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Economic Development

The Merced area is the emerging financial, industrial, trade and commercial capital for the Central Valley of California, an area developing a reputation as a lucrative and distinct region.

The community is located two hours from San Francisco in the San Joaquin Valley, near the geographic center of California, and spans from the Coastal Ranges to the foothills of Yosemite National Park. The region encompasses 1.2 million acres and includes six incorporated cities, vast wetlands and fertile agricultural lands.

The county is firmly in the center of California’s Great Central Valley. Due to the varied terrain, climatic conditions are diverse. However, dry, rainless summers and cool, rainy days with foggy mornings from November to March characterize much of the area. Average annual rainfall is 10 inches, but in the eastern portion of the county with the higher elevations, precipitation may exceed 34 inches a year.

Merced County has a land area of 1,970 square miles (1,261,417 acres). The soils are agriculturally rich alluvial plain produced by the Chowchilla, San Joaquin and Merced rivers. As of 2006, 1,159,443 acres were used for agricultural purposes, half of that for grazing.

The greater Merced region is the only seismically stable region in the state with no faults within 60 miles. This factor alone helps to assure uninterrupted operations regardless of events occurring in other areas of the state or region.

In recent years Merced County was one of California’s fastest growing regions. The area is projected to continue to increase at a rate of over two percent per annum, twice the state average. There are over two million people within a one-hour drive of Merced.

The economic base of Merced County is driven by a multi-billion-dollar annual agriculture production. Three of the world’s largest food processing facilities – Foster Farms, Hilmar Cheese and Morningstar Packing – and one of the largest wineries (E&J Gallo) are located in the region.

Non-agricultural industries such as Quebecor (printing), Arvin Sango (auto parts), Malibu Boats and Label Technology help diversify business and employment options in the area. The newest University of California opened in Merced in 2005, hinting of a dynamic new asset as education, research and innovation are anticipated to play a greater role in the local economy. Merced College also opened a new campus in Los Banos in 2007 offering vocational education and nurse training.

The cities and county of Merced have embraced a regional perspective, and support the valley-wide initiatives of the California Partnership for the San Joaquin Valley. Our common message and leveraged resources are instrumental in securing new investment. Perhaps the best example of regional teamwork is the new countywide Enterprise Zone offering significant savings to local businesses that invest or hire within the county.

The underlying theme is to support innovation and technology development to help the region compete for investment and jobs. Fostering research and commercializing new products and enabling techniques are keys to diversification and heightened prosperity.

Merced County’s primary assets for new economic development are founded in the expansion of existing industries but also induced from commercializing innovation at the new University of California, Merced. Merced’s central location and highway connections, augmented by the evolving and redeveloping Castle Airport, suggest logistics and air freight as a growth sector. Alternative energy, particularly solar, is a focal point of research at UC Merced and may offer significant opportunities.

Proximity to natural resources, the abundance of affordable land, a large available workforce and access to international tourist attractions also bode well for Merced County. Rising costs and operating constraints for many businesses in Southern California and the San Francisco Bay Area help position the Central Valley as the last frontier in California with the space and affordability to retain California firms and attract new investment seeking access to the state’s huge population as a market for products.

Merced County will remain a leader in agricultural production and processing, but the local economy will experience growth in new sectors supporting cluster industries, innovation and entrepreneurs, and the resulting higher incomes will encourage more retail sales. Reducing the number of commuters will also support local retail operations and the subsequent expanded array of goods and services will improve lifestyle pursuits and prosperity for all residents.

Perhaps the most important economic development resource offered within Merced County is a dedicated and committed approach to accommodate business to foster community wealth generation and enhanced prosperity. The cities and county have agreed to collaborate and support regional initiatives knowing that they will all benefit from new investment throughout the region.

The primary objectives of the economic development strategy are:

A) retention and expansion of all existing enterprises; b) new business invest-ment; c) employment generation; d) improved services for residents and visitors; and e) an enhanced quality of life with access to health care, less commuting, higher incomes and stabilized home ownership for residents.

The economic foundation of Merced County is well positioned to compete. The central location, established affordable facilities and improving transportation infrastructure of the valley bode well for local food processors serving the dynamic California population, as well as global markets.


The population is young and culturally diverse with Hispanic (52 percent), Anglo (35 percent) and Asian (7 percent) accounting for major segments. The Hispanic population is expected to increase to 60 percent by 2050.

Merced County closely mirrors California’s population for place of birth. Merced County has a larger percentage (75.3 percent) of native-born residents than California (73.2 percent), while California has a larger percentage (19.2 percent) of residents born out-of-state than Merced County (12.8 percent).


Comparatively, Merced County has a younger population than the rest of the state. Minors account for over two-thirds (36.1 percent) of the population while seniors account for 9.4 percent of the population. There are proportionally more seniors (65 and older) and 19-64 year olds in California, 11 and 60.2 percent respectively, than in Merced County.


Males make up 121,829 (50.3 percent) of the population, while females comprise roughly 120,409 (49.7 percent). The statewide gender makeup is the opposite of Merced County with 42.7 percent (1,696,441) male and 57.3 percent (2,274,754) female.

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