
  • Agricultural opportunities in California
  • California economy statistics
  • Agricultural lending in California

Once you get a better sense of how abundant the land can be in California, you’ll be ready to dive into this promising sector for a brighter future.


Why is Agriculture Important to the California Economy?

America’s 31st state was initially made famous for its economic bounty of gold. However, as the western frontier became more developed, it became abundantly clear that the soil had more to offer than valuable rocks.

Today, California’s agricultural exports top $25 billion annually, and its farmers produce over one third of the vegetables in the United States. In a state that is concurrently dominating the tech sector and has the most valuable real estate in America, it is equally impressive that agriculture accounts for approximately 3% of California’s GDP.


How Large is the California Economy?

When trying to understand how much opportunity there is for agricultural production in California, it is best to size up California’s economy relative to the rest of the world.

California itself boasts a $3.4 trillion GDP in 2021. If California were a sovereign nation, this would rank it as the fifth largest economy in the world ahead of India and right behind Germany. 12 percent of the citizens in the United States live in California, but the state contributes nearly 15% of the United States GDP.

The impact of California’s agricultural production becomes even more impressive when you understand how economically dominant the state is, and how California continues to expand its agricultural sector.


California Agricultural Opportunities

Today, you can find a bounty of agricultural commodities produced in California. The top crops in terms of gross sales for California include:

  • Almonds
  • Cattle
  • Pistachios
  • Strawberries
  • Lettuce
  • Flowers
  • Tomatoes
  • Oranges

However, the singular products are not the only things growing and thriving in California. Ag Tech is thriving in California’s farmland, and viticulture is fast rising as one of the best opportunities for niche farming. When it comes to farming ventures in California, the sky truly is the limit for success.


California Agricultural Economy Statistics

As if the products and numbers we covered weren’t convincing enough, here are some statistics illuminating just how prosperous California has become in the 21st century:

  • California’s accounts for 12.5% of all agricultural production in the United States.
  • In 2020, California generated nearly $50 Billion in cash receipts from agriculture.
  • California by itself is the 5th largest supplier of food and cotton in the world.
  • California produces nearly double the agricultural revenue of the 2nd highest state (Iowa).
  • Land value of California farm real estate has risen by nearly 38% in the last 5 years.
  • California creates 62% of the national value of fruit and nut crops in the United States.

These statistics show the many different ways California’s agricultural sector makes an impact on the country and the world. Similarly, the growth and sustainability of farming in California illuminate opportunities for new farmers or agricultural expansion in California.


California Agricultural Lending

With all the opportunity and value created by California farmers and ranchers, there needs to be stable financial backing to help current and aspiring agricultural entrepreneurs in the state.

Agricultural financing has traditionally been challenging for farmers due to perceived risk, but modern lenders are providing flexible liquidity using three types of agricultural loans:

  • Farmer Mac Loans
  • Farm Service Agency Loans
  • Agricultural Home Loans

These lending options allow different levels of agribusiness financing for entrepreneurs of all types. Getting proper lending for a farm or ranch in California is best done by working with local bankers who understand the financial landscape and obstacles that must be overcome for long-term success.


Community West Bank Helps California Agriculture Grow

At Community West Bank, our goal is to help farmers and agricultural entrepreneurs get funded for new opportunities. We see the value in the continued growth of our California farmland and ranch land, and know that it takes innovation, determination, and a strong team to make a plan work.

For information about available funding for land acquisitions, refinancing, or other lending options for agricultural projects, please contact us to get started.

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