California and Arizona agricultural economies are coming off one of their best seasons in a decade, and prospects are bright for another banner year.

2012 may not be a home run like 2011, but Vernon Crowder, vice president and agricultural economist for Rabobank in Fresno, Calif., is looking for continued prosperity in the agricultural sectors.

Wine grape growers in the coastal areas suffered from early frost and late rains last season. Central Valley raisin and citrus producers were challenged by late season rains in 2011.

“Overall, however, it was a good year, so a good many of the bank’s customers are embarrassed to talk about how good it was,” Crowder commented at the World Ag Expo in Tulare, Calif.

“We expect this year to be as good as well — just maybe not as good as 2011,” said the veteran ag economist. He is optimistic because ag exports remain strong, interest rates are low and the domestic economy seems to be picking up.

China’s agricultural buying is one reason California is prospering with a growing demand in China for many of its specialty crops like walnuts. The Chinese economy is slowing a bit to a 7 percent to 8 percent growth rate from the overheated 10 percent of the past years. Nevertheless, Crowder expects China to continuing purchasing what Western farmers produce.

It has been a very dry winter and Crowder joins the chorus of concerned farmers worried about this year’s irrigation water supplies. However, he does not expect farmers to curtail production from last year, just spend more money to get the water.

“The groundwater basin was replenished last year, and I expect the West Side of the San Joaquin Valley to get a 35 to 40 percent (state and federal surface) water allocation. This is certainly better than we saw during the recent bad water years,” he said.

Many producers had water allocations left over from last season and are using that water this spring to pre-irrigate fields ahead of the planting season. Many orchards and vineyards also have been irrigated this winter.

When Crowder talks about 2012 being another good year, he hastens to add that “Mother Nature is in charge.”

On specific fronts, Crowder said the dairy industry seems to be suffering the most economically right now with very low milk prices. “Prices are below the breakeven point for a fair number of dairymen,” Crowder lamented.

“I think you will see some dairymen start to cull older cows and production should slow down,” he said.

The recent dairy roller coaster rides have helped to make dairymen more focused. “California is a feed deficient state and therefore very vulnerable to the volatility of feed prices. Dairymen are making every effort they can to invest in farmland to feed their dairy animals,” he said.