{"id":224,"date":"2022-04-28T07:35:23","date_gmt":"2022-04-28T07:35:23","guid":{"rendered":"https:\/\/bravantefarmcapital.com\/?page_id=224"},"modified":"2023-01-29T18:52:30","modified_gmt":"2023-01-29T18:52:30","slug":"why-is-california-a-successful-agricultural-state-for-investors","status":"publish","type":"page","link":"https:\/\/bravantefarmcapital.com\/education\/why-is-california-a-successful-agricultural-state-for-investors\/","title":{"rendered":"Why is California a successful agricultural state for investors?"},"content":{"rendered":"\n
California is an economic giant. The state accounts for nearly 15% of U.S. gross domestic product, and California is the unquestioned global capital of technology and entertainment. But there’s more to California than Silicon Valley and Hollywood. California also leads the U.S. in agricultural output – and by a wide margin. By most estimates, California’s agricultural output is about $50 billion a year, well ahead of the No. 2 state, Iowa. Read on for more about what makes California farmland attractive to investors. <\/p>\n\t
Sign up to our educational newsletter and be among the first to learn of our investment opportunities.<\/em><\/p>\n\t\t\t\n\t\t\t\t\t\t\tLEARN MORE\n\t\t\t\t\t<\/a>\n\t\t\t\n A Mediterranean climate combined with the state’s rich soil make California unique among U.S. agricultural producers. Mild winter temperatures allow permanent crops (as opposed to row crops like corn, wheat and soybeans) to thrive in California. The result is an amazingly diverse farming economy that produces 400 cash crops. By contrast, Iowa is the nation’s No. 2 farm state, but its agricultural sector is dominated by corn, hogs and soybeans. California’s variety of crops is a boon for investors.<\/p>\n <\/p>\n As an investor in California farmland, you can build a portfolio that includes a number of different types of commodities. This allows you to manage risk and to smooth out returns, which can follow boom-and-bust patterns if you rely on the fortunes of just one crop.<\/p>\n <\/p>\n Of course, soil and climate are crucial to a thriving agricultural economy, but they’re only part of the puzzle. Water is an important input. While California doesn’t receive abundant rainfall, the state’s farmers do benefit from a system of dams, aqueducts, canals, irrigation districts, 12 major reservoirs and underground water banking. Labor also is an important piece of farming success – someone needs to harvest the crops. California has a deep pool of farm labor, thanks in part to its proximity to Mexico.<\/p>\n <\/p>\n What’s more, California’s agricultural economy is kept afloat in part by an abundance of support services — agronomists, farm managers, equipment rentals, chemical companies, cropdusters and other specialists are readily available in a state with a thriving agricultural economy.<\/p>\n <\/p>\n And once the crop has been grown and harvested, there’s no shortage of consumers a short drive away. With a population of 39 million, California is home to more than 10% of the U.S. population. Los Angeles County alone has more than 10 million residents, making it bigger than most states. Californians are more affluent than the U.S. population – the state’s median household income is 20% higher than the national average, according to the U.S. Census Bureau.<\/p>\n <\/p>\n That means California’s farmers are surrounded by a ready market for their produce. For products that are exported out of California, the state has a robust network of seaports, rail lines, trucking hubs and airfreight. The Port of Los Angeles is one of the world’s busiest seaports and an entryway for many goods coming to the U.S. from China. That means California farmers are close to a logistics network that can carry their products to other states in the U.S. or to Asia.<\/p>\n <\/p>\n California’s agricultural sector also benefits from its position as a producer of high-value crops aimed at affluent consumers who can sustain price increases. Farmers in the Great Plains focus on corn, wheat and soybeans, products that are mostly commoditized and that also can be grown in other parts of the world.<\/p>\n <\/p>\n California farmers, by contrast, raise specialty products – such as almonds, pistachios and avocados – and organic commodities that command a price premium at retail. In addition, California’s supply of irrigated land isn’t expanding, so it seems unlikely that land values would fall victim to any sort of sustained downturn.<\/p>\n\t <\/p>\n If the Midwest and Great Plains are America’s corn belt and bread basket, California is the country’s capital of fruits and vegetables. Most of America’s lettuce, strawberries and broccoli are grown in California. Here are products where California produces more than 90% of the nation’s output, according to the USDA:<\/p>\n <\/p>\n Along with fertile soil, California boasts a Mediterranean climate that lets farmers produce 400 agricultural commodities, more than any other place in the U.S. Mediterranean climates are hot and dry in the summer and get most of their rain in winter. Just a handful of regions worldwide have Mediterranean climates, and they cover less than 3% of the planet’s land mass.<\/p>\n <\/p>\n These regions are conducive to highly productive farming and the cultivation of a range of crop types. In the U.S., California’s Central Valley is the only place with a combination of rich soil, a Mediterranean climate and the agricultural infrastructure necessary to sustain a major farming economy. About 9 million irrigated acres exist in California, positioning the state as the globe’s prime spot for investing in high-yielding permanent crops.<\/p>\n\t\n\t\tWhy is California a good place for agricultural investment?\n\t<\/h2>\n\t
What percentage of the California economy is attributed to agriculture?<\/h3>\n
\nCalifornia’s agriculture sector is the largest in the U.S., but it’s mainly an afterthought in an overall economy driven by technology, real estate, entertainment, transportation and other sectors. California’s state gross domestic product was $3.4 trillion in 2021, according to the U.S. Bureau of Economic Analysis. Agriculture was less than 2% of all economic output in California. (By contrast, Iowa’s ag sector accounts for more than 10% of that state’s GDP.) \n\tWhat percentage of the US’ fruits and vegetables are grown in California?<\/h3>\n
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\n Almonds<\/td>\n 100%<\/td>\n<\/tr>\n \n Pistachios<\/td>\n 100%<\/td>\n<\/tr>\n \n Walnuts<\/td>\n 100%<\/td>\n<\/tr>\n \n Celery<\/td>\n 100%<\/td>\n<\/tr>\n \n Garlic<\/td>\n 100%<\/td>\n<\/tr>\n \n Plums and prunes<\/td>\n 100%<\/td>\n<\/tr>\n \n Nectarines<\/td>\n 100%<\/td>\n<\/tr>\n \n Kiwifruit<\/td>\n 100%<\/td>\n<\/tr>\n \n Artichokes<\/td>\n 100%<\/td>\n<\/tr>\n \n Tangerines<\/td>\n 96.8%<\/td>\n<\/tr>\n \n Avocados<\/td>\n 96.5%<\/td>\n<\/tr>\n \n Grapes<\/td>\n 93.7%<\/td>\n<\/tr>\n \n Lemons<\/td>\n 92.5%<\/td>\n<\/tr>\n \n Carrots<\/td>\n 91.8%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n\t\tWhy is California a good place for agriculture?\n\t<\/h2>\n\t
History of California agriculture<\/h3>\n