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,"" _ k U. k-' ~ Introduction 1 Colorado ranks among the leaders in the production of a number of agricultural products, The state ranks number one in the nation in numbers of sheep and lambs on feed and second in the production of onions for storage, It ranks fourth in the production of dry edible beans, cattle on feed, fed cattle marketings, production of sheep, lambs, and wool, fifth in the production of potatoes, sorghum for silage, lettuce, and sixth in the production of wheat and pears, The state ranks in the top twelve states in the production of twenty five different agricultural products, Colorado is the 30th state in terms of numbers of farms but 10th and 9th, respectively, in terms ofland in farms and average farm size, Overall, the state occupies a position of some prominence as an agricultural producer on the national scene, The state's economy is, however, quite diverse and questions continue to be raised regarding the contribu- tions made by agriculture to the Colorado economy. An earlier study (il' of the contributions of agriculture to the Colorado economy was under- taken on the heels of the financial crisis in farming during the early 1980's, The present study follows. the same format as the earlier one and maintains the focus on agriculture as a system which begins with provision of agricultural production inputs and services and ends with the distribu- tion of food to the final consumer. The role of the agribusiness sector in the economy receives, however, a greater emphasis in this study, Agriculture is, unfortunately, often perceived as only the produc- tion activities undertaken on farms and ranches in the state, Production agriculture is, in its own right, critical in creating income and employment in many counties. However, it must be recognized that production represents only one step in a highly technical process resulting in a final consumer product. In this process, production agriculture is characterized by both backward and forward linkages with other sectors of the economy, For example, agricultural production generates a demand for inputs not produced or available on the farm, Provision of inputs to meet this demand (for example, feed, seed, gas, oil, fertilizer, pesticides, veteri- nary services, and farm machinery and equipment) is the first step in the process, In the main, such inputs are provided by what may be termed the agricultural input sector, The second step in the process is the actual production occurring on farms and ranches in what is termed the farm production sector, This sector produces goods which are sold directly to consumers and/or which are the basis for further processing and subsequent marketing, The third step in the process consists of transportation, storage, and processing and includes firms that manufacture food and related products or are involved in the wholesale trade of farm product raw materials, The firms in this sector comprise what is termed the agricul- tural processing and marketing sector, The final step in the process completes the delivery of food to consumers and involves (a) the wholesale trade of groceries and related products, (b) retail food stores, and (c) eating and drinking establishments. These firms make up the food wholesaling and retailing sector. The agricultural input sector, the farm production sector, and the agricultural processing and marketing sector together make up the agribusi- ness sector of the state's economy, The number and size of firms in the agribusiness sector tend to rise and fall proportionally with farm produc- tion and its profitability, Employment, earnings, and in most cases the location of agribusiness firms are directly dependent on Colorado farming and ranching activities, The agribusiness sector com- bined with the food wholesaling and retailing sector forms the total farm and food system, This system is the total complex of all Colorado businesses required to support the production and delivery of food to the final consumer. 2 This report presents data on the current importance of the farm and food system in Colorado's economy. The primary focus is on the extent to which economies of individual local communities depend on the various agricultural sectors for their economic livelihood, In what follows we look first at the dependence of county economies on production agriculture and then on the dependence of county economies on the agribusiness sector, The key indicators of depend- ence in both cases are income andtemployment associated with agricul- tural production and agribusiness. We conclude with the overall contribution offarms/ ranches, agribusiness, and food wholesaling and retailing to employment and income at both county and state levels, 1 Underlined number.; in parentheses refer to items in R'!!errmces, 2 The above sector definiti<m5 are similar to those used elsewhere by the u.s, Department of Agriculture (1),