While agribusiness – the production of food and the businesses dependent on the industry – is one of the top industries in the state, in recent years it has shown a mixed bag of growth, decline, strengths and weaknesses. It’s varied success is reflective of Colorado’s economy and changes in the agricultural industry.
The results of the most recent Census of Agriculture, conducted by the Colorado State University department of agricultural and resource economics, show that agriculture employment rose nearly 10 percent between 1992 and 1997, and agriculture income was up almost 15 percent. Colorado ranks 17th in the total value of agriculture products sold at $15.9 billion a year including $985 million in exports, and fourth in cattle and calf sales. A full report of the results was recently published in a book by Colorado State Cooperative Extension, Colorado’s Agribusiness System: Its Contribution to the State’s Economy in 1997.
"Agriculture is a backbone of Colorado’s economy," said Sue Hine, Colorado State University Cooperative Extension agriculture economist. "The health of this industry is an indicator of Colorado’s economy because so many jobs in Colorado depend on food production."
An example of the mixed information about agriculture from 1992-97 derived from the survey is the fact that the number of farms and ranches in Colorado increased – at 28,268 in 1997 – but the amount of land in Colorado used for food production fell by 4 percent and the average farm size fell 10 percent. Farm assets grew by 33 percent while farm debt grew by 27 percent. The number of farm products sold rose 13 percent.
In 1997, at the time of the most recent survey, there were 28,268 farms and ranches, an increase of 11 percent in five years, probably due to small acreage farms such as vineyards, orchards or greenhouse vegetable operations, said Hine.
"The impact of changes in the agribusiness economy is uneven among the state’s regions," said Hine. "Many areas of the state depend more on agriculture than do other areas, and some areas depend on different sectors of the economy than do others."
Of the 63 counties in Colorado, 12 of them are dependent on agriculture for their economy and eight rely heavily on the industry, which means that about a third of the state relies on agriculture for its economic well being.
"Although the economic health of the segment of agriculture that falls under food production – the farmers and ranchers – is lagging, it is still growing in new directions. Almost 50 percent of the total land in the state, and 83 percent of the privately-owned land in Colorado, is in farms, feeding thousands of people. The agricultural image itself, and the esthetic quality it brings to the landscape, make agriculture a critical contributor to Colorado’s economy."
The industry’s contribution to the state economy can be measured in four ways – employment, income, valued-added and gross sales, according to Hine. Each portion gives a different picture of agribusiness.
- Employment measures the number of jobs in agriculture, including farmers, ranchers and their labor.
- Income includes farm owner and employee net income from products and government payments, but does not include corporate farming. Corporate farming, for this study, is defined as a ranch or farm more than 500 acres.
- Value added often are the most accurate measure of economic contribution. It is defined as net income plus indirect business taxes paid to government entities and measures the economic value contributed by activity at each stage of production and marketing.
- Gross sales, a common measure of economic performance, is a limited indicator of agriculture’s health because many products are counted more than once as they move from one production stage to the next.
Although these numbers reflect growth and prosperity, traditional crops – the foundation crops of agriculture and the most common crops grown in Colorado such as corn and wheat – are falling in profit statewide.
The survey was sponsored by Colorado State Cooperative Extension, the university Agricultural Experiment Station, and the Colorado Department of Agriculture.
Agribusiness – agriculture and businesses that rely on it – measured by this survey includes traditional farm production such as wheat, corn, livestock, fruit, vegetables and horses; agricultural industry sectors necessary for the operation and growth of core agricultural producers such as seed and fertilizer suppliers; and processing and marketing businesses necessary to bring the final goods to the customer. For a copy of the analysis, Colorado’s Agribusiness System: Its Contribution to the State’s Economy in 1997, call the Colorado State Cooperative Extension Resource Center at 970-491-6198.
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