Pacific West Region

Peoples Company

California remains the top-producing agricultural state in the U.S. with over $55.9 billion in annual cash receipts for agricultural products representing just over 10% of the total U.S. agricultural production (USDA, 2022). In total, USDA recognizes over 400 different commercially grown commodities in California. Dairy leads the list with $10.4 billion in annual production value followed by grapes at $5.5 billion. California also holds dominant positions (99% or more) in almonds, artichokes, celery, figs, garlic, grapes/raisins, kiwifruit, melons/honeydew, nectarines, olives, pistachios, peaches, other stonefruit, plums/prunes, walnuts, and many nursery crops and seed production. In addition to being the top milk-producing state, California is of course renowned for its wine production, with the Napa and Sonoma wine-growing regions known worldwide. The agricultural sector is heavily dependent on export markets with nearly 40% of the total production going abroad, representing 12% of all U.S. agricultural exports. The top export destinations are Canada, the EU, China, Mexico, Japan, S. Korea and India

California agriculture continues to face several significant challenges that will impact the productivity and economic profitability of the state’s agricultural sector. The most obvious issue relates to water usage and competition between agricultural use and usage within high-population centers in the downstate region. California had been suffering through a prolonged drought and got welcomed relief through a record seasonal snowpack and snowmelt in 2023. NOAA indicated that nearly 100% of the state was in a drought status at the beginning of the year, but by the end of November, less than 1% remained under excessively dry or drought conditions. The abundant precipitation significantly recharged reservoirs and also resulted in the state making it easier for farmers to capture excess flows as well as fast-tracking water storage and infrastructure projects like the Sites Reservoir so less water is lost to runoff in the future.

California’s Sustainable Groundwater Management Act (SGMA) still holds substantial potential to rearrange agricultural production in the primary nut-producing regions in particular, and in major Central Valley vegetable production areas as well. Forecasts continue to predict that substantial additional acreage will need to be idled with water diverted to more valuable production areas, and crops that can be grown elsewhere or are more water-price sensitive may be driven to other regions of the state or country as SGMA is fully implemented. To do so, some almond orchards are being “recycled” on a shorter timeline, and water rights are consolidated on highest-valued parcels. In addition to water challenges, California also relies on the largest number of hired and migrant workers with well over half a million per year. While agricultural labor has always represented an important management issue, scrutiny over labor treatment, initiatives surrounding minimum wage and overtime requirements, and increased attention on all things related to immigration have heightened the concern in continuing reliance on the ag-labor pool and such high levels. Additional headwinds remain for almonds and wine grapes in particular through pricing pressures from oversupply and efforts to continue to consolidate production units.

The land transaction market has seen wide variation throughout 2023, with activity shifting from large-scale transactions at the start of the year to mostly smaller farms toward the year’s end. Many investors and institutional funds have paid more attention to capital expenditures and value enhancement projects than to new acquisitions, and they have been slower to deploy funds due to increased debt costs and uncertainty about the pace of recovery of some specific commodity prices. The industry is currently in a phase of “right sizing and resizing” permanent crop acreages and there is some optimism for near-term price stabilization for some commodities, such as almonds. As was the case in prior years, land with strong water rights and lower-cost access to ground and surface water occupies a distinctly different class than land without strong water rights. “Farming the water” remains a descriptive phrase for selling water usage like any other commodity as a component of a parcel value.

In terms of financial performance, overall appreciation in land values has remained fairly strong across the lower volumes and has resulted in recent returns in particular remaining competitive with other regions.

Variation across crops has increased and the headwinds for some tree-nut regions, winegrapes, and certain citrus varieties remain but have perhaps receded from a year ago. The table below shows the total returns and components for selected periods including the most recent three-year period. The lower section of the table shows inflation (CPI) and 10-year Treasury yields for comparison (CMT-10).

The California farmland market is the most massive and diverse in the country with unique climactic delineations, unique soils and growing conditions, and proximity to consumers and export channels. Water-related access and cost differences are emerging that will continue to create both stresses and opportunities as SGMA reaches full force and as the state’s own investments in water-related infrastructure mature. Still, the sheer magnitude and diversity of its agricultural production guarantee that California will remain a critical player in not only its own, but also in the future prosperity of the U.S. Institutional investors have historically focused on California due to access to large-scale operations with little production competition, but have been relatively less active as interest rates have increased and pricing uncertainty remains elevated. As coined by Schumpeter, “creative destruction” is a necessary part of the movement toward increased longer-term efficiency, and the next few years will be critical in determining and shaping the production system realignments that will occur.


Regional Offices

Peoples Company - Fresno

Pacific West

7498 Remington Avenue
Suite 106
Fresno, CA 93711


Peoples Company - San Diego

Pacific West

2150 W. Washington Street
Suite 501
San Diego, CA 92110


Regional Listings


Riverside County, CA

86920 70th Ave Mecca, CA 92254

Located in the southern portion of the Mecca Slope in a warm area where citrus does well, this tract was planted in an organic lemon grove that was recently removed. The previous citrus plantings were...




$23,545 / ACRE




Imperial County, CA

NW Corner of Cruickshank & Cooley Roads El Centro, CA 92243

This certified organic tract has been farmed to high value spring mix for several years. The farm benefits from ample water, fertile soils, tile drainage, and cement ditches. It is located in the hear...




$11,718 / ACRE




Riverside County, CA

Highway 86 @ 84th Avenue Coachella, CA 92236

This greenhouse facility was most recently used for organic blueberry production, with bell peppers grown before that. Greenhouse structures cover more than 2,000,000 SF, or 46 acres of the site, whic...







Riverside County, CA

93601 64th Ave Mecca, CA 92254

This parcel was recently fully planted for permanent crops; however, the vineyard and citrus plantings were recently removed. A reservoir and filter station are located in the northeast corner of the ...




$25,500 / ACRE




Riverside County, CA

70th Ave E of Cleveland St. Mecca, CA 92254

Sea Front Ranch is located at the southeastern reach of the Coachella Valley’s Mecca Slope region, a sought-after area with a unique climate that allows it to produce some of the earliest crops ...




$25,925 / ACRE




Riverside County, CA

NEC 60th Ave & Lincoln St. Thermal, CA 92274

This Mecca Slope farm is half planted to mature lemon trees and row crops. The lemons have a strong production history and the open farmland has historically been leased for vegetable production at to...




$25,250 / ACRE




Riverside County, CA

83001 58th Ave Thermal, CA 92274

 58th Avenue Ranch consists of two tracts. A 77.70-acre tract is a former table grape vineyard that is available for new plantings. It has some vineyard infrastructure in place that can be re-pur...




$27,502 / ACRE




Riverside County, CA

Highway 111 SE of Cleveland St. Mecca, CA 92254

Historically a citrus and table grape ranch, Beach Ranch has been converted to vegetable production in recent years. With excellent regional access via Highway 111, C-P-S (Scenic Highway Commercial) z...




$22,471 / ACRE




Riverside County, CA

Hammond Rd. at Grant St. Mecca, CA 92554

This efficient tract of cropland is currently farmed to vegetables and was previously a citrus grove for many years. The tract is located toward the south end of the Coachella Valley but north of High...




$23,951 / ACRE




Riverside County, CA

91666 62nd Ave Mecca, CA 92254

Lincoln Ranch benefits from mostly Class 2 sandy loam soils and an efficient layout with a greater percentage of farmable land than is typical for Coachella Valley tracts. An existing Ag Preserve...




$23,457 / ACRE



View All Listings

Regional Team